Woden and Silver

FAMILY COURT OF AUSTRALIA

WODEN & SILVER

[2016] FamCA 692

FAMILY LAW – PROPERTY – Application by husband for adjustment of property – Where the husband made greater financial contributions during the marriage – Where the wife continues to have primary care of the child of the marriage – Where the wife was financially dependent on the husband for most of the marriage – Where the wife has since re-partnered – Where the wife suffers from mental health issues – Where the wife’s contribution was assessed at 20 percent – Where the adjustment of the matrimonial property pool is made by way of a superannuation splitting order

Family Law Act 1975 (Cth), ss 75(2), 79(2), 90MT(1)(a)

APPLICANT:

Mr Woden

RESPONDENT:

Ms Silver

FILE NUMBER:

WOC

367

2013

DATE DELIVERED:

22 August 2016

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Rees J

HEARING DATE:

11, 12, 15 and 16 August 2016

REPRESENTATION

THE APPLICANT:

In Person

COUNSEL FOR THE RESPONDENT:

Ms Goodchild

SOLICITOR FOR THE RESPONDENT:

Rebecca Bailey & Associates

Orders

IT IS ORDERED

That pursuant to s 90MT(1)(a) of the Family Law Act 1975 (“the Act”) that Mr Woden, a member of the BT Lifetime Super – Employer Plan (D Pty Ltd) (“the Plan”) member number …, and BT Funds Management Limited (“the Trustee”), do all acts and things, sign all documents and give all consents necessary so that whenever a splittable payment becomes payable to Mr Woden from his interest in the Plan, Ms Silver shall be entitled to be paid by the Trustee an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of one hundred and twenty-five thousand dollars ($125,000.00), and that there be a corresponding reduction in the entitlements that Mr Woden would have had in the Plan if these orders had not been made.
That for the purpose of these Orders, the operative time for Order 1 above shall be the date four (4) working days after the day upon which a sealed copy of these Orders is served upon the Trustee.
That upon service of these orders upon the Trustee, the orders made 2 March 2016 are vacated to allow compliance by the Trustee with Order 1 above.
That otherwise than in accordance with Order 1, each party shall be solely entitled to retain any real or personal property in her or his possession at the date of these orders.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: WOC 367 of 2013

