Zabini and Zabini
[2013] FCCA 22
•12 April 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ZABINI & ZABINI | [2013] FCCA 22 |
| Catchwords: FAMILY LAW – Property – assets – add-backs – premature distribution of a proportion of the matrimonial assets – liabilities – capital gains tax – whether anticipated capital gains tax on sale of property transferred to one party should be regarded as a liability – contributions – where initial contributions favour the husband – consideration of factors under Family Law Act 1975 s.75(2) – disparity between income and earning capacity of the husband and the wife – “future needs” factors considered – just and equitable. |
| Legislation: Family Law Act 1975, ss.75, 78, 79, 81, 90MT, 106A |
| Cases cited: Best & Best (1993) 16 Fam LR 937; FLC 92-418 NHC & RCH [2004] FamCA 633; FLC 93-204; 32 Fam LR 518 Clauson & Clauson (1995) 18 Fam LR 693; FLC 92-595 DJM & JLM [1998] FamCA 97; (1998) 23 Fam LR 396; FLC 92-816 Farnell & Farnell (1996) 20 Fam LR 513; FLC 92-681 Gould & Gould [2007] FamCA 609; (2007) FLC 93-333 Harrington & Harrington [2007] FamCA 451; (2007) FLC 93-317 HD M & MM and SJM [2006] FamCA 47 Hickey & Hickey [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143 Kowaliw and Kowaliw (1995) FLC 91-092 Lee Steere & Lee Steere (1985) 10 Fam LR 431; FLC 91-626 AJO & GRO [2005] FamCA 195; (2005) 33 Fam LR 134; FLC 93-218 Pierce & Pierce [1998] FamCA 74;(1999) 24 Fam LR 377; FLC 92-844 Rosati & Rosati [1998] FamCA 38; (1998) 23 Fam LR 288; FLC 92-804 Stanford v Stanford [2012] HCA 52 Townsend and Townsend (1994) 18 Fam LR 505; (1995) FLC 92-567 Zabini & Zabini [2013] FMCAfam 298 |
| Applicant: | MR ZABINI |
| Respondent: | MS ZABINI |
| File Number: | SYC 4364 of 2009 |
| Judgment of: | Judge Scarlett |
| Hearing dates: | 9-10 November 2010, 22-23 February, 14-17 June, 13 July 2011, 18-19 April, 22 – 24 May 2012 |
| Date of Last Submission: | 2 August 2012 |
| Delivered at: | Sydney |
| Delivered on: | 12 April 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Sansom |
| Solicitors for the Applicant: | Watts McCray Lawyers |
| Counsel for the Respondent: | Ms Haughton |
| Solicitors for the Respondent: | Rachel Stubbs & Associates |
ORDERS
As between the Applicant and the Respondent the Applicant is hereby declared to be solely entitled to the property situated at and known as Property C, [S] in the State of New South Wales being the whole of the land in Folio Identifier [omitted] and the Applicant must indemnify and keep indemnified the Respondent in relation to all mortgage payments, statutory rates and charges, other expenses and liabilities in relation to the property whenever and however arising.
Within three (3) months of the date of these Orders the Applicant and the Respondent are to do all things and sign all deeds, documents and instruments necessary to effect the following simultaneously:
(a)The Respondent must do all things necessary to vacate and provide vacant possession of the property situated at and known as Property B, [O] in the State of New South Wales being Lot [omitted] and the whole of the land in Folio Identifier [omitted];
(b)Upon payment by the Applicant of the sum of $728,534.00 transfer her interest in the property situated at and known as Property B, [O] in the State of New South Wales being Lot [omitted] and the whole of the land in Folio Identifier [omitted] to the sole name of the Applicant such that the Respondent shall sign all deeds, documents and instruments presented to her by the Applicant and the Applicant shall do all other things necessary for such transfer at his cost;
(c)Discharge of all mortgages and encumbrances presently registered over the said property at Property B, [O] aforesaid at the cost of the Applicant such that the Respondent shall sign all deeds, documents and instruments presented to her by the Applicant and the Applicant shall do all other things necessary to cause such discharge;
(d)Sign any withdrawal of caveat affecting the said property at Property C, [S] aforesaid.
