Y and Y
[2007] FMCAfam 76
•22 February 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| Y & Y | [2007] FMCAfam 76 |
| FAMILY LAW – Property – alteration of property interests – financial resource – valuation – non-disclosure – future needs. |
| Family Law Act 1975, ss.75, 79 |
| Applicant: | Y |
| Respondent: | Y |
| File Number: | PAM4871 of 2005 |
| Judgment of: | Altobelli FM |
| Hearing date: | 15 December 2006 |
| Date of Last Submission: | 15 December 2006 |
| Delivered at: | Sydney |
| Delivered on: | 22 February 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr G. Watkins |
| Solicitors for the Applicant: | Slattery Thompson Solicitors |
| Counsel for the Respondent: | Mr D. Dura |
| Solicitors for the Respondent: | Equity Lawyers |
ORDERS
That the respondent husband pay to the applicant wife within two calendar months of this date the amount of $155,540.
Should the husband fail to pay the said sum in the time period required above the husband shall do all things necessary to cause the property at H being to be transferred to the wife as trustee for sale upon the following terms:
(a)The property is to be listed for sale by private treaty for a period of two months and in the event of it failing to sell within that period of time the property is to be listed for auction.
(b)The sale price and the reserve price at the auction are to be as agreed by the parties or failing agreement to be determined by the President of the Real Estate Institute of New South Wales or his nominee.
(c)The terms of the Contract for Sale are to be as determined by the wife.
(d)Upon completion of the sale, the net proceeds of sale are to be divided and paid as follows:
(i) legal costs and real estate agents commission on sale;
(ii) adjustments on sale;
(iii) any mortgage secured on the property;
(iv)the amount of $155,540.00 together with interest at the rate prescribed under the Federal Magistrates Act and Rules to the wife; and
(v) the balance to the husband.
In the event that any party fails to execute any document necessary to give effect to these Orders the Deputy Registrar of the Federal Magistrate’s Court at Sydney be appointed pursuant to s.106A of the Family Law Act to execute the document and do all acts and things necessary to give force and effect to these Orders and the defaulting party shall be liable for the costs of the other party obtaining the Deputy Registrar’s signature.
The husband is to indemnify the wife and keep the wife indemnified as regards all liabilities for income tax arising out of the marriage, the Westpac mortgage, and the St George Bank personal loan.
Unless otherwise specified in these orders:
(a)Each party 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 that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the banks’ record thereof, insurance policies are deemed to be in the possession of the beneficiary thereof and superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements.
(b)Each party 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.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
PAM4871 of 2006
| Y |
Applicant
And
| Y |
Respondent
REASONS FOR JUDGMENT
Introduction and overview
This is an application for alteration of property interests under s.79 of the Family Law Act initiated by the wife, B Y. The respondent is her husband, A Y. The parties were married in 1986 and separated in February 2005 after a 19 year marriage. They have three children, aged 17, 16 and 12. All three children live with their father, and D spends time with his mother. Parenting orders were made by consent on 26 May 2006.
At the hearing the applicant wife was represented by her counsel, Mr Watkins, and the respondent husband by his counsel Mr Dura.
At the commencement of the hearing both counsel provided me with three agreed documents. The contents of those documents are extracted below:
1. Schedule of Assets and Liabilities
Assets
Husband WifeH Property $410,000 $485,000
Toyota Lexcen $6,000 $2,500
Ford Forte $12,000 $14,000
Photography Business Nil $100,000
Household contents $10,000 $12,000
Jewellery $12,000 $8,000
Wife’s Superannuation $1,600 $1,600
Property in Lebanon $32,000 $86,000Liabilities
Husband Wife
Mortgage to Westpac $115,000 $20,000
Husband’s income tax debts $16,000 $14,000
Husband’s loan to L $45,000 $45,000
Wife’s debt to G $20,000 $20,000
Husband’s St George Loan Nil $15,0002. Agreed Assets
Toyota Lexcen $4,250
Ford Forte $13,000
Household contents $11,000
Wife’s Superannuation $1,6003. List of Issues
·Value of Matrimonial home
·Value of property in Lebanon
·Value of One Image
·Amount of mortgage debt to be included
·Whether the husband and wife’s personal debts ought to be included in the asset pool
·Whether the jewellery ought to be included in the asset pool
·Whether either party ought to receive a s.75(2) adjustment in their favour
Notwithstanding the list of issues, it became apparent that there was a further issue, namely the weight to be given to the contribution made by each of the parties under s.79 of the Family Law Act.