Mr Woden

Applicant

And

Ms Silver

Respondent

REASONS FOR JUDGMENT

Proceedings in relation to the parties’ property settlement were instituted by Mr Woden (“the husband”) by an application filed on 5 September 2013. In her Response, the respondent Ms Silver (“the wife”) sought orders in relation to parenting matters.
The proceedings were listed for final hearing on 11 August 2016.
In order to explain the manner in which the hearing proceeded, it is necessary to set out the procedural history.
The matter first came before a Registrar for a procedural hearing on 28 October 2013. The wife was directed to file a response, setting out the financial orders that she sought, and the husband was directed to file a reply.
Further procedural hearings took place on 12 March 2014, and again on 4 April 2014.
On 4 April 2014, the Registrar noted that the matter was not ready to be allocated a Conciliation Conference, and directed that by close of business on 2 May 2014, the husband give financial disclosure in relation to his income and the financial statements of various corporate entities. On that day, orders were made for the valuation of a property owned by the husband at H Town by a single expert valuer.
On 27 June 2014, there was a further procedural hearing before the Registrar who noted that the valuation of the H Town property had been prepared.
On 12 August 2014, the matter was listed before me. The husband left the Court at approximately 11.23 am on that day and did not respond to messages from the Court Officer or from the wife’s solicitors to the effect that the matter was continuing. When the matter was called at 5 minutes past 1 o’clock, the father did not attend. Accordingly, the matter was stood over for further mention before me on 1 October 2014 and both the solicitor for the mother and the Registrar were directed to advise the father of the making of those orders.
On 15 May 2014, orders were made by consent to the effect that the child of the parties live with the mother and spend time with the father.
On 22 August 2014, there was a further procedural hearing before the Registrar who noted:
·    Directions were made on 4 April 2014 placing this matter on the list of cases awaiting allocation of a first day hearing day before a Judge;
·    No Conciliation Conference has yet been convened as the matter is not yet ready to have such a conference allocated;
·    Further subpoenas are returnable before the Court on 27 August 2014;
·    Acting Senior Registrar Campbell made interim parenting orders on 15 May 2014;
·    The husband filed a review of these interim parenting orders and the review was listed before Justice Rees on 12 August 2014, and has been adjourned for further mention to 1 October 2014 at 10:00am;
·    No further procedural hearing has been listed by me today;
·    The telephone procedural hearing today was commenced shortly after 8.30am as listed and concluded at approximately 8.50am;
·    At approximately 8.53am, Registrar Cameron received a message from a Client Services Officer that the husband had personally attended the Court and was currently in the building;
·    Registrar Cameron requested that the Client Services Officer advise the husband that the procedural hearing had concluded and that he would be provided with a copy of the orders and notations made.
The Registrar then made the following orders:
I grant the parties liberty to request that this matter be listed for a telephone procedural hearing before Registrar Cameron on 14 days’ notice in the event that the matter is ready to be allocated a date for a Conciliation Conference or either party requests that specific directions be made with a view to preparing this matter for a Conciliation Conference to be allocated.
In the event that the husband fails to appear before Justice Rees on 1 October 2014, the solicitor for the mother has liberty to request that this matter be listed for a telephone procedural hearing before Registrar Cameron on seven days’ notice with a view to making directions for the preparation of this matter for an undefended hearing and the listing of same before a Judge.
The matter was listed for further mention on 1 October 2014 and the husband was in attendance. The parties had an opportunity to discuss the parenting issues with a Family Consultant but were unable to reach any agreement. The matter was listed for determination of the interim applications before the Senior Registrar on 14 November 2014.
On 14 November 2014, the matter was adjourned to be heard in a duty list on 11 February 2015.
On 12 January 2015, Justice Stevenson heard the wife’s application for interim property settlement, interim spousal maintenance and interim costs.
On 15 January 2015, Justice Stevenson handed down judgment and made orders, inter alia, for the payment of spousal maintenance in the sum of $200 per week. In her judgment, Justice Stevenson noted that the husband’s Financial Statement sworn 25 November 2013 disclosed a gross income of $2,050 per week.
The husband appealed against the decision of Justice Stevenson and sought a stay of her orders of 15 January 2015.
On 12 February 2015, the husband’s application for a stay was dismissed.
On 25 March 2015, the Registrar, on the application of the wife, issued a third party debt notice to recover monies due to the wife by way of spousal maintenance.
On 13 April 2015, the husband’s Application in a Case seeking interim parenting orders was listed before Justice Aldridge who directed that a Family Report be prepared.
On 2 June 2015, the husband’s application for review of the order of the Registrar issuing a third party debt notice was listed before me. The third party debt notice had been executed. The application for a review was of no utility and the application of the husband was dismissed. In the course of the proceedings the husband left the courtroom and did not return.
The Family Report was released to the parties by order of 28 July 2015.
On 12 August 2015, the matter came before me for the first day of a Less Adversarial Trial (“LAT”). The record notes the following orders and directions:
IT IS ORDERED
1.That leave be granted to the solicitor for the mother and to the independent children’s lawyer to provide to the mother’s treating psychologist and the child’s treating psychologist a copy of the Family Report.

IT IS NOTED
2.That in the parenting proceedings the mother proposes to rely on an affidavit by herself, by [her partner] and by the child’s therapist.
3.That the father proposes to rely on an affidavit by himself only.
4.That in relation to the property proceedings the parties have agreed that the value of the property at … H Town, Queensland is $800,000.
5.That the husband is a director and shareholder of [E] Pty Limited. [E] owns one third of the shares in F Pty Ltd (“F”). F owns real property. It is necessary to value the real property owned by [F] in order to ascertain the value of [E’s] shares in [F].
6.That in relation to the value of [E] Pty Limited the solicitor for the wife will within 21 days of this date nominate three valuers who are appropriate to value the underlying real estate of [E] Pty Limited and three valuers who are appropriate to value the corporate entity.
7.That the father within seven days of receiving those nominations will indicate which valuer is to be instructed.

IT IS FURTHER ORDERED
8.That in the first instance the husband is to pay the cost of the valuations and the wife’s contribution to those costs will be a matter to be determined at trial.
9.That the matter is stood over for call over on 18 January 2016 at 10am.
10.That each party file and serve all affidavits upon which they seek to rely in both the parenting and the property proceedings by 4pm on 4 December 2015.
11.That only one affidavit of each witness including the parties will be permitted.

