Yardley and Yardley
[2011] FMCAfam 1172
•11 November 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| YARDLEY & YARDLEY | [2011] FMCAfam 1172 |
| FAMILY LAW – Property settlement – assessment of contributions – assessment of non-contribution considerations – adjustment for superannuation where no splitting order sought. |
| Family Law Act 1975, ss.75(2), 79 |
| Hickey & Hickey; A-G for Commonwealth (Intervener) [2003] FamCA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355 C & C [2005] FamCA 429, (2005) 33 Fam LR 414, (2005) FLC 93-220 Cabbell & Cabbell [2009] FamCAFC 205 Norman & Norman [2010] FamCAFC 66 |
| Applicant: | MS YARDLEY |
| Respondent: | MR YARDLEY |
| File Number: | PAC 3851 of 2010 |
| Judgment of: | Halligan FM |
| Hearing dates: | 22, 23, 29 September 2011, 7 November 2011 |
| Date of Last Submission: | 29 September 2011 |
| Delivered at: | Parramatta |
| Delivered on: | 11 November 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Bolger |
| Solicitors for the Applicant: | Lex Fori Lawyers |
| Counsel for the Respondent: | Ms Druitt |
| Solicitors for the Respondent: | Mosca and Scott Solicitors |
ORDERS
So much of the orders made on 18 May 2011 as were made in accordance with the Terms of Settlement then marked Exhibit B, providing for the sale of the parties’ properties at [P] and [R], are discharged.
The parties shall do all such things and sign all documents as may be necessary to effect the sale of the property known as
Property P, (“[P]”).
[P] shall be listed for sale with such real estate agent as the parties may agree in writing from time to time.
In the event that [P] is not the subject of exchanged contracts for sale by 4pm on the date 3 months from the date of these orders, the Respondent Husband shall make all such arrangements and do all such things and sign all such documents and pay all moneys necessary to procure a sale by public auction of [P], upon the following terms:
(a)The auctioneer shall be the real estate agent appointed under Order 3 above or such auctioneer as the said agent shall nominate.
(b)The auction shall take place 6 weeks after the period of 3 months referred to above shall have expired.
(c)The reserve price for [P] shall be as agreed between the parties and if there is no agreement the reserve price shall be as advised by a valuer nominated by the President of the Real Estate Institute of New South Wales.
(d)The Respondent Husband shall be responsible for the auction expenses payable before [P] is auctioned and the Husband shall be entitled to a refund of such expenses at completion of the sale.
In the event that [P] is not sold by auction or private treaty within 14 days after the said auction, the Respondent Husband shall do all such acts and sign all necessary documents and pay all moneys, necessary to procure a second auction within a further period of 5 weeks from the date of the first auction, but otherwise upon the same terms and conditions as apply to the first auction except that the reserve price shall be only 90% of the reserve at the immediately preceding auction. This cycle of auctions shall then re-occur until [P] is sold, with the reserve adjusting each cycle to 90% of the reserve last set.
Upon completion of the sale of [P] the proceeds of sale are to be applied as follows:
(a)To pay all costs and commissions in relation to the sale of [P] including a refund to the Husband of the auction expenses he has paid out.
(b)The Wife to receive 50% of the sale proceeds plus $100,000.
(c)The Husband to receive the balance of the sale proceeds.
The parties shall do all such things and sign all documents as may be necessary to effect the sale of the property known as Property R (“[R]”) being the whole of the land described as Certificate of Title volume [omitted] in the State of Qld.
The listing price for [R] shall be as agreed between the parties.
[R] shall be listed for sale with a real estate agent as agreed and the parties shall instruct Queensland solicitors/conveyancers to prepare the contract for sale and have the carriage of the sale on behalf of both parties.
In the event the parties can not agree on price agent or solicitor/conveyancer, then the President of the Real Estate Institute for Qld shall nominate such and the cost of such nomination shall be born equally by the parties.
In the event that [R] is not the subject of exchanged contracts for sale by 4pm on the date 9 months from the date of these orders, the Respondent Husband shall make all such arrangements and do all such things and sign all such documents and pay all moneys necessary to procure a sale by public auction of [R], upon the following terms:
(a)The auctioneer shall be the real estate agent appointed under Order 9 or 10 above or such auctioneer as the said agent shall nominate.
(b)The auction shall take place 6 weeks after the period of 9 months referred to above shall have expired.
(c)The reserve price for [R] shall be as agreed between the parties and if there is no agreement the reserve price shall be as advised by a valuer nominated by the President of the Real Estate Institute of Queensland.
(d)The Respondent Husband shall be responsible for the auction expenses payable before [R] is auctioned and the Husband shall be entitled to a refund of such expenses at the completion of the sale.
In the event that [R] is not sold by auction or private treaty within fourteen (14) days after the said auction, the Respondent Husband shall do all such acts and sign all necessary documents and pay all moneys, necessary to procure a second auction, within a further period of 5 weeks from the date of the first auction, but otherwise upon the same terms and conditions as apply to the first auction except that the reserve price shall be only 90% of the reserve at the immediately preceding auction. This cycle of auctions shall then re-occur until [R] is sold, with the reserve adjusting each cycle to 90% of the reserve last set.
Upon completion of the sale of [R] the proceeds of sale are to be applied as follows:
(a)To pay all costs and commissions in relation to the sale of [R] including a refund to the Husband of the auction expenses he has paid out.
(b)The Wife to receive 50% of the sale proceeds.
(c)The Husband to receive 50% of the sale proceeds.
The Husband shall retain to the exclusion of the Wife all his right, title and interest in the property known as Property S, [S].
As between the Husband and the Wife, the investment in the name of the Husband as trustee for [X] with [B] Investment Management Pty Ltd is declared to be the sole and beneficial property of [X] as and from this date.
Except as otherwise provided in these orders, the Husband and the Wife are each entitled to be the sole legal and beneficial owners of all items of personal property including money, motor vehicles, superannuation, insurance, equities, furnishings, furniture, household effects and personal effects currently in the possession or control of each other respectively.
The parties shall do all acts and things and execute all documents, instruments, authorities and writings and give all consents necessary to give effect to the Orders herein, and in the event of either party neglecting or refusing to execute such Deeds, documents etc, the Registrar is hereby empowered to execute such Deeds, documents etc pursuant to Section 106A of the Family Law Act 1975.
IT IS NOTED that publication of this judgment under the pseudonym Yardley & Yardley is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAC 3851 of 2010
| MS YARDLEY |
Applicant
And
| MR YARDLEY |
Respondent
REASONS FOR JUDGMENT
Introduction
These are contested property settlement proceedings under the Family Law Act 1975.