The documents relied on by the applicant wife are referred to in her outline of case document dated 14 December 2006, prepared by Mr Watkins. Her documents consisted of her amended application filed 20 October 2006, financial statement filed 20 October 2006, her affidavit filed 19 October 2005 and 20 October 2006. In addition, she relied on a valuation report dated 21 February 2006 prepared by CT. The said valuation indicated that in accordance with the expert valuer's opinion, the value of the former matrimonial home at H was $485,000 as at February 2006.
The documents relied on on behalf of the husband are set out in his outline of case document prepared by Mr Dura. His documents consisted of an amended response filed 25 October 2006, the husband's affidavit sworn 24 October 2006 filed 25 October 2006 and his financial statement filed 30 October 2006. The husband relied on a valuation dated 29 October 2006 prepared by G. P indicating that the current market value of the former matrimonial home is $410,000.
Brief history
As the parameters of this dispute were limited by the agreed list of issues, amended as I have indicated above by the inclusion of the issue of contribution, I do not believe it is necessary to go into a detailed history. By way of overview, however, the husband came to Australia from Lebanon in about 1969, acquired some property in Lebanon about ten years later, met his wife and married her in Lebanon on 20 July 1986 and the couple returned to Australia in 1987. They had three children whose ages are set out above during the marriage and the oldest child, R, who is now 17 years old appears to suffer from multiple sclerosis, a tragic occurrence for such a young woman and one which no doubt added to the pressure experienced in the household.
During their marriage the parties operated a number of businesses including a café, a takeaway shop and later the husband worked as a professional photographer in his own right. In about 1997 or early 1998 the parties purchased in the husband's name the property at H. In December 1999, the husband suffered an injury in the course of his employment with a company (not during the course of his work as a professional photographer) and subsequently received a compensation payment of $170,000. Between 1990 and 2002, but not necessarily for a continuous period, the husband's mother lived with the parties and seems to have been involved in assisting with caring for children and to some extent in the household. The marriage deteriorated to the extent that by early 2005 the parties had commenced a separation under the same roof, and this culminated in a physical separation in April 2005 when the wife left the former matrimonial home, the children residing with the husband in the home.
The above is merely a summary of the facts. To the extent that the facts are in contention, they will be discussed by reference to the contentious issues identified by counsel in their joint document entitled "List of Issues."
The issues
Value of the former matrimonial home
The valuation advanced by the wife's valuer was $485,000 but it is now 10 months old. The valuation advanced by the husband is dated 29 October 2006. During the hearing, counsel for the wife submitted that as a matter of fairness to the wife she should be allowed to prepare and file an updated valuation but counsel for the husband pointed out, and Mr Watkins for the wife conceded, that the wife was on notice of the husband's valuation dated 29 October 2006 as at 31 October 2006 when this matter had been set down for hearing before Donald FM at Parramatta. In other words, the wife has had more than ample time to update her valuation evidence but has failed to do so. That leaves me with no alternative but to accept the valuation prepared by GP dated 29 October 2006. Mr P swore an affidavit annexing the valuation on 14 December 2006. His valuation is comprehensive and includes six comparable sales in H between February 2004 and April 2006. I accept his valuation and find that the value of the former matrimonial home at H is $410,000.
Value of property in Lebanon
The husband and the wife agreed that the husband has a property in Lebanon but he says he only has a 50 per cent interest and she says he has a 100 per cent interest. The husband says his land in Lebanon is worth $32,000, but the wife says it is worth $86,000. The evidence about the valuation of this property was completely unsatisfactory. The husband provided no evidence other than the assertion in his financial statement that it was worth $15,000 notwithstanding the fact that in the schedule of assets and liabilities submitted by his own counsel, the value of his property in Lebanon was put at $32,000. The wife's evidence consisted of an annexure to her affidavit of a document purporting to be the translation of a valuation in Arabic by an "expert" in “topography and planning matters” expressing an opinion that the two pieces of property that, together, constitute the husband's property or the property in respect of which it is asserted he has an interest, has a value of US$64,500. This evidence is unsatisfactory and, of course, it could not be tested in evidence by the husband.