On 3 December 2015, the husband’s application to discharge the spousal maintenance order was heard, and by judgment delivered 11 December 2015, the order was vacated.
It was disclosed in the Family Report, but not otherwise, that the wife was in fact living in a de facto relationship and had been so living for some time.
On 18 January 2016, the matter was again before me. The matter was not ready for hearing and was stood over to the call over list on 16 March 2016. Orders were made to the following effect:
IT IS ORDERED
3. That the husband file his trial affidavit not later than 4pm on 29 February 2016.
4. That the wife file and serve an affidavit directed solely to her health not later than 4pm on 29 February 2016.
On 18 January 2016, the wife sought to agitate an application to restrain the husband from dealing with his superannuation interests which were about to vest. The husband opposed that application. He was directed to file and serve any affidavit upon which he sought to rely in relation to the application by 4 pm on 17 February 2016.
That application was heard on 2 March 2016, and orders were made as sought by the wife.
On 16 March 2016, the matter again came before the Court. No trial affidavit or Financial Statement had been filed by the husband. It was ordered that the matter be listed for final hearing for four days before me commencing on 19 July 2016. The following orders were made by consent:
IT IS ORDERED BY CONSENT
2. That within 7 days the Applicant provide all necessary documentation to I Accountants and to [J Valuers] to enable [J Valuers] to complete their valuation including but not limited to the following:-
2.1To I Accountants:
2.1.1Access to general account record keeping software file (MYOB, Quickbooks, Xero access or otherwise) reconciled to 31 December 2015;
2.1.2Trust account software end of month managers income reports showing the breakdown of managers income (separate figures for commission, cleaning, linen, etc), for the 12 months to 31 December 2015;
2.1.3Trust account occupancy reports for the 12 months period to 31 December 2015.
2.2To [J Valuers]:-
2.2.1Signed and dated Caretaking and Letting agreement;
2.2.2Any Deeds;
2.2.3The completed questionnaire prepared by [J Valuers].
3. That costs for the Respondent be reserved.
IT IS ORDERED
4. That leave be granted to the applicant husband to issue subpoenas for the attendance to give evidence of [Mr K] and [Mr L].
5. That on or before 4pm on 12 July 2016 all parties file and serve a case outline document including but not limited to a list of the affidavits upon which each seeks to rely and an agreed Joint Balance Sheet.
6. That the application be listed for mention only before the Honourable Justice Rees on 7 June 2016 at 9.30am for a readiness hearing.
7. That in the event that all affidavits and valuations have not been filed by that date, the hearing dates will be vacated.
8. That leave to the independent children’s lawyer to file any further subpoena in relation to the parenting issues.

On 7 June 2016 the matter again came before the Court for a readiness hearing. The matter was not ready. The following notations and orders were made:
IT IS NOTED
1.That the matter is not ready for hearing.
2.That the accountant for [F] Pty Limited is [Mr O] (“the accountant”).
3.That the email address of the accountant is ...
4.That the mobile phone number of the accountant is ....
5.That the postal address of the accountant is ...
IT IS ORDERED
6.That within seven (7) days the Applicant shall provide to the Respondent’s solicitors the full name and contact details of the accountant for the company [F] Pty Limited (being the company that owns the management rights to the [M] complex).
7.That [Mr N], Senior Valuer from [J Valuers], is hereby authorised on behalf of [Mr Woden] to:
7.1have general access to the property at [P Street, Q Town] (being the [M] complex); and
7.2have specific access to the property at [P Street, Q Town] (being the managers unit), office space and storage; and
7.3obtain information and documentation from the onsite manager of M ([P Street, Q Town]) as follows:
7.3.1 a print out of all Permanent let Lots providing; Unit/Lot number, number of bedrooms in unit, current rent and lease term.
7.3.2 Breakdown of total units in complex including:

Total Units in Complex

Total units in the Letting Pool

Permanent Units

Short term Units

Outside Agents

Owner Occupied

Locked up

Other

Managers Lot

7.3.3 Breakdown of units in the ‘short term’ letting pool:

Studio

One Bedroom

Two Bedroom

Three Bedroom

Penthouse Units

7.3.4      Are there any informal or other agreements, including any 'Leaseback' or ‘Performance Undertaking’ agreements with any owners of units? - If so, obtain a breakdown of information including: Unit number, number of bedrooms, Rent payable to the owner, Lease term and commencement/expiry.
7.3.5      Are there any Lots managed outside of the complex and the income is included in the P&L statement?
7.3.6      Obtain a print out of the Occupancy rate and Average Tariff (across all unit types in the letting pool) for the short term let units for the corresponding previous 12 months periods for 2014 and 2013
7.3.7      What is the total number of units in the Letting Pool and Average Tariff (across all unit types in the letting pool) for the corresponding 12 months period for 2013 and 2014?
7.3.8      What is the current Body Corporate Salary?
7.3.9      Advise any upgrades to the building or plant, refurbishments or renewals in the past 2 years to the buildings.
7.3.10    Are there any planned building refurbishment, repairs or maintenance which has been approved by the Body Corporate/s.?
7.3.11    Advise of multiple ownership of units in the Letting Pool? Breakdown of name of owner and units owned.
7.3.12    Advise current Staff and/or Contractors employed at the property. Advise hours each person is employed and on what basis? (full time, casual etc.).