Both parties ultimately sought orders for the sale of the parties’ jointly owned matrimonial home at [P] and jointly owned land at [R], and the division of the proceeds between them. They differed on the distribution of those proceeds. The Wife ultimately sought 60% of the proceeds of each, and the payment to her of $120,000 out of the Husband's share of the proceeds of sale of the [P] property. The Husband ultimately proposed that the Wife receive 40% of the proceeds of sale of both properties, and $50,000 out of his share of the proceeds of the [P] property. Both parties proposed that otherwise, each party retain their respective property and superannuation interests.
Background
The Wife is aged 51, having been born [in] 1960, while the Husband is aged 49, having been born [in] 1962. The parties married [in] 1987 and separated under the one roof in March 2009 according to the Husband or on 29 April 2010 according to the Wife. Both continue to live in the matrimonial home.
There are two children of the parties’ marriage, [X] born [in] 1989 aged 22 and [Y] born [in] 1992 aged 19.
Interim consent orders were made on 18 May 2011 for the sale of the [P] and [R] properties and distribution of the sale proceeds 40% to each of the parties and retention of 20% pending the determination of these proceedings. It was confirmed by both parties a few days before the delivery of these reasons and the making of the orders that the sale of neither of those properties was approaching settlement.
Credit
The witnesses were the parties and the Husband's father. I am not satisfied any significant credit issues arose in relation to the evidence of the Wife.
The Husband admitted his evidence in chief was wrong in a number of respects in relation to assertions that the Wife made no financial contribution and he made significant non-financial contributions. I was also concerned that the Husband was not candid in his evidence about the reason he “reimbursed” his parents $10,000, his denial of having spent any money on renovations to a property at [S] in which he has an interest with his parents and sister being contradicted by his father, who said the Husband gave him roughly $8,000 to $10,000 as a contribution to those renovations.
However, the Husband's father denied that the Husband had given him any money other than for the [S] property, while the Husband asserted his father had given him significant additional sums (almost $35,000 apart from money for the deposit on the [S] property and apart from a sum of $5,000 about which the Husband's evidence in cross-examination raised significant doubt) which he had then repaid to his father. While the Husband produced bank account records to evidence the receipt into his account of the sums he said he received from his father, he did not produce any bank records to evidence their return to his father.
If the Husband had retained these funds, it would have been an additional direct financial contribution he could have relied on in a case where there was a significant issue about each parties’ contribution based entitlement. In fact, the Husband's counsel conceded that no submission would be made that the receipt of these funds by the Husband from his father gave rise to a contribution of any kind by or on behalf of the Husband. I am therefore satisfied that the Husband's evidence that he returned this money to his father is more likely to be true, it being in the nature of an admission against interest. This therefore raises questions about the reliability of the evidence of the Husband's father.
I therefore find the Wife to be a more credible witness than either the Husband or his father. Having said that, the Wife's evidence in relation to her employment history was confused and confusing, and I am satisfied that, while she did the best she could, her ability to accurately recollect the detail of past events is not particularly good. It was also the fact that the Husband did not confide in the Wife in relation to much of his financial affairs and dealings, and hence the Wife simply could give no evidence from her own knowledge on a number of matters.
The evidence
Assets and contributions at marriage
The Wife's unchallenged evidence, which I accept, is that at marriage she owned a motor vehicle, had $5,000 in savings, and owned a one third share in a property at [W], her mother and brother owning the remainder of that property. She also owned gold and silver jewellery. The Husband owned a motor vehicle. Neither party had any liabilities at marriage.
The Wife received $4,000 from her brother and mother which she gave to the Husband to use prior to the wedding. She also paid $500 for a six tier wedding cake and paid an unspecified sum “for pink satin material and the under layer for the bridesmaid dresses”.
The Husband’s unchallenged evidence, which I accept, it that he bought an engagement ring for the Wife at a cost of $6,000 and two gold wedding rings at a cost of $450, and he paid $3,500 for the wedding dress and his parents paid $10,500 for the wedding reception.
At the wedding, the parties received cash gifts totalling between $12,000 and $12,500, which the Husband gave to his father. The Wife asserted that she did not see this money again and was unaware what happened to it. The Husband said that on the parties return from their honeymoon, his father gave the cash gifts back to him, in cash, and he used those funds to buy furniture.
The parties kept separate bank accounts during the marriage, and the Husband was secretive about his financial affairs, not informing the Wife about significant aspects of his financial dealings. It therefore is not inconsistent with the Wife's own evidence that if the Husband had received these funds back from his father and used them as he says that she would be unaware of it. I therefore find that the money was returned to the parties and used for their mutual benefit.
The Husband was the joint proprietor with his parents of a [omitted] business when the parties married. This business closed within about 18 months after marriage when the lease of the [business] site was not renewed.
There is no evidence that the Wife made any contribution to the [W] property or received any income or other benefit from it during the parties’ marriage until it was sold and she received her share of the proceeds in about late 2003.
Employment history
After the [omitted] business closed in 1989, the Husband worked throughout the parties’ marriage, as a [occupations omitted]. He currently works as a casual [omitted].
The Wife was in employment at marriage. She was retrenched about a month after marriage and received about $2,800 redundancy payment, which she spent on household expenses. She promptly secured further employment, and worked until shortly before the birth of the first child. After the birth of the first child, the Wife resumed part time work until the birth of the second child. She again resumed part time work after the birth of the second child.
The Wife was working in [workplace omitted] when her employment ceased in 2002, she said due to her “incapacity for work from injury”.
The Wife said that after her employment was terminated in 2002, she attended doctors, physiotherapy, water therapy and the gym to strengthen her lower back and add mobility to her right shoulder and neck. She said she was also suffering from carpel tunnel syndrome as a result of performing repetitive work. There was no admissible expert opinion evidence in the Wife's case of a diagnosis of carpel tunnel syndrome or of any other condition that, in the opinion of the expert, impinged on the Wife's ability to work then or now. She also said that after finishing work at [omitted] it was hard to find a job because of her “pain and injuries, and going through depression”. There is no admissible expert opinion evidence of a diagnosis of depression, other than an unsigned Centrelink medical certificate dated 22 March 2011 from the Wife's general practitioner stating that the Wife had been diagnosed with “depressive anxiety disorder”, the date of onset of which was 22 March 2011.
The Wife continued seeking part time employment from friends and relatives from 2002 up to 2006, earning approximately $200 to $250 per week.
From 2005 or 2006 to about 2007 or 2008, the Wife conducted a business [omitted] five or six times a year. This business was not successful.
For a time after the Wife's business ceased until the Wife commenced a TAFE course in 2010, it is not clear what employment the Wife had, if any. She has not worked while undertaking TAFE courses in 2010 and this year.
I am satisfied both parties have contributed the income they have earned since marriage for the benefit of the household.
Property acquisition
The Husband has had an [omitted] membership since 1987, costing initially $400 but now costing $1,200 per year.
After marriage the parties lived in rented accommodation for about six months. They then lived in a property owned by the Husband's uncle for the next 13 years.