It is not disputed that the husband owned this property before marriage. The husband's evidence about the land is contained in paragraphs six and twenty five to twenty seven of his affidavit. Neither the wife's evidence about this land, or the cross-examination of the husband about his ownership of the land, assisted in providing any clarity about the extent of the husband's interest in the land, or its value. The valuation of overseas interests in lands, particularly in the Middle East, is a significant practical problem in family law property settlements in Australia. I accept that it might be difficult to value the property and that it would be equally difficult for the other party to the litigation to then test the evidence about value. Each party faces practical difficulties and expense in this regard. Nonetheless, the fundamental principal of Australian Family Law in this regard is that the duty to disclose, and disclose accurately, the value of the property remains on the person who owns it, namely the husband. I have doubts in this case as to whether the husband has discharged his duty of disclosure, and I discuss this further below. Nonetheless, the fact remains I cannot put a value on the interest of the husband's property in Lebanon and I do not even have satisfactory evidence to indicate what, precisely, is his interest in that property. However, I can treat it as a financial resource controlled by the husband, and I will treat it as a financial resource the value of which is not known, but which is, from the husband's perspective, substantial. Therefore, in relation to the second issue, I find that the husband owns property in Lebanon though I do not know precisely what is his interest or what is its value. It is, however, a substantial financial resource available to the husband.
Value of OI
OI is the business conducted by the husband as a professional photographer, in his own right. The husband's evidence was that he employs contractors from time to time but that the worth of the business was limited to the value of some equipment which, according to his counsel, would have a value measured in hundreds of dollars, and not thousands of dollars. In the schedule of assets and liabilities, it was asserted on behalf of the wife that the husband's business was worth $100,000. There was no valuation evidence in this regard. There was an assertion put to the husband in cross‑examination that he had thwarted attempts to value the business by not giving a valuer access to the shed from which the business was conducted, at the rear of the former matrimonial home. The figure advanced on behalf of the wife is sheer fantasy, unsupported by any evidence.
In the same way as I had concerns about whether the husband had complied with his duty of disclosure in relation to the property in Lebanon, I find that the husband has not co-operated adequately in making disclosure to the Court about the value of his business. His assertion of its value in the schedule of assets and liabilities is nil. In cross-examination by Mr Watkins he concedes that the cameras, computers and printers might be worth $800, $150 and $30 respectively. In his financial statement sworn 27 October 2006 the husband discloses an interest in a business known as “OI” but states that it has a nil value. He indicates in his financial statement that it is a property company/trust but produces no financial statements in relation to the same. Again, the evidence being completely unsatisfactory, I cannot establish the value of the husband's business, OI , but I find that it is a financial resource available to the husband. It is clear that at one stage, possibly in the 2004 financial year, he was earning $800 per week from this business.
Despite his assertion that he is “trying to work on and off” he also admitted in cross-examination that his last photography assignment was the day before the hearing, i.e. Thursday 14 December, and that the assignment before the last one was on the weekend before. Indeed, in cross-examination the husband described himself as “one of the most talented photographers in Sydney.” Despite the tendency of the husband to exaggerate and embellish the truth at times, I found this quite an insightful comment. I think that once he is removed of the distractions of a stressful separation, and these proceedings, the husband will be able to refocus on his business. I think he will have the capacity to earn a good income from the business but, in the present context, I have no evidence as to what its worth is and all I can do is to treat it as a financial resource in that the assets of the business, when combined with the talents of the husband as a photographer, give him the opportunity to earn an income.
In treating the business as a financial resource, I am very conscious of not giving it so much weight that when I treat the husband's ability to earn an income as a s.75(2) factor working in his favour, it will be double dipping against him. Should the husband ever complain about perceived double dipping, he should perhaps recall that the obligation to disclose the value of the business was always on him.