8.That [Mr R], Accountant from I Accountants, is hereby authorised on behalf of [Mr Woden] to obtain from the onsite manager of M (P Street, Q Town) and/or the company accountant of [F] Pty Limited (being the company that owns the management rights to the M complex) access to and copies of the general account keeping software file (MYOB, Quickbooks, Xero access, or otherwise) of [M] and [F] Pty Limited reconciled to 31 December 2015.
9.That the Final Hearing dates (four days commencing on 19 July 2016) be vacated.
10.That the costs of the Respondent be reserved.
11.That the matter is stood over for mention on 25 July 2016 at 10am if the valuation is ready and all other material has been filed the matter will be given dates for hearing.

The effect of those orders was that, in the absence of co-operation by the husband in the valuation process, the wife was authorised to rely on the valuations filed in her case.
On 25 July 2016, the following directions were made:
IT IS DIRECTED
1.That the wife file and serve any amended application not later than 4pm on 1 August 2016.
2.That the matter be listed for hearing on 11, 12, 15 and 16 August 2016 before the Honourable Justice Rees.
3.That not later than 4pm on 8 August 2016 the parties file a Joint Balance Sheet and each party file a list of the documents upon which he or she seeks to rely.
4.That the wife serve upon the husband an unsworn copy of the affidavit of the valuer by 4pm today.
5.That no further affidavit material is to be filed without the leave of the Court first obtained.
6.That leave be granted to the independent children’s lawyer to file any further subpoena.
When the matter came before me for hearing on 11 August 2016, the Joint Balance Sheet had been filed. The wife’s affidavit material had been filed in accordance with the directions.
Both parties relied on the Family Report.
The husband sought to rely on nine affidavits, six of which had been filed in the wife’s case. No Financial Statement had been filed by the husband and none of the affidavits filed by the husband dealt with financial issues.
With the assistance of the Independent Children’s Lawyer, the parties were able to resolve the parenting issues and enter into Terms of Settlement. The matter proceeded only in relation to financial matters.
There being no evidence filed in the husband’s case in relation to financial matters, he was not required for cross-examination. The husband did not seek to cross-examine the wife. The parties proceeded to submissions and judgment was reserved.
Accordingly, the evidence of the wife in relation to financial matters was unchallenged.
The husband sought, in submissions, to challenge the evidence of the valuer who had valued the property underlying the corporate entities but, absent evidence in his own case which went to the substance of the challenge and cross-examination of the valuer, that challenge could not succeed.