The parties paid the rates on the Husband's uncle’s property while they lived there, but otherwise their occupancy of the premises was rent free. The Wife said the parties had been paying rent of $300 per week before moving to the Husband's uncle’s property, and that she had calculated how much rent they had saved while living there and it was $20,000 per annum.
In 1988 or 1989, the parties bought vacant land at [R] in joint names for $19,000. There was no mortgage on the property.
In 1989, the Husband and his parents purchased a property at [B] for approximately $160,000, borrowing $130,000. Despite saying “we”, that is he and his parents, borrowed the $130,000, the Husband later said he alone was the borrower. In cross-examination, he admitted the assertion he was the sole borrower was incorrect. He said his parents contributed the deposit of $30,000, and used another property they owned as security for the purchase. His father corroborated this evidence. I am satisfied that the Husband entered into the purchase of this property without discussion or consultation with the Wife.
The [B] property was rented out, and the Husband's parents paid the difference between the rental income and the mortgage repayments until July 1995. During this period the rent was about $680 per month, and the Husband's parents paid a further $1300 per month and paid all water rates, council rates and insurance.
In 1995, the Husband's parents transferred their half interest in the [B] property to the Wife for $1. The property was valued at the end of 1994 at $175,000. The Wife said the Husband told her there was a second mortgage on the property of $30,000. She denied being told by the Husband there was a mortgage of $75,000 on the property. There was in fact no mortgage on the property, although there was a loan for the purchase of this property secured on the Husband's parents’ home. The Husband said there was approximately $75,000 outstanding on the loan in relation to the [B] property secured over his parents’ home. Despite my concerns about the reliability of the Husband's evidence, I accept his evidence as to the loan balance at that time, as it results in there being a lesser equity, and hence a lesser value, in the gift from the Husband's parents, than the amount the Wife said she was told was outstanding. It is also clear that the Wife had no independent knowledge about the finances concerning this property.
I therefore find that the equity in the [B] property at the time a half interest in it was transferred to the Wife was $100,000.
The Wife paid half the cost of the transfer into her name of the Husband's parents’ interest in the [B] property to the Husband, $800 in cash.
The Husband said that when his parents’ interest in the [B] property was transferred to the Wife, the property was tenanted at $150 per week. He said he “paid the difference on the loan as well as paid council rates, water rates, insurance and other maintenance” until it was sold in 1999. The Husband did not say what “the difference on the loan” amounted to. I accept this evidence.
On 30 December 1997, the Husband received a personal injuries payment of $24,274.67. He gave no evidence of the nature of the injuries for which he received compensation, or how or when he incurred the injuries. The Husband gave no evidence as to the use to which these funds were put.
In 1999 the parties bought vacant land at [P] and sold the [B] property. The parties had accumulated some savings by this time. There is no evidence of the amount of those savings.
The land at [P] cost $127,000, and was bought shortly before [B] sold. The purchase price was met from savings and $45,000 the Husband borrowed from his father without the Wife's knowledge. The Husband repaid his father the $45,000 a few months later from the proceeds of sale of the [B] property, again without the Wife's knowledge.
The Wife said the [B] property sold for $360,000. The Husband said it sold for $245,000. Despite the consideration paid for this property being a matter of public record with NSW Land and Property Information, neither party put a copy of the transfer or any other documentary evidence of the actual sale price into evidence.
The Husband received the cheque payable to the parties for the net proceeds of sale of the [B] property and deposited it into his sole bank account. He said the net proceeds were $227,000 after meeting agent’s fees of $6,500. Mathematically, this cannot be correct, as the net proceeds after a deduction of $6,500 would be $238,500. Even if the legal fees on the sale of [B] and purchase of [P], which the Husband said were $3,000, were paid from the proceeds of [B], the net proceeds would have been more than $227,000. He also said they incurred legal fees of $6,000, but did not say what they were for. If legal fees for the sale and purchase totalled $9,000 and were paid from the proceeds of [B], albeit the Husband does not assert this was what occurred, the balance would have been $229,500, still more than the net proceeds according to the Husband. The Husband was not cross-examined about this apparent discrepancy, nor was it put to him that [B] sold for $360,000, or that he had retained part of the proceeds of sale for his own use.
The Wife said the proceeds of sale of [B] were used to pay the purchase price of [P] and to pay for the cost of construction of a home on the land, which she said amounted to $120,000, and to pay for additional landscaping and a swimming pool and balconies at an additional cost of $50,000. The total of these expenditures is $297,000. If [B] sold for $360,000, that would have left a surplus of $63,000, less the costs of sale and purchase, which at their highest on the Husband's evidence were $9,500, still leaving $54,500 unaccounted for on the Wife's version of events. However, as already mentioned, the Husband was not cross-examined to suggest he had retained funds from the sale of [B].
The Husband said the house cost $142,400, a pool cost $16,000, carpet $6,000, tiling $7,000, a pool fence $2,700, fencing $2,000, concreting $10,000 and a bar $4,000. He said they also incurred legal costs of $6,000. It was not explained what these costs were for. The evidence of the Husband's father was that he provided financial assistance to the parties by paying for the pool ($16,000) and fencing ($2,700).
The evidence does not enable me to make clear findings as to the sale price of [B], the net proceeds the parties received from that sale, or what was done with the net proceeds of sale, beyond being satisfied that $45,000 was used to repay the Husband's father for a loan in that amount for the purchase of the [P] land, and a significant part of the remainder was used to pay for the construction of a home and other improvements on that land. In the absence of any evidence to suggest the Husband retained for his sole benefit any part of the proceeds of sale, I am satisfied it is more likely than not that any surplus of the proceeds of sale after paying for the land, house construction and other improvements was used for the benefit of the household.
In June 2000, the Husband, his parents and his sister bought an investment property at [S], his parents owning half, and he and his sister each owning a quarter share. He gave no evidence about how the purchase was funded. His father said he and his Wife bought the property in the names of themselves and their son and daughter. He said the property cost $145,000, and was bought as in investment for the benefit of the four co-owners. It was not put to the Husband or his father that the Husband contributed any part of the purchase price of this property, and I am not satisfied that he did so.
The parties occupied the [P] property in 2001.
In 2002, the Wife received a workers compensation payment of $45,000 which was used “to fix the brick fence of the family house”, presumably the [P] property. There was only inferential evidence that this may have been for injuries she had acquired by then, when she was working in [omitted]. However, there was no direct evidence about the nature or cause of the injuries for which she was compensated, or how or to what extent they affected her ability to work at any time.
In 2003, the Wife and the other co-owners sold the [W] property, and after discharging a mortgage taken out to fund a failed investment and meeting costs of sale, each of the three co-owners received about $80,000. The Wife deposited her share into her bank account.