The amount of the mortgage debt
The mortgage debt in question is the mortgage to Westpac that is secured over the former matrimonial home at H. The wife asserts that only $20,000 should be included as a joint liability in the notional balance sheet consisting of the assets and liabilities of these parties. The husband says it should be $115,000, being the approximate current net balance owing to Westpac. The substantial difference arises in the following circumstances. At paragraph 14 of the husband's affidavit he acknowledges that as at 3 January 2006 the mortgage to Westpac had an outstanding balance of approximately $20,000. In paragraphs fifteen and sixteen of his affidavit he explains that later in January 2006 he re-drew $102,439 from the mortgage account causing it to increase to approximately $122,000, and that he used the funds to repay the outstanding St George personal loan, pay some monies owing to various creditors of his business, and then to meet living expenses.
The husband was extensively cross-examined about this redraw, particularly by reference to statements on the Westpac mortgage loan that referred to individual withdrawals. For example, the husband acknowledged that on 19 January 2006, the day after the redrawal, he withdrew $35,000 and paid it to his de facto wife. When asked what the payment was for the husband replied words to the effect that it is “being held by my partner to make sure we didn't run out of money to feed the children.” The husband could not recall whether the withdrawal was cash or by cheque but eventually conceded that it was probably by way of a cheque into his partner's bank account.
On 19 January 2006 there were two other withdrawals, of $5,000 and $7,000. However, he could not indicate who the $5,000 was paid to, though he said that at the time “a hundred people were hounding me for payment.” He could not recall exactly who was paid and in what sum but the husband emphasised that he was working intermittently at the time and relying on other people to assist him both financially and non financially. The husband agreed in cross-examination that the year before, in April 2005 for example, the business was successful at times, that he could provide a comfortable lifestyle - to use the words of the husband “as comfortable as a labourer could.”
On 20 January 2006 he withdrew $6,000, and then $20,000. The $20,000 went to pay the St George personal loan but could not recall what the $6,000 was used for. On 13 February 2006 there were withdrawals of $5,000 and $3.000. Indeed, the husband conceded in cross-examination that between the period of 19 January 2006 and 20 February 2006 he withdrew $86,000. And yet, the husband conceded that in his financial statement sworn on 19 December 2005, a month before the withdrawals commenced, he declared that he was earning $800 per week income and hardly any liabilities were disclosed. To be more precise however, Exhibit A2, the husband’s financial statement in question, refers to a “tax liability” of an estimated $11,000 due on 30 June 2005, assessed but unpaid tax of an estimated $3,000, the St George personal loans of $15,000, the loan from his brother G estimated at $45,000 and business liabilities of $6,000 being a single amount of $6,000 owed for albums and photo printing.
I find the husband's evidence about the use of the $86,000 completely unreliable. It is inconsistent with his sworn financial statement of 19 December 2005. I have no idea what he has used the money for. It is clear that some of it was paid to his current partner. The husband has a duty of disclosure to this Court and he has, in my opinion, failed to comply with that duty. The only way to do justice and equity to the wife as regards the mortgage debt is to accept the submission of her counsel, Mr Watkins, but for the purposes of the property adjustment between the husband and the wife, to treat the joint debt to St George as being $20,000.
Treatment of the husband's and the wife's personal debts in the alteration of property interests
Firstly, as I have only allowed $20,000 of the Westpac mortgage debt, I need to add back onto the balance sheet as a liability the St George loan of $15,000 as there is evidence to indicate that the redraw on the Westpac mortgage was used, at least in part, to discharge this liability.
There was a dispute about the husband's income tax debt but it is clear that this is a tax liability arising out of income earned during the course of the marriage and I therefore accept that $16,000 should be included as a liability.
The wife strenuously disputes the existence of a $45,000 debt from the husband to his brother, G. The husband's evidence in this regard is contained at paragraph 11 of his affidavit where he says, in effect, that in order to complete the purchase of the former matrimonial home he borrowed through Westpac with his brother, G, as guarantor. It should be noted that the loan liability does not arise as a result of the brother becoming a co-guarantor, but rather, according to the husband, because his brother continued to assist him financially in paying off the mortgage. The husband's evidence is:
I estimate that to date my brother has loaned me a total of about $45,000. My brother has no interest in the home but does require the money to be repaid. I hope to be able to come to some arrangement to repay my brother once these proceedings are finalised.