The Applicant must indemnify and keep indemnified the Respondent in respect of all liabilities in relation to the said property at Property B, [O] aforesaid.
The Applicant is to transfer to the Respondent all of his right, title and interest in the parties’ Holden Commodore motor vehicle within one (1) month of the date of these Orders.
The Applicant and the Respondent are each to retain any superannuation interests standing in their own names.
Each party is to retain any bank account or shares standing in his or her own name.
The Applicant is to retain and is solely entitled to the following:
(a)A Bluefin Aluminium 2002 model boat in his possession; and
(b)A Caribbean Fibreglass 1985 model boat in his possession,
Each party is to retain any items of jewellery currently in their respective possession.
The Respondent is to retain all of the household contents of the property at Property B, [O] in the State of New South Wales.
The Applicant is to be solely responsible and is to indemnify the Respondent and keep her indemnified in respect of a sum of $20,000.00 claimed by his father Mr Z.
Each party is to be solely responsible for any credit card debt standing in his or her name and shall indemnify the other party against all or any claims arising from such debt.
As provided by section 81 of the Family Law Act 1975 these Orders are to finally determine the financial relations between the parties and avoid further proceedings between them.
In the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these Orders then the Registrar of this Court shall be appointed in accordance with section 106A of the Family Law Act 1975 to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
Written submissions in support of any application for costs are to be filed and served within 21 days and written submissions in opposition to any such application are to be filed and served within a further period of 14 days.
IT IS NOTED that publication of this judgment under the pseudonym Zabini & Zabini is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 4364 of 2009
| MR ZABINI |
Applicant
And
| MS ZABINI |
Respondent
REASONS FOR JUDGMENT
Application
This is an Application by the Husband for orders for settlement of property. He seeks:
a)A declaration that he is solely entitled to a property at Property C, [S], New South Wales;
b)An order that the wife should vacate the former matrimonial home in [O], New South Wales, and transfer her interest in the property to him in exchange for a payment of $341,609.71;
c)A superannuation splitting order; and
d)An order that the parties otherwise retain all personal property currently standing in their possession or control.
The Wife does not seek to retain the former matrimonial home, nor does she seek a superannuation splitting order[1]. She seeks orders that:
a)She is to receive a payment of $1,150,000.00;
b)She is to transfer her interest in the former matrimonial home to the Husband; and
c)She retains her personal property including a Holden Commodore motor vehicle and a loan to one Mr B
[1] Wife’s Property Submissions page 24 paragraph [95]
Background
The parties were married [in] 1999, although they had commenced living together from about [date omitted] of that year. They separated on 16th July 2009.
There are two children of the marriage. [X] was born [in] 2000 and [Y] was born [in] 2003.
The children were living with the Wife from the date of separation, but orders were made in parenting proceedings that the children would live with the Father from 5th April 2013 (Zabini & Zabini[2] )
[2] [2013] FMCAfam 298
At the commencing of their relationship, according to the Husband, the parties owned various assets.
The Husband’s assets were:
a)A property at Property E, [S], NSW, purchased on 14th June 1991;
b)A property at Property C, [S], purchased in May 1996, the mortgage having been discharged in March 1999;
c)An interest in the [C] Super Fund of about $75,170.92;
d)A share portfolio worth about $74,170.92;
e)Savings amounting to about $10,000.00
f)A Ford XD Falcon motor vehicle;
g)Furniture, furnishings and effects; and
h)A redundancy payment which he received in April 1999.
The Wife had the following assets:
a)A Mitsubishi Magna motor vehicle;
b)[omitted] shares worth about $10,000.00;
c)A superannuation entitlement of about $10,782.75;
d)Furniture an defects; and
e)The proceeds of sale of her property at [L].