The Wife said she used these funds to reimburse her father $10,000. She did not say for what, nor was she cross-examined about this. From 2003 to 2010 she said she used the balance of the proceeds on the house and day to day living expenses, for a “social weekend with three friends”, purchasing gifts and travelling expenses, and medical expenses. She said $30,000 was spent on a car ($25,000 to buy it and $5,000 for repairs to it), $7,000 was spent on dental expenses for herself, she bought mobile phones for herself and the parties’ children, she bought a computer and technology equipment, some was spent repairing the fence at the front of the [P] home and paying gardening expenses every year, some was spent on car maintenance, $6,000 was invested in her business, and she spent $30,000 visiting her father in America in 2004 when he was ill.
In 2006, the Husband won a share of Powerball, receiving $51,602.70. He left his then employment in August 2007 and received $37,548.50 from his employer. He then had savings of $121,227.41. He “took a break” until October 2007, using his savings to meet living expenses for the household. He worked casually from October 2007 to May 2008. By May 2008, his savings had reduced to $101,187. After five weeks, the Husband recommenced working, living off his income of $50,000 and savings. He said that despite his income increasing to $58,000 from 31 December 2008, he continued to use savings to supplement his income in meeting living expenses. He commenced his current casual employment in August 2010. He said that at
25 October 2010, he had total savings of $83,892.62. At final hearing, the Husband's total savings were $33,500 including $6,000 he said he held in a bank account on behalf of the parties’ eldest child, who is an adult. He said he had spent the money from his savings on “expenses and bills, solicitors’ fees, daughters’ expenses and that sort of thing”. He was not asked how much was spent on solicitors’ fees, and was not otherwise challenged on this evidence.
Husband's transactions on the line of credit account
The Husband said the loan he took out with his parents when the [B] property was bought, secured over his parents’ home, still exists. He said it is a line of credit account. In his financial statement, the Husband disclosed a mortgage joint loan with his father of $6,383.79, his share of which he said was 100%. In his affidavit evidence, he said he owes $3,000 on a line of credit over his parents’ home, the loan having been used to construct the matrimonial home, and $3,000 on a lone of credit over the matrimonial home. He admitted in cross-examination this is incorrect. He admitted there was no lone of credit on the matrimonial home, the line of credit over his parents’ home had not been used to construct the matrimonial home, and that he had been accessing the line of credit secured on his parents’ home when he needed money in the last three or four years. He did not tell the Wife he was drawing funds on the line of credit.
The Husband said in evidence in chief that he withdrew $450 per month from “the home loan registered over my parents’ property”. In fact, the bank records for this account show that between August 2006 and December 2010, the Husband drew a total of $51,526.60 on the line of credit in various sums, all of which were well in excess of $450, albeit they were not made monthly. He made the repayments on this account. The debit balance immediately before the first drawing he made was $3,765.82, and immediately after the last drawing it was $7,278.79, an increase of $3,512.97 in the debit balance despite the significant drawings on the account. In other words, the Husband repaid most of the drawings he made from the account.
The Husband had ample savings in his bank account between August 2006 and December 2010 and had no need to draw any of these funds on the line of credit. He suggested he drew on credit rather than his savings because he was getting a good interest rate on his savings, but then conceded the interest rates on the two accounts was about the same. He then said he just wanted to do it the way he did.
Cash transfers between the Husband and his father
The Husband said that his father deposited money into his bank account as follows-
a)8 June 2000, $61,362.66;
b)26 October 2001, $6,534.17;
c)7 June 2000, $5,000;
d)11 November 2002, $10,921.21;
e)6 May 2005, $6,000;
f)23 July 2007, $6,000;
g)30 July 2008, $6,000.
The Husband provided bank statements to show each of these sums being deposited into his account. In cross-examination he admitted that for the deposit of $5,000 he said was made on 7 June 2000, the bank statement he said evidenced this deposit in fact showed a deposit of $5,000 into his account on 7 December 2009. He at first said he could not remember where this money had come from, but later said it came from his father. I note it was received by the Husband about nine months after he said the parties had separated.
The Husband said the sum of $61,362.66 received from his father on
8 June 2000 was used for the purchase of the [S] property. He said in cross-examination he gave the money back to his father as a bank cheque a few weeks after receiving it.
The Wife knew nothing of these transactions.
In cross-examination the Husband said he had repaid all the funds he received from his father, and more besides. He said he repaid the money in cash and bank cheques in various amounts as his father needed it. He first said he repaid his father between about 2009 and 2010, but then said he also repaid him money before then.
The Husband said in evidence in chief that in the four years to
April 2011 (that is, from about April 2007 to April 2011), he had “reimbursed” his father $10,000. He did not say what he “reimbursed” his father for. In cross-examination he said this was part of the money his father had given to him as mentioned above.
Later in cross-examination, the Husband said that since 2000, he made no payments to his parents other than those disclosed in his affidavit. He said the $10,000 he paid to his parents, which in his affidavit he described as having “reimbursed” his father, was not repayment of moneys his parents gave him. The Husband said his parents have met all the outgoings on the [S] property, and that part of the $10,000 he “reimbursed” his parents was his contribution to rates on this property. The Husband denied spending any money on renovations to the [S] property, but said his parents may have. Otherwise, the reason for the “reimbursement” of the $10,000 remained unexplained by the Husband.
The Husband's father, however, said that he had done some renovations to the [S] property, including a garage. He said that about a year or a year and a half ago, the Husband gave him roughly between $8,000 and $10,000 for the renovations to the [S] property.
It was conceded by the Husband's counsel that no submission would be made that the receipt of any of the funds from the Husband's father was a contribution by or on behalf of the Husband. However, the evidence shows that the Husband paid his father more than his father paid him, and the evidence of the Husband and his father about the nature of or reason for the extra payment is inconsistent.
I find that the Husband has made a direct financial contribution to his interest in the [S] property in the form of the $10,000 “reimbursed” to his father. Otherwise, the flow of funds between the Husband and his father, and the generosity of the Husband's parents, satisfies me that the Husband's parents constitute a financial resource to him, and that it is likely he will continue to be the beneficiary of their financial generosity in the future.
Jewellery
The Husband asserted that the Wife “stole” all his and his daughter’s jewellery, not saying which daughter owned which of the items he mentioned. He said the items the Wife had comprised a wedding ring, engagement ring, friendship ring, his father’s rings, gold and silver chains, gold and silver crosses, bracelets, “all my old coins and pennies”, two jars of fifty cent coins, a jar of mixed coins, “historic rocks from the Patheneon from Greece” and an old watch from his uncle. He gave no evidence of the value of the items, and did not further particularise them. Thus, even if the Court was satisfied the Wife had taken the items, the Court could make no order in relation to them, or otherwise take them into account, unless satisfied the Wife retained them.
The Wife denied taking any gold jewellery that belonged to the Husband. She said she cashed some coins to the value of $350 to pay her Mastercard and sold some pieces of her jewellery and baby charms and jewellery pieces in a market place for $700-$800. She said she needed some cash for living expenses as she was then living away from the matrimonial home awaiting a Local Court hearing of AVO proceedings then pending against the Husband.