The husband explains in paragraph 12 of his affidavit that he attempted to have his brother swear an affidavit for these proceedings but his brother is overseas and will not be returning to Australia prior to the hearing and thus would not be available for cross-examination even if he were to swear to an affidavit. The wife's evidence is that she does not know about the loan from the brother and, she conceded in cross‑examination by Mr Dura for the husband that her husband was primarily responsible for the finances and there were things she did not know.
The wife's assertion that G did not assist with the mortgage was based, she says, on comments that the husband made to her. She said “my husband told me his brother never put a cent on the mortgage.” It is clear that G is a co-guarantor on the loan but it is by no means clear why this was the case. I fully understand and accept that the $45,000 liability does not derive from the fact that G was the co-guarantor but, as Mr Watkins, forcefully submitted to me, there are substantial issues of credit about the husband's evidence. There is more than enough evidence to satisfy me that the parties had a deposit to use towards the purchase of the former matrimonial home using the sale proceeds of a business that they had sold a few years earlier. It is entirely unclear to me why a co-guarantor was needed and I do not accept the evidence in paragraph 10 of the husband's affidavit that he borrowed money in order to raise the deposit.
There are so many aspects of the husband's evidence that, so far are unsatisfactory. I have found at least three instances so far, all referred to above, where the husband has failed in his duty of disclosure to this Court. He was often unresponsive and uncooperative in the cross‑examination by Mr Watkins. He frequently embellished his evidence, sometimes to ridiculous degrees, in order to emphasise what he had done. For example, he described some of his work in his business, including when he would “burn my eyes out to produce a digital album.”
When asked by Mr Watkins to explain why he was giving evidence about important matters not referred to in his affidavit, the husband said that he “did not mention a lot of things in my affidavit.” At one stage in cross-examination the husband sought to assert that the $800 per week income he swore to in his financial statement made on
19 December 2005 was, in fact, his “yearly income.” When cross-examined about the work that the wife made in assisting in his business on a regular basis he described that assertion as the “biggest lie she's ever come up with ... total fabrication that she helped me ... I begged her to help me.”
Again, in cross-examination by Mr Watkins, this time specifically dealing with how the former matrimonial home purchase was financed he was confronted with the assertion that no assistance was needed from the brother because the parties had funds to complete the purchase. The husband's response was to the effect “we ran short, $1,000, $4,000 or $3,000 at the time and for that reason my brother offered to help us out.” This is inconsistent with paragraph 10 of this affidavit that attempts to create the impression that if the parties “ran short” it was certainly for more than a few thousand dollars. I simply cannot accept the husband's evidence about the loan from his brother. Even if there is a loan, I am not satisfied that it will need to be repaid. There is no evidence from the husband about a claim for payment from his brother, or a time for payment, or any evidence about how it came to be that $45,000 was advanced. I find that the husband has a duty of disclosure in this regard which he has once again failed to discharge and, accordingly, I find that the husband's loan to G should not be included in the notional balance sheet for the purposes of the s 79 alteration of property interests.
The remaining contentious liability is the wife's personal liability to Mr A. She claims $20,000 in this regard. The wife's evidence is that her friend “Mr A lends me approximately $200 per week.” She gives no evidence about when this commenced. Her financial statement filed
20 October 2006 refers to the $20,000 as being an expense paid by others for her benefit, namely for furniture and rent. That same amount is referred to as a loan at item fifty under her liabilities. In Mr Dura's cross-examination of the wife she asserted that the debt had increased and that “now, it's more than $25,000-$30,000.” She explained that this money was provided in cash and was used to pay for legal fees as well as for furniture. She agreed that there was no written agreement with Mr A, that Mr A was in Court but was not on affidavit and that she spends time with him. He lives in the same complex of units as she does. The wife describes the relationship with Mr A as “not a romantic relationship with him - he is not a boyfriend.”
The wife's evidence about what she spent the money on in terms of the furniture that was acquired it is unusual in that, for example, two queen size beds were purchased, and other furniture all of which is quite inconsistent with her evidence that she lives in two rooms in an apartment. The evidence in relation to this loan to Mr A is unsatisfactory. He could have given evidence - indeed he was present in Court throughout the hearing. I infer that the reason he did not give evidence is that it would not have been helpful to the wife. I disallow the personal loan to Mr A claimed by the wife.