THE UNCHALLENGED HISTORY

The husband is sixty-five years old and the wife, is thirty-one years old.
The parties commenced living together in about September or October 2006, and were married in 2010. They separated on a final basis on 20 February 2012 and were divorced on 9 August 2013.
There is one child of the relationship, a daughter now aged eight. She lives with her mother and will spend time with her father pursuant to consent orders which were made at the commencement of these proceedings.
At the commencement of co-habitation, the wife had a small amount of superannuation, and approximately $6,000 that she had received by way of inheritance.
The husband had an interest in a property at H Town together with two other properties in Sydney. Shortly after the parties commenced living together, the husband and his former wife came to an agreement in relation to property settlement and the husband retained the H Town property subject to a mortgage of approximately $400,000. There is no other evidence before the Court in relation to the husband’s financial affairs at the commencement of co-habitation.
The parties commenced living together in rented accommodation in S Town in around September or October 2006.
The wife was working as an executive assistant earning about $65,000 per annum. She continued in that employment until about October 2007, when her mental health deteriorated to the extent that she was unable to work.
From October 2007 until February 2011, the wife was financially dependent on the husband.
The husband worked in a professional capacity throughout the relationship.
The parties moved into the H Town property in late 2008 and lived there until mid-2011.
In mid-2011, they moved to reside in the manager’s unit in the M Complex in T Town where they lived until their separation in February 2012.
During co-habitation the wife undertook the majority of the home making and parenting duties. The wife deposed that the husband would wash dishes in the evening and clean the kitchen after the evening meal. He mowed and maintained the grounds and would occasionally vacuum and hang out washing.
In about 2010, the wife commenced a distance education degree through the University of New England but deferred her studies in mid-2011.
In February 2011, the wife again resumed paid employment earning approximately $30,000 per annum. Her income was applied to the purposes of the family.
In 2011, the company E Pty Limited (“E”) was incorporated. The husband and the wife were joint directors and shareholders of E, which was set up as a vehicle to purchase an interest in another company which owned the management rights for M in T Town (“the management rights company”).
E received a monthly payment from the management rights company.
The wife deposed that the arrangement between E for the management of M was negotiated by the husband. In her affidavit sworn on 15 December 2015, she deposed:
The package deal was set up as follows:
(a)[The husband] set up [E] so that we were both joint shareholders and directors.
(b)E is a one third shareholder in the company “[F Pty Limited]” (“[F]”). [F] owns a managers unit, office space and storage within the complex...
(c)[E] is a partner with three entities [named] which cumulatively operate to conduct the “[M] Partnership” enterprise which includes:
(i)Management rights to the [M] business including rental role for over 200 apartments of mixed use letting (permanent, short stay and holiday)
(ii)Income to the body corporate manager (being a caretaking and letting agreement worth $85,000 per annum plus GST)
(iii)Commission on the sale of apartments
The overall purchase price of the M “package deal” was $2,810,000. E’s 54 per cent interest in the whole enterprise was originally purchased for approximately $1,539,000.
In order to finance the cost of buying into the project, the husband refinanced the mortgage over his H Town property and obtained a second mortgage.
At trial, it was agreed that the H Town property was encumbered by a first mortgage of $405,000 and a second mortgage (on behalf of E) of $570,000. The repayments are of interest only.
The balance of the purchase money of the M was obtained by way of a mortgage to the National Australia Bank obtained by the partnership and secured over the manager’s unit.
From about October 2011, the wife commenced to work for E. She worked a six and half day week at M.
In December 2011 and January 2012, for a period of about four weeks, the wife’s parents cared for the parties’ daughter.
The parties separated in February 2012.
In about July 2012, the wife received an email from the husband informing her that the H Town property was tenanted. There is no admissible evidence of the amount of rent which was received by the husband. The wife did not receive any share of the rent.
The husband remained responsible for the payments in relation to the mortgages secured over H Town. The interest only repayments in relation to the first mortgage are approximately $1,650 per month. The payments in relation to the second mortgage are $2,500 per month. Thus, since separation, the husband has been responsible to make payments of $4,150 per month.
After separation, the wife’s shares in E were transferred to the husband. The husband continued to make payments from E into the wife’s accounts until February 2013. Thereafter he retained the income of E for his own purposes.
The current profit distribution which E receives is $6,250 per month from which the husband is required to pay $4,150 in mortgage payments.

THE HUSBAND’S FINANCIAL CIRCUMSTANCES

The information in relation to the husband’s financial circumstances which is before the Court is derived from the wife’s affidavit.
In the financial year ended 30 June 2015, the husband earned, from his employment, $84,153.39 gross.
In addition to that amount, he received income from the rent of H Town and the income from E. Thus, at least in the financial year ended 30 June 2015, the husband’s income was approximately $84,000 from employment, $75,000 from E, plus the rent from H Town.
The husband did not comply with orders for financial disclosure. He did not file a Financial Statement.
The only information in relation to the husband’s financial position that came from the husband was that which was contained in the Joint Balance Sheet. There, the husband relevantly included details of his bank account and the loan for the purchase of his vehicle.

THE WIFE’S FINANCIAL CIRCUMSTANCES

The wife is developing her own internet based business.
In her affidavit sworn 15 December 2015, she deposes that she works every day in the business creating online content. She sees clients on Skype at home and at rooms that she rents in Sydney. One of the benefits of being self-employed is that she can write off many of her expenses through tax such as rent, internet, electricity and telephone.
The wife deposed in December 2015, that the business was continuing to improve and that she hoped eventually to be independent of Centrelink.
The wife deposed that she has lived in a de facto relationship with Mr U since February 2015.
Mr U swore an affidavit in the proceedings on 17 January 2016, wherein he deposed that he is currently enrolled as a PhD candidate. He has been informally offered a position as a full time post graduate researcher on completion of his PhD thesis, and he currently receives an academic stipend. Mr U describes the wife as his partner and fiancée, and deposed that they have been in a committed relationship since November 2014.
Mr U receives $25,849 per annum and his PhD is due to conclude in about August 2016. He deposed that although he anticipates having a paid position once his PhD thesis is completed, he does not know what his salary will be.
Although the trial concluded in August 2016, and presumably Mr U has more information about his financial prospects, he provided no updating financial information.