I am not satisfied the Wife took items other than the one she admitted taking. I accept the Wife's evidence that she received the benefit of $350 in coins and between $700 and $800 in jewellery which she paid towards a credit card debt and otherwise used for reasonable post-separation living expenses.
Non-financial contributions
As already noted, the Husband admitted his evidence suggesting he alone supported the family financially and that he made significant non-financial contributions was inaccurate. He conceded that the Wife did more of the household duties than he did. The Wife ceased work for a period around the birth of each child and thereafter returned to work on a part time basis, while the Husband was in full time employment throughout the marriage and hence was available less than the Wife to perform household duties and to care for the children.
I accept the Wife's evidence that she was primarily responsible for child care and household duties and also did gardening. However, I accept that the Husband also contributed, albeit to a significantly lesser extent, in relation to child care and household tasks, including mowing. The Husband cared for the children and performed all household duties when the Wife on two occasions travelled overseas alone for periods of four to six weeks.
Parties’ current circumstances
The Wife has been studying full time since 2010. She completed Certificate I courses in advanced customer service and computer office skills, and is currently undertaking [qualification omitted]. She is uncertain whether to undertake a further semester of study in 2012 to upgrade the qualification in her current course from a Certificate III to a Diploma.
The Wife said that she presently has constant pain when she does the same thing for too long, a symptom that began when she was working at [omitted]. She said she has ongoing problems in her right shoulder and neck. However, the Wife did not call any witness to give expert opinion evidence suggesting her ability to work was compromised on medical grounds.
She relied on an unsigned Centrelink Medical Certificate form with the name of her general practitioner on it and dated 22 March 2011 suggesting the Wife had a diagnosis of “Depressive anxiety disorder”, a “temporary” condition with an onset date of 22 March 2011, with symptoms of “lack of energy, anxious, lack of sleeping and motivations, under lot of stresses”, for which the Wife was being treated with “psychotherapy, medications”, and with a prognosis stated to be “likely to show considerable improvement within 2 years”. This unsigned certificate states the Wife is unfit for “work/study” from
22 March 2011 to 13 June 2011. Despite that, the Wife was studying during this period. There is no evidence the Wife undertook psychotherapy or was prescribed medication beyond the assertions in the unsigned medical certificate.
The Wife is in receipt of Newstart allowance of $250 per week.
The Husband, as mentioned, is in casual employment as a [omitted]. His employer has offered him full time work but the Husband declined the offer until these proceedings are concluded. He regularly works 40 hours a week, for which he receives $800 per week, but also works overtime when available, and sometimes earns over $1,000 a week.
Both parties’ property, liabilities and resources are set out later in these reasons.
As mentioned, both parties remain in occupation of the matrimonial home. The Wife said she and the Husband have been paying the electricity bill, water rates and council rates on the property, and she had been contributing towards the rates on the [R] land. She gave no evidence of the amounts she had been contributing for any of these expenses. The Husband asserted he was paying “the entire cost of all utilities and utilities for the property”. I prefer the Wife's evidence over the Husband’s for reasons previously stated.
It is agreed that neither party is able to buy out the other’s interest in the matrimonial home, and hence it will have to be sold and both parties will need to reaccommodate themselves. In fact, the parties consented to interim orders on 18 May 2011 that the matrimonial home and the [R] property both be sold, and upon completion of the sale of each, the net proceeds be divided as to 40% to each party and the remaining 20% to be held pending the determination of the competing property settlement claims.
The applicable law
Property settlement proceedings fall to be determined by reference to s.79. The court may make such order as it thinks appropriate (s.79(1)), but must not make an order unless satisfied it is just and equitable to do so (s.79(2)). In deciding whether to make an order, and if so what order, the court must have regard to those of the considerations in s.79(4), including s.75(2), the provisions of which are incorporated into s.79(4) by reference, as may be relevant in a particular case.
In Hickey & Hickey; A-G for Commonwealth (Intervener) [2003] FamCA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355, the Full Court explained the preferred approach in determining property settlement proceedings under s 79, as follows (FamCA at [39]; FLC at 78,386; Fam LR at 370):
“39. The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“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. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEJ and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.”
Where the pool of divisible assets and resources includes a superannuation interest, the Full Court in C & C [2005] FamCA 429, (2005) 33 Fam LR 414, (2005) FLC 93-220, considered the approach that should be taken. The majority said (at [65] – [67])-
“65. In summary, then, the trial Judge has a discretion as to how superannuation interests will be treated in a particular case. If superannuation is not included in the list of property but rather made the subject of a separate pool, it will be necessary where a splitting order is sought, or extremely prudent where no such splitting order is sought (in order to ensure that justice and equity is achieved) to:
(a) value the superannuation interest (according to the Regulations if an order under Part VIIIB is sought or according to the Regulations or otherwise if no order is sought);
(b) consider and make findings about the types of contributions referred to in s 79(4)(a), (b) and (c) which have been made by the parties to the superannuation interests on either a global approach or an asset by asset approach depending on the circumstances;
(c) consider the other factors in s 79(4) being the matters in s 79(4)(d), (e), (f) and (g); and
(d) ensure that pursuant to s 79(2) the orders in relation to the parties’ property, and any order under Part VIIIB in relation to superannuation interests are just and equitable.
66. In the context of a consideration of the matters referred to in sub-paragraphs (b) and (c) of the last paragraph, the following matters may well be relevant: the relationship between years of fund membership and cohabitation; actual contributions made by the fund member at the commencement of the cohabitation (if applicable), at separation and at the date of hearing; preserved and non-preserved resignation entitlements at those times; and any factors peculiar to the fund or to the spouse’s present and/or future entitlements under the fund.
67. If this approach is adopted, whereby superannuation interests are dealt with separately from property as defined in s 4(1), but are subject to the considerations in s 79(4), then not only will any contributions, both direct and indirect, by either party to such superannuation interests be more likely to be given proper recognition, but the real nature of the superannuation interests in question can also be taken into account, both in consideration of the s 75(2) matters and in the final assessment of whether the ultimate order is just and equitable.
68. When we refer to “the real nature” of the relevant superannuation interest, we are referring to the fact that notwithstanding that its value according to the Regulations may well be calculated to be a very significant amount, that superannuation interest may be no more than a present or future periodic sum, or perhaps a future lump sum, the value of which at date of receipt is unknown.”
It was agreed that the superannuation interests of the parties should be dealt with as a separate pool from their assets and liabilities.
The pools of divisible assets, liabilities and resources
It was initially the Husband's case that the net proceeds of sale the Wife received from the [W] property should be included as an asset because, it was suggested, the Wife had failed adequately to account for those funds and it should be inferred she still had them. However, in final submissions, it was conceded that the evidence did not support the adding-back of any identifiable part of those proceeds, but that nonetheless the court should take into account the suggested failure by the Wife to properly account for their expenditure.