Jewellery
Each party asserts that they are in possession of jewellery that was owned at the time of separation. The husband says the jewellery is worth $12,000 and the wife says it is worth $8,000. That is the only evidence I have about the value of the jewellery. The husband's evidence in this regard is contained at paragraphs 68 and 69 of his affidavit. The effect of this evidence is that when the wife left the home she removed the jewellery including his jewellery, the children's jewellery and her jewellery. His evidence is that he has not removed any jewellery from the home. The wife's evidence is contained in paragraph 17 of her affidavit filed 20 October 2006. In substance, her affidavit is that when she went back to the home in early May 2005, with the police, to pick up her clothes and personal belongings her jewellery was not there.
In cross-examination the wife conceded that even though she was accompanied by the police, she did not tell the police that the jewellery was missing. Her explanation, however, is that “I didn't tell them because I didn't notice.” There was some very unclear, and unsatisfactory, evidence that the child D, who is aged 12, had indicated to the wife that he had seen the jewellery in the former matrimonial home. Indeed, at one point, a tender was made, and later withdrawn, of a handwritten document prepared by D containing a statement to the effect that the jewellery was in the home. I ruled that there would be no further cross‑examination on the issue of what representations D may have made in relation to the jewellery. I explained to the parties and their counsel that this litigation was causing enough damage to their family without D, who is a child, being embroiled in such a direct fashion in what was, after all, a relatively minor aspect of this litigation.
Mr Watkins withdrew the tender of the document, which is much to his credit. Both counsel agreed that D would be kept out of this matter. The wife was extensively cross-examined by Mr Dura about the husband's assertion that she had removed the jewellery. She was very firm in her responses. The husband was not cross-examined in any detail about the jewellery. I am unable to make a finding about the jewellery.
Contribution
Strictly speaking, in the list of issues submitted by the parties the seventh issue was s.75(2) adjustment, but as it became apparent during the course of the case the contribution was very much a live issue, I added contribution to the list of issues and think it is appropriate to deal with this first, before looking at s.75(2).
Mr Dura's closing submissions for the husband indicated that the contribution based entitlement to the husband should be 60:40 to reflect the husband's property in Lebanon, the assistance provided by the husband's mother to the family over an extended period of time, but more significantly the husband's worker's compensation payment. In this regard, the husband's evidence at paragraphs 17 to 24 relates to the injury he suffered, the compensation he claims, the compensation he received, and the disabilities he continues to suffer. He asserts that $100,000 was used to reduce the mortgage to Westpac. This is actually not disputed by the wife. The sum of $30,000 was used to renovate the former matrimonial home, between $12,000 and $13,000 was used to buy the Toyota Lexon motor vehicle which is currently in the wife's possession.
Even Mr Watkins, counsel for the wife, conceded that the combined effect of the ownership of the Lebanese land, and the worker's compensation claim, would result in a five per cent extra adjustment to the husband on contribution. It is clear that both the husband and the wife made financial and non-financial contributions throughout the course of a lengthy marriage. Their contributions may not have been, qualitatively and quantitatively, the same either at specific times during the marriage, or viewed in its entirety. However, the weight to be given to different types of contribution over such a long period of time is such as to moderate towards equality. The only distinctive contribution is that of the worker's compensation claim, $100,000 of which, it is agreed, went to reduce the mortgage and therefore increase the equity in the home. That contribution came in three quarters of the way through the marriage. This is not a large pool of assets and $100,000 coming in in the last quarter of the marriage must have a meaningful impact, in my opinion, on contribution.
I am conscious of the fact that both counsel also referred to the impact of Lebanon, but I have found that that property should be treated as the financial resource of the husband for the reasons I set out above. Nonetheless, I accept Mr Dura's submission that there should be an adjustment of ten per cent in favour of the husband based on contribution in the broad sense, and taking into account the matters referred to above.