THE BALANCE SHEET

The parties asserted their assets and liabilities to be as follows:

ASSETS
Ownership		Description				Wife/de facto partner's value			Husband/de facto partner's value
1	Husband	V Street and G Street, H Town Qld				800,000			800,000
2	Husband	100 per cent shareholding in E Pty Ltd 54 per cent shareholder in the M enterprise ANZ account…				667,641			617,068
3	Husband	ANZ account …		2,365			207
4	Husband	Motor vehicles (details not known)		22,000			22,000
5	Wife	Motor vehicle (unregistered Holden Astra)		2,000
6	Wife	Commonwealth Bank account… (50 per cent)		2
7	Wife	Commonwealth Bank account … (50 per cent)		1
8	Wife	Commonwealth Bank account … (50 per cent)		250
9
Total		$ 1,494,259	$1,439,275
LIABILITIES
Ownership		Description			Wife/de facto partner's value			Husband/de facto partner's value
10	Husband	National Australia Bank mortgage (…)			405,000			405,000
11	Husband	National Australia Bank mortgage (…) (on behalf of E Pty Ltd)			570,000			570,000
12	Husband	ANZ credit card (limit $15,000)			3,718			3,718
13	Husband	Jetstar credit card			12,397			13,000
14	Husband	St George Personal Loan			0			20,000
15	Wife	HECS Debt			5,432
16	Wife	Loan from her parents			13,000
Total		$1,009,547	$1,011,718

SUPERANNUATION
Member		Name of Fund		Type of Interest	Wife/de facto partner's value	Husband/de facto partner's value
17	Husband	BT Lifetime Super (at 28.7.2016) (per Form 6)		Accumulation	134,052	134,052
18	?	?		?	5,000
Total		$134,052	$139,052
NETT TOTAL ASSETS (including Superannuation)					$ 618,764	$ 566,609

I propose to deal with the areas of dispute in relation to the balance sheet using the item numbers in the document.

Item 2 - Share Holding in E

The valuer, instructed by the wife, valued the shareholding at $667,641. The husband disputed that valuation in submissions but called no evidence in support of his case. The husband did not cross-examine the valuer.
Accordingly, the expert’s opinion as to the value of the shareholding in E is accepted.

Item 3 - the husband’s bank account

No evidence was called by the wife to establish the amount which she asserts. The only evidence is the husband’s admission against interest and his figure will be accepted.

Items 12 to 16 - the parties unsecured liabilities

The husband has credit card debts and a personal loan. The wife has a HECS debt and a loan from her parents.
With one exception, there is no evidence that any of these debts is referable to the period when the parties lived together, they having separated in February 2012, and I propose to disregard them. The exception is the husband’s debt to St George which is the loan for the purchase of his vehicle which is included as an asset. That loan will be included as a liability.

Item 18 – the husband’s further superannuation interest

The husband disclosed an interest in Australian Ethical Superannuation which was unknown to the wife and which he estimated to be valued at $5,000. That is the only evidence in relation to this asset.
Since the husband has reached the age of 65 years, I propose to treat the whole of the husband’s superannuation interests as property available for distribution.
I therefore find the assets and liabilities of the parties, for the purpose of these proceedings to be:

ASSETS
Husband	V Street and G Street, H Town Qld	800,000
Husband	100 per cent shareholding in E Pty Ltd · 54 per cent shareholder in the M enterprise · ANZ account …	667,641
Husband	ANZ account …	207
Husband	Motor Vehicles (details not known)	22,000
Husband	BT Superannuation	134,052
Husband	Australian Ethical Superannuation	5,000
Wife	Motor vehicle (unregistered Holden Astra)	2,000
Wife	Commonwealth Bank account … (50 per cent)	2
Wife	Commonwealth Bank account … (50 per cent)	1
Wife	Commonwealth Bank account … (50 per cent)	250
TOTAL	1,631,153

LIABILITIES
Husband	National Australia Bank mortgage (…)	405,000
Husband	National Australia Bank mortgage (…) (on behalf of E Pty Ltd)	570,000
Husband	St George debt	20,000
TOTAL	995,000
NET ASSETS	636,153

Of the net assets available for distribution, the wife currently holds assets of $2,253 and the husband holds the balance.