I accept the Wife's evidence as to the use to which she put the proceeds of sale. She was not successfully challenged in cross-examination on that evidence. I note that the Wife's explanation of what became of those funds was arguably more comprehensive and convincing than the Husband's in relation to what he did with the proceeds of sale of the jointly owned property at [B].
The pool of divisible assets and liabilities was agreed as follows-
Item Description Title Amount 1 [P] property Joint $699,000 2 [R] property Joint $40,500 3 [S] property, 1/4 share Husband $77,500 4 Cash at bank - ANZ Husband $12,500 5 Cash at hand Husband $15,000 6 Trust investment for [X] Husband $6,000 7 Husband's motor vehicle Husband $19,000 8 [omitted] membership Husband $20,000 9 Wife's cash at bank - CBA Wife $219 10 Wife's motor vehicle Wife $19,000 11 Home contents Joint $5,000 12 Husband's CBA loan Husband -$4,117 13 Wife's CBA MasterCard loan Wife -$9,990 Total $899,612
While the contents of the matrimonial home were included in the pool of divisible assets, neither party sought an order in relation to their ultimate disposition. Both simply sought that apart from property the subject of specific orders, each party retain property in his or her possession or control. But both parties continue to occupy the matrimonial home, begging the question in whose possession the contents may be. In those circumstances, and in light of the uncertainty as to what will become of the contents, I am satisfied their value should be excluded from the pool of divisible assets when calculating the parties’ entitlements, thus leaving a net divisible pool of $894,612.
The parties ultimately agreed to the Court making an order declaring the investment by the Husband as trustee for the parties’ eldest daughter in the sum of $6,000 to be the sole property of that daughter. In those circumstances, I am satisfied this sum also should be excluded from the pool of assets divisible between the parties, further reducing the value of that pool to $888,612.
The pool of superannuation interests was agreed as follows-
Item Description Title Amount 1 [omitted] Husband $170,000 2 [omitted] Wife $60,882 3 [omitted] Wife $24,609 Total $255,491
I am satisfied that the Husband also has a financial resource, the value or extent of which cannot be determined, in his parents. They have been consistently generous to the parties and to the Husband alone during the parties’ marriage, and there has been a significant degree of intermingling of moneys between the Husband and his parents, which is far from transparent. While I am not satisfied on the evidence that the Husband's parents hold undisclosed money or property on behalf of the Husband, I am satisfied that they will continue to be financially generous to him.
The assessment of contributions
It was submitted on behalf of the Wife that her contribution based entitlement to both the net assets excluding superannuation and to the superannuation should be assessed at 50%. It was submitted on behalf of the Husband that his contribution based entitlement to the net assets excluding superannuation should be assessed at 70%, and to the superannuation at 66.6%, while conceding it was difficult to argue against a finding of equality of contribution to the superannuation.
I will deal with the assets and liabilities first, and then the superannuation interests.
The Husband has made the greater contribution from income, he having worked full time throughout the marriage while the Wife took short periods off work around the birth of both children and returned to work on a part time basis shortly after each birth. However, the Wife has made a clearly greater contribution as homemaker and parent.
The Wife had $5,000 savings and a motor vehicle at marriage, and the Husband had a motor vehicle at marriage. The Husband contributed nearly $10,000 towards the wedding expenses, and his parents contributed another $10,500 on his behalf. The Wife contributed about $4,500 to the wedding expenses and contributed a $2,800 redundancy payment received a month after the wedding towards the household expenses.
The parties received the benefit of rent free accommodation in a home owned by the Husband's uncle, for which they only had to pay the rates on the property, a rental saving according to the Wife of $20,000 per year for thirteen years. This is a contribution on behalf of the Husband.
The parties eventually received the whole of the [B] property, in large measure as a result of the generosity of the Husband's parents. While it was originally purchased in the joint names of the Husband and his parents, the evidence is that the Husband's parents paid the deposit, and the Husband's parents and the Husband jointly borrowed the remaining funds to buy the property. Thereafter, until 1995 when the Husband's parents transferred their interest in the property to the Wife, the Husband’s parents paid the shortfall between the loan repayments and the rental income. The Husband's contribution to this property during that period was his half of the rental income. The Wife then received the Husband's parents’ half share in this property as a gift, a contribution on the Husband's behalf, the equity in the property then being worth $100,000. But the contribution by the Husband's parents was more than the half interest they then gave the Wife. It included half their contributions since its purchase of the shortfall between rental income and mortgage repayments, and even when they ceased to have an interest in it, their home continued to secure the loan in relation to it.
The parties then jointly acquired the matrimonial home, using an unspecified amount of savings accumulated during, and to a significant extent as a result of, their rent free occupation of the Husband's uncle’s property, and the sale proceeds of the [B] property. Thus, the contributions by the Husband's family members of the rent free accommodation and of a significant interest in the [B] property, played a significant part in the acquisition of the matrimonial home.
Similarly, the inference is that the parties’ ability to purchase the [R] land in 1988 or 1989 for $19,000 without a mortgage was significantly assisted by the provision of the rent free accommodation by the Husband's uncle.
The Husband has a one quarter interest in the [S] property to the purchase of which he made no contribution. I am satisfied he has made some financial contribution, probably in the order of $10,000, to the conservation and improvement of that property, in payment to his father of moneys for renovations to the property. I am not satisfied the Husband has made any other contribution to that property, other than foregoing any rent that has been or could have been derived from it, it being described as in investment but there being no evidence whether it is or has been tenanted.
Both parties have received compensation moneys for unspecified injuries, the Wife $45,000 in 2002, the Husband $24,267.67 in 1997. I am satisfied both contributed these moneys to the household.
I am satisfied the Wife contributed about $80,000 she received from the sale of the [W] in 2003, and that the Husband made little if any direct or indirect contribution to this property.
The Husband has contributed a lottery winning of $51,602.70 he received in 2006. There is no evidence about the lottery win other than the fact he received it.
The Husband contributed a termination payment of $37,548.50 from his employer in 2007.
The evidence does not enable me to determine whether the parties separated in March 2009 as the Husband asserts or on 29 April 2010 as the Wife asserts. Since separation, whenever it occurred, both parties have contributed to the outgoings on their properties and the household in which both continue to reside, although I am satisfied that the Husband, who has been in receipt of the greater income, has made the greater contribution.
The parties cohabited for between about 21 ½ years and 22 ½ years. The non-financial contributions over that period by both parties have been significant, although the Wife has made a considerably greater non-financial contribution than the Husband.
The difficulty in this case is to fairly balance all of the financial and non-financial contributions by or on behalf of both parties, where there have been significant capital contributions by both parties or their families on their behalf. This balancing process cannot be a mathematical one, where significant contributions that must be placed in the balance on both sides are non-financial contributions on which no monetary value can be placed. It is necessary to give significant recognition to the contributions of both parties as parents and home makers over such a long marriage, but at the same time, to give appropriate recognition to significant capital injections on both sides.