Section 75(2) adjustments
Mr Watkins submitted that there should be a ten per cent adjustment in favour of the wife having regard to the evidence about the wife's illness, inability to find work, and based on the disparity of earning capacity. Mr Watkins' submission was, in effect, that even if the wife could go back to full-time employment, her capacity to earn would be not nearly as great as that of the husband. In addition, he sought to advance a s.75(2) claim based, in part, on the need for the wife to make provision for the care of the children should they come to live with her. But that is entirely speculative and the consent orders made on 26 May 2006 provided for the youngest child D to live with his father, and as for the older children, for their applications to be dismissed. I do not accept that there is any s.75(2) adjustment based on this possibility.
For the husband a s.75(2) adjustment to the extent of fifteen per cent was claimed. This was based on the fact that the husband was primarily providing for the three children of the marriage, the oldest one of which has special needs in the form of multiple sclerosis, but all of which are dependent on the father without any support from their mother.
The evidence of the capacity for employment of both the husband and the wife is unsatisfactory. I find that both have a capacity to work gainfully, and in appropriate employment, and I suspect this capacity will manifest itself as soon as these proceedings are completed. However, the reality is the husband's capacity for employment is greater than the wife's, but for the fact that he will be primarily responsible for the care of the children of the marriage. He could clearly earn more than the wife, were it not for the fact that he will be caring for the children. Whilst there is some evidence about the husband's ongoing disabilities following his work related injury, it does not appear to have had any serious impact on the husband being “one of the most talented photographers in Sydney.” Whilst there is evidence that the wife suffers from depression, she has not sought work for several months but seems to me to be quietly confident that she could find work in a café.
There are s.75(2) factors in this case, but they do not arise, or are not in any way significantly based on the capacity of either the husband or the wife to work. The s.75(2) factors arise from the fact that the husband will have the responsibility to provide for the three children of the marriage in a situation where the wife's financial contribution will be minimal. Under the circumstances, I think an adjustment of ten per cent in the husband's favour would reflect the additional needs that he has in this regard.
However, the husband has also engaged in non- disclosure in relation to various issues. I do not know what he did with the money he re-drew from the Westpac mortgage account. He has the land in Lebanon and his business, both of which I am unable to value but which are valuable financial resources in his hands. These financial resources, in my opinion, and doing the best I can on the basis of the evidence the quality of which was often poor, off-set the s.75(2) adjustment the husband would otherwise be entitled to receive.
Final balance sheet
Having regard to the findings that I have made above, therefore, the balance sheet in this matter would be as follows:
Assets (as agreed or determined by the court)
H $410,000 H
Toyota Lexcen $4,250 W
Ford Forte $13,000 H
Household contents $11,000 H
Wife’s Superannuation $1,600 W
$439,850Liabilities (as agreed or determined by the court)
Mortgage to Westpac $20,000 H
Husband’s income tax liability $16,000 H
Husband’s St George Loan $15,000 H
$51,000Net Assets for s 79 purposes $388,850
Disallowed Liabilities
Balance of Westpac Mortgage $95,000
($115,000 less $20,000)
Husband’s loan to G $45,000
Wife’s debt to Mr A $20,000Financial Resources
OI Value not known
Jewellery Value not known
Property in Lebanon Value not known
Result
Husband 60% of net assets-$388,850= $233,310
Wife 40% of net assets-$388,850= $155,540Husband Wife
Home $410,000 Lexcen $4,250
Contents $11,000 Super $16,00
Ford $13,000
_________ _________
$434,000 $5,850Westpac ($20,000)
Income tax ($16,000)
Personal Loan ($15,000)
_________
$383,000Pay to wife ($149,690) Payment from husband $149,690
_________ ________Net to Husband $233,300 Net to Wife $155,540
Overall result and just and equitable?
The final question I need to ask myself is whether the overall conclusion of 60:40 in favour of the husband, and the payment required to the wife, is just and equitable under the circumstances? The orders sought by the husband at the hearing was that he pay to the wife the sum of $30,000. It is evident that he wishes to retain the former matrimonial home, if at all possible. In her amended application, the wife sought $362,000.
The net result of these orders would be to give the opportunity to the husband to pay the wife out in the sum of $155,540. He will have two months in which to do so after which the house will need to be sold in accordance with the orders I make. Even though he already owes $115,000 to Westpac, it is not inconceivable that he could borrow moneys from some source secured by the remaining equity in the home.
I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of Altobelli FM
Associate: Lisa Molloy
Date: 22 February 2007
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