THE COMPETING APPLICATIONS

The wife seeks an order that the husband pay to her the sum of $120,000 and that, in addition, she be allocated $120,000 from his superannuation entitlements.
The husband asks the Court to make no adjustment in favour of the wife such that each would retain the property they currently have.

SECTION 79(2)

Section 79(2) of the Family Law Act 1975 (Cth) (“the Act”) provides that the Court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
The wife seeks an order that the husband pay her a sum of money.
The husband submitted that no order should be made which requires him to pay money to the wife.
The parties were in a relationship between September/October 2006 and February 2012. There was a child born of the relationship, a daughter aged eight years who lives with the wife.
They acquired a joint asset, the shareholding in E, which is a valuable asset. After separation, the wife’s shares were transferred to the husband.
The husband wishes to retain that asset.
It would not be just and equitable if the whole of the assets acquired during the relationship were retained by the husband.
Accordingly, it is just and equitable to make an order for property settlement.

CONTRIBUTION

Although there is no evidence before the Court of the value of the H Town property at the commencement of co-habitation, it seems safe to assume that the value was substantially in excess of the small amount of superannuation and $6,000 in cash which the wife contributed to the marriage.
In addition, the wife deposed that the husband owned two properties in Sydney although there is no evidence of the value of those properties or what became of them.
The wife worked in paid employment from the commencement of co-habitation in October 2006 until approximately October 2007 when, because of her mental health problems, she was unable to continue to work. It is reasonable to assume that the husband made a contribution to the wife’s care during that period.
The parties’ child was born in 2008, and the mother was primarily responsible for her care and the care of the home thereafter. In February 2011, the wife again commenced paid employment.
The enterprise of E was commenced in mid-2011 using funds which were raised by way of mortgage over the H Town property.
The amount required by E to purchase the share in the management rights of the M was $1,539,000. Of that sum, $570,000 was raised by second mortgage against the husband’s H Town property and the balance was obtained by way of a mortgage to the National Australia Bank secured over the manager’s unit.
Thus, the H Town property was brought into the relationship by the husband and the only other valuable property, the E shares, was acquired using the husband’s assets.
The wife worked full time for E from October 2011 until February 2012, when the parties separated. The wife’s association with E was limited, the company having been incorporated in mid-2011 and the parties separating in February 2012.
Following separation, the husband assumed control of E and the wife resigned as a director and shareholder. The husband received all of the income from E but was also responsible for the mortgage payments.
The net assets of the parties (including superannuation) which are available for distribution are $636,153. The whole of that asset pool had its genesis in the H Town property. The husband still retains the H Town property and the E interests were purchased because the parties were able to raise a mortgage over the property.
The wife’s most significant contribution is her parenting of the parties’ child since her birth. Since February 2012, that contribution has been made almost entirely by her since the husband has spent very little time with the child.
I assess the wife’s contribution to the asset pool to be 20 per cent.