It was submitted on behalf of the Wife that with such a long marriage, the court should apply “the erosion principle” to the capital contribution by and on behalf of the Husband represented by the [B] property. It is sometimes erroneously suggested that a capital contribution relatively early in a long marriage erodes over time. This is not so. The Full Court of the Family Court of Australia explained the correct approach in Norman & Norman [2010] FamCAFC 66 as follows (at [29])-
“29. As was said to counsel during the hearing of the appeal, we consider the reference to “offsetting” contributions, as with references to “erosion”, to be unhelpful. The better approach is that to which this court referred in Pierce & Pierce (1999) FLC 92-844 at 85,881:
‘… 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. …’
Reference should also be made in that respect to the discussion in the recent decision of this Court in Cabbell and Cabbell, above, at 43.”
What the Full Court said in Cabbell & Cabbell [2009] FamCAFC 205 at [43], and in the following paragraph which is also relevant, is-
“43. The principles enunciated in decisions prior to 1999 are conveniently reviewed in Pierce & Pierce (1999) FLC 92-844 at paragraphs 25 - 27 of that judgment. In those paragraphs the Full Court (Ellis, Baker and O’Ryan JJ) referred to the cases which discussed the concept of an initial contribution being “eroded” or offset to a greater or lesser extent by later contributions during the marriage, and the qualification to or expansion of this concept by Fogarty J in Money & Money (1994) FLC 92-485 at 81,054, namely that later contributions over a long marriage did not need to be greater, but rather those contributions (sometimes referred to as the myriad of other contributions) “offset” the significance which might be placed on greater initial contributions. Their Honours then, at paragraph 28, explained that in assessing contribution (including initial contributions) rather than considering if an initial contribution had been “eroded”, what was relevant was the “weight to be attached, in all the circumstances, to the initial contribution”. Their Honours then explained the initial contribution should be weighed with all other contributions, and in paragraph 30 stressed the need for a trial Judge “not only to identify the relevant contributions, but also to assess them”. That latter statement of principle is consistent with the discussion in Mallet v Mallet (1984) 156 CLR 605 where Mason J said in discussing s 79:
‘The section contemplates that an order will not be made unless the court is satisfied that it is just and equitable to make the order (s. 79(2)), after taking into account the factors mentioned in (a) to (e) of s. 79(4). The requirement that the court “shall take into account” these factors imposes a duty on the court to evaluate them. Thus, the court must in a given case evaluate the respective contributions of Husband and Wife under pars. (a) and (b) of sub-s. (4), difficult though that may be in some cases.’
44. In Williams & Williams [2007] FamCA 313 the Full Court (Kay, Coleman and Stevenson JJ), after discussing conflicting cases determined in the New South Wales Court of Appeal under the Property (Relationships) Act 1984 (NSW) which involved discussion of how initial contributions should be assessed in a property adjustment case under that legislation, said at paragraph 26:
‘We think that there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution towards the parties. Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing or the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in so doing it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.’”
The benefit to the parties of the generosity of the Husband's uncle and his parents was a most significant factor in the parties’ ability to purchase the matrimonial home unencumbered. Both the parties savings, contributed to the purchase of the vacant land at [P] and at [R], and the proceeds of sale of the [B] property, part of which was contributed to the purchase of the [P] land and much of the balance of which was spent on the construction of the home, were to a significant extent the result of that generosity. Similarly, the Husband's interest in the [S] property was the result to a very significant extent of the generosity of the Husband's parents. And of course, the Husband's parents contributed directly to the matrimonial home by paying for the pool and pool fence.
These very significant direct and indirect contributions to significant items in the asset pool must weigh significantly in the Husband's favour when assessing his contribution based entitlement.
On the other hand, it was the parties’ joint contributions from 1995 that lead to the preservation and the improvement in value of the [B] property until its sale four years later, and it was the parties’ joint contributions that lead to the preservation and improvement in value of the matrimonial home from 1999 to the present. And while the accumulation of the parties’ savings contributed to the purchase of the [P] and [R] land may have been significantly assisted by the provision of rent free accommodation by the Husband's uncle, the building up of those savings also reflected the financial and non-financial contributions of both parties over a significant period. And finally, the Wife herself made a significant capital contribution in the form of the approximately $80,000 she received on the sale of the [W] property in 2003, some of which was used for repairs to the matrimonial home, and some for the purchase of a motor vehicle.
Taking into account not only the contributions by the Husband's family but also the significance to the current pool of assets of the property acquired as a result of that generosity, and also the very significant financial and non-financial contributions both parties made over a long marriage, including the Wife’s own significant capital injections, particularly the $80,000 from the [W] property relatively later in the parties’ marriage, I am satisfied that the parties’ contributions to the assets apart from superannuation should be assessed as 55% to the Husband and 45% to the Wife.
In relation to the superannuation interests, apart from one amount of $3,000 the Husband drew on the line of credit that he said he paid to his superannuation, there is no evidence about the accumulation of the parties’ respective superannuation interests. There is no evidence any of the capital contributions by the parties, or the rent free accommodation from the Husband's uncle, in any way affected the accumulation of the parties’ present superannuation interests. Having regard to the parties’ respective other contributions, both financial and non-financial, I am satisfied their contributions to the total superannuation pool are equal.
The assessment of non-contribution considerations
It was submitted on behalf of the Wife that to her 50% contribution based entitlement to both the assets excluding superannuation and to the superannuation there should be added another 10% to 15% because of the relative weakness of the Wife's income earning prospects compared to the Husband's. Thus, it was submitted the Wife's interest in both pools should be assess at between 60% and 65%.
It was submitted on behalf of the Husband that the Wife's contribution based entitlement to the non-superannuation pool of 30% should be increased by 2.5% to allow for the short period until the Wife finished her current TAFE course, and that there should be no adjustment to the contribution based entitlements to the superannuation interests.
The Husband is effectively in full time employment, although that employment is casual. He has the option, if he chooses to take it up, of permanent employment doing the same work. He earns at least $800 per week, and sometimes over $1,000 a week with overtime. He is aged 49, and is about 18 months younger than the Wife. There is no evidence of any medical or other impediment to him continuing in employment.
The Wife is aged 51 and is studying full time, due to complete her current course at the end of the year. She is in receipt of Newstart allowance. She is required as a condition of receiving that allowance to actively seek work, but has not done so for some months. I do not understand how the Wife can undertake and complete full time studies, which is a part of the plan under which she is being assisted to return to work, and at the same time actively seek and accept any suitable employment.
The continuity of the Wife's employment during the parties’ marriage was interrupted by her child caring responsibilities, unlike the Husband who has continued in full time work throughout. I am satisfied that it is reasonable for the Wife to seek retraining, as she is currently doing, but that from the end of this year, she will have no impediment to seeking employment. I am not satisfied on the evidence before me that the Wife's ability to work is presently impaired on any medical grounds.