THE WIFE’S ALLEGATIONS OF FAMILY VIOLENCE

It was not submitted on behalf of the wife that her contributions had been made more onerous by virtue of family violence. Rather, it was submitted that the Court should make an assessment of her entitlement to an adjustment, pursuant to section 75(2) of the Act, which reflected her assertion that her mental health had been adversely affected by family violence.
The wife’s mental health and its causation was a significant issue in the parenting proceedings and a matter which the family reporter, Mr W, dedicated a considerable portion of his report.
In her affidavit sworn 15 December 2015, the wife deposed that her mental health history began as a teenager. She deposed that from about the age of 16 years she started to smoke marijuana and suffered from depression and suicidal feelings. As a teenager the wife was taken to see a psychiatrist by her parents. The psychiatrist diagnosed a bipolar disorder and prescribed medication. On one occasion, when she was 17 years old, she overdosed on her medication and was admitted for some time to X Hospital. There was a second occasion when she took more than the prescribed dose of medication and was admitted to X Hospital.
When the wife was 18 years old she moved away from her family home in the X Town and moved to the North Coast of New South Wales. She appears to have become estranged from her family. In late 2006, the wife moved to be closer to her biological father and biological paternal grandmother in S Town. The wife’s biological father had issues with substance abuse.
The wife deposed that, while living in S Town with the husband, she had a “nervous breakdown”. She deposed, “I could not go to work. I could barely function. My mental health began to plummet. I was anxious, confused and panicky.” The wife attended various doctors and psychologists and was prescribed various medications by a variety of doctors.
In May 2011 the wife’s biological mother died. She had been the victim of childhood sexual assault for many years and struggled with her own mental health. She took her own life.
The wife’s treating psychologist, Ms Y, in her report dated 14 January 2016, stated that the wife’s history included a diagnosis of Bipolar II Disorder.
In the course of preparation of the Family Report, Mr W reviewed the material produced on subpoena by the wife’s treating doctors.
Mr W reported:
[The mother] … appeared to minimise her past mental health issues and underplay the significance of her psychiatric history. This is somewhat understandable given the context of these Family Court proceedings. However, it is of concern given the extensive subpoenaed material about her long standing psychiatric history that [the mother] is reportedly not under the care of a treating psychiatrist. It appears that [the mother] has, at times, had insight into her own mental ill health, and has engaged honestly with mental health professionals by informing them of the symptoms she is suffering from, which included: hallucinations; aggressive and violent behaviour; suicidal ideation; panic attacks; paranoia; violent mood swings; an inability to regulate her emotional state; hypomania and depression.
Subpoenaed material appears to support [the father’s] claims that [the mother] suffered from mental health problems during their relationship and that she did not claim to be the victim of family violence to agencies or mental health staff who provided her with assistance. This does not, however, mean that she was not.

There is a long history of the wife’s psychiatric ill health dating back to her childhood. There is no evidence from a psychiatrist qualified to express an opinion as to the causes of her present condition. Her treating psychologist does not appear to have read and considered the records of the psychiatrists who previously treated her.
The wife has not established that her present mental health problems were caused or exacerbated by the behaviour of the husband.

SECTION 75(2) ADJUSTMENT

On behalf of the wife it is submitted that there should be an adjustment in the range of fifteen to twenty per cent in her favour. In support of that submission, the wife relies upon documents tendered in her case indicating that she suffers from functional non-epileptic seizures and an affidavit of her treating psychologist, Ms Y, annexing a report dated 14 January 2016.
Ms Y reports:
Over the last 2.5 years [the wife] has improved her family relationships, as well as her own personal circumstances. She is stable in her personal relationships as well as her working life, and is currently focused on developing a business to facilitate independence.
Ms Y expressed the view that the mother currently suffers from post-traumatic stress disorder.
Ms Y stated in her report, “[c]urrent trauma systems are generally manageable with consistent treatment, however continue to exacerbate when exposed to triggers, or when feeling vulnerable or unsafe.”
Whilst the wife may be able to earn some income from her developing business, it is unlikely that that income will be substantial. The position in relation to Mr U however is not so clear. He will commence paid employment in August 2016, but there is no evidence before the Court of the amount he might be able to earn. It would be reasonable to assume that once Mr U is awarded his doctorate, he will have the capacity to earn a reasonable income.
The wife will continue to have the care of the parties’ child and be required to house her.
The husband will continue to be subject to the requirement that he pay child support. Whilst I accept the evidence of the wife that in the past child support has been in arrears, at the time of trial, child support had been paid up to date.
The husband is 65 years old. He told the Court that he wishes to retire from his employment and live in the H Town property. It is not unreasonable, given his age, to assume that he will not be maintaining employment into the future. It is likely that the husband will have the income from E of $75,000 gross per annum, but he will remain liable for the interest only mortgage payments of $49,800.
The orders which I will make consequent upon my finding of the appropriate adjustment to the wife for her contribution entitlement will consume almost the entirety of the husband’s superannuation so that asset will not be available to him.
The wife will have the capacity to earn a small income and Mr U has the capacity to earn a reasonable income. It is likely that they will be in a position where their combined incomes substantially exceed that of the husband.
In those circumstances, there will be no adjustment for s 75(2) factors.

CONCLUSION

The wife will receive the equivalent of 20 per cent of the net assets, or $127,231.
She currently has assets of $2,253, so the husband must pay her $124,978, which I will round up to $125,000.
That sum will be paid from the funds available to the husband from his superannuation held with BT Lifetime Super.

I certify that the preceding one hundred and thirty-six (136) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 22 August 2016.

Associate:

Date: 22/8/2016

[2016] FamCA 692

22 August 2016

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Consent

Fiduciary Duty

Injunction

Remedies