While I am satisfied the Wife will be able to seek employment soon, and on the evidence before me I cannot find she is unlikely to find employment, I am satisfied her earning capacity is likely to be significantly less than the Husband's.
Neither party has the duty to support any other person, although the Husband continues to provide some financial assistance to the parties’ adult daughters. I am satisfied that the Wife is financially unable to do so.
I am satisfied that the Wife is in a poorer financial position than the Husband both in relation to her future income earning ability, and her contribution based entitlement to the non-superannuation pool. Her poorer income earning capacity will not only give the Wife a lesser capacity to afford an equivalent standard of living to the Husband, but also a lesser capacity to build up superannuation over the remainder of her working life. The Husband also has the ongoing resource of the generous financial support of his parents.
I am therefore satisfied that a 5% adjustment in the Wife's favour is warranted to both the non-superannuation pool and the superannuation pool.
That is, the Wife's interest in the non-superannuation pool should be 50% to the Husband's 50%, and in the superannuation pool 55% to the Husband's 45%.
A just and equitable order
It was common ground that both the matrimonial home and the [R] properties be sold, the proceeds of sale of each be divided between the parties, and that any cash adjustment between the parties necessary to effect a just and equitable distribution of the parties’ property be made in the Wife's favour out of the Husband's share of the proceeds of sale of the [P] property.
It was submitted on behalf of the Wife that she should retain her cash, motor vehicle and superannuation, and that in addition to her share of the proceeds of sale of the [P] property she receive an additional sum of $120,000 from those proceeds, being the amount on her case said to be necessary to effect an appropriate division of the remaining property. The Wife did not seek any order for the division of the contents of the matrimonial home. Nor did she seek a superannuation splitting order. No submission was made on the Wife's behalf as to how an appropriate adjustment of the non-superannuation assets should be determined to reflect the Wife's need for an adjustment on account of the imbalance in the parties’ superannuation interests.
It was submitted on behalf of the Husband that the Wife should receive 40% of the proceeds of sale of the [P] and [R] properties, plus $50,000 from the proceeds of sale of the [P] property to effect the appropriate division of the overall property of the parties. The actual division under the orders proposed by the Husband was said to represent 45% of the non-superannuation assets to the Wife, being more than the Husband submitted the Wife was entitled to. The Husband sought no order in relation to the contents of the matrimonial home.
It was submitted on behalf of the Husband that the superannuation interests should be left as they were, favouring the Husband approximately two thirds to one third. It was submitted that if the Court found the parties’ entitlements to the superannuation pool were equal, that there be an adjustment to the Wife of $20,000 from the presently realisable property. It was submitted this would involve about a 50% discount on the actual disparity in the superannuation interests, which was said to be appropriate as the Wife would receive property she could presently access in lieu of a greater share of the superannuation that neither party could access for many years.
Based on the percentage entitlements to the non-superannuation pool of divisible assets as I have determined them to be ($888,612), each party should receive half, that is, net property worth $444,306. If the superannuation interests were adjusted to reflect the parties’ interests as I have found them to be, the Wife would need to receive superannuation presently valued at $140,520, whereas her superannuation interests are worth $85,491, $55,029 less than her entitlement. But as neither party sought a splitting order, the retention by each party of their superannuation interests means the superannuation disparity must be reflected in an adjustment in the Wife's favour from presently realisable property. However, that adjustment must be calculated on the basis of a discounting of the notional sum of $55,029 by which the Wife's retained superannuation falls short of her entitlement, because instead of receiving that adjustment in a superannuation interest she will not be able to access for many years, she will receive it in presently realisable assets. Conversely, doing so will leave the Husband with a greater share of the superannuation but a lesser share of the presently realisable property, putting him at a relative disadvantage to the Wife.
I am satisfied that the sale of the [P] and [R] properties should proceed, as both parties ultimately proposed and as agreed in May, and both parties should receive half the net proceeds of sale.
If each party receives half of the proceeds of sale of the [P] and [R] properties, the Husband will otherwise retain his interest in the [S] property, his cash and savings, his motor vehicle, his [omitted] membership, and remain liable for a loan of $4,117, leaving him with property of a net value of $139,883. The Wife will otherwise retain her savings, her motor vehicle, and will remain liable for her Mastercard debt of $9,990, leaving her with net assets worth $9,229. To effect an equal division of the non-superannuation pool, the Wife needs to receive a sum of $65,327 in addition to her share of the proceeds of sale of the realty.
Taking into account the need to make an adjustment in the Wife's favour in relation to the parties’ superannuation, I am satisfied the adjustment in the Wife's favour should be increased to $100,000. That involves about a 37% discount on the amount by which the superannuation interests would need to be adjusted to reflect a 55/45 share favouring the Wife.
No submission was made on behalf of the Wife as to how this adjustment should be calculated, while on behalf of the Husband it was submitted that the discount should be 50%. No basis for that submission was put to me.
Where the Court is given no rational or reasoned argument as to how the adjustment figure should be calculated, any discount must be somewhat arbitrary. I have come to this figure taking into account the fact that it will be between 24 and 25 years before these parties turn 65 and in the normal course receive their superannuation, whereas the adjustment to the Wife in effect makes available to her now part of her superannuation.
Both parties submitted that any cash adjustment to the Wife should come from the proceeds of sale of the [P] property.
The result of an adjustment to the Wife of $100,000 from the Husband's share of the proceeds of sale of the [P] property, based on the agreed values for the [P] and [R] properties and without allowing for any costs of sale, would be that the Wife would retain her cash, motor vehicle and Mastercard loan, and would receive a total of $469,750 from the proceeds of sale of both properties ($449,500 from the [P] property and $20,250 from the [R] property), giving her net assets totalling $478,979. She would retain her superannuation worth $85,491.
The Husband would retain his cash and savings, his quarter interest in the [S] property, his motor vehicle, his [omitted] membership and his loan, and would receive a total of $269,750 from the proceeds of sale of both properties ($249,500 from the [P] property and $20,250 from the [R] property), giving him net assets totalling $409,633. He would retain superannuation worth $170,000, and have the financial resource of his parents.
Overall, this represents a 53.9% share of the non-superannuation pool of divisible assets and about one third of the superannuation pool to the Wife, and a 46.1% share of the non-superannuation pool of divisible assets and about two thirds of the superannuation pool to the Husband.
I am satisfied such a result would appropriately reflect the parties’ respective contributions, the Wife's weaker prospective financial position, and the need to address the extent of the Wife's interest in the superannuation where no splitting order is sought, and that carrying the result into effect in this way would be just and equitable.
I certify that the preceding one hundred and thirty-four (134) paragraphs are a true copy of the reasons for judgment of Halligan FM
Date: 11 November 2011
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