In about April 1999 the parties purchased a property at Property G, [O], for $360,000.00 as joint tenants. The Husband paid the deposit of $20,000.00 and the parties obtained a loan of about $340,000.00 from the Commonwealth Bank.
Initially, both parties worked full-time for [omitted].
In July 1999 the Husband sold the property at Property E, [S]. He applied the net proceeds towards the mortgage on the property at Property G.
On or about 22nd September 1999 the Husband commenced working for [V], his present employer.
The parties sold the property at Property G for $575,000.00 on or about 24th June 2002. They purchased the property at Property B, [O], at that same time for $790,000.00. They applied the proceeds of the Property G property towards the purchase and made up the balance with a loan of about $200,000.00. That loan was paid out prior to the parties’ separation.
The Wife left her employment at [omitted] after the children were born and, in particular, when [X], the elder boy, developed health issues. She obtained part-time work with [omitted] in about 2007 or 2008 and commenced working three or four 24 hour shifts per fortnight.
The parties separated on 16th July 2009.
Orders Sought
The husband seeks the following orders:
1. That, as between the parties, the Husband is hereby declared to be solely entitled to the property situated at and known as Property C, [S] in the State of New South Wales and the Husband hereby indemnifies and shall keep indemnified the Wife in relation to all mortgage payments, statutory rates and charges, other expenses and liabilities in relation to the property whenever and however arising.
2. That within 90 days of the date of these orders the parties do all things and sign all things necessary to effect the following simultaneously:
2.1The Mother[3] shall do all things necessary to vacate and provide vacant possession of the property situated at and known as Property B, [O] (The [O] property”);
[3] sic
2.2Upon payment by him of the sum of $341, 609.71 (the sum”) transfer the property situated at and known as Property B, [O] to the sole name of the Husband, such that the Wife shall sign all documents presented to her by the Husband and the Husband shall do all things necessary for such transfer, at his cost;
Discharge of all mortgages and encumbrances presently registered over the property at Property B, [O] at the cost of the Husband and the Husband shall do all other things necessary to cause such discharge.
AND the Husband shall indemnify and keep indemnified the Wife in respect of all liabilities in relation to the [O] property whenever and however arising.
3. That in accordance with S.90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the superannuation interest of the Husband in [M] Super Scheme, the Wife will be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using the base amount of $90,545, and there will be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for these orders.
3.1That order 3 binds the Trustee of [M] Super Scheme and order 3 takes effect from the operative time being 21st business day following the date of service of these orders.
3.2That the Trustee of [omitted] must comply with the obligations imposed upon Trustees of eligible superannuation plans under the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001.
4.That as between the Husband and Wife, and subject to the above orders the Husband and Wife shall reach respectively retain all interest in and entitlement to:
4.1All personal property now in his/her respective possession or control.
4.2All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively.
4.3All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
5.Pursuant to S.81 of the Family Law Act the parties intend these orders to finally determine all financial relations and issues between them and avoid further proceedings between them.
6.That each party shall do all things necessary including providing all consents to give effect to these orders in the time periods prescribed in these orders.
7.That in the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these orders, then the Registrar of the Court shall be appointed pursuant to S.106A of the Family Law Act to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.[4]
[4] These proposed orders are set out in the Submissions of the Applicant Husband at page 35-36
The Wife’s Property Submissions prepared by her counsel do not contain a specific Minute of the Orders sought, but there is a helpful table at page 21 of the submissions entitled “Outcome proposed by the Wife”. In this table, the Wife shows that the property at Property B, [O], would be retained by the husband and she would receive a payment of $1,150, 000.00. In addition, she would retain items of personal property, cash, bank accounts, shares, a Holden Commodore motor car, jewellery and a $15,000.00 loan to one Mr B, amounting to $27,408.00. This would lead to a total of $1,183,208, less credit card debts of $1,544.00 and including a superannuation of $1,209,809.00.
Evidence
The final hearing took place over a number of days, commencing on 9th November 2010 and concluding on 24th May 2012. The bulk of the hearing time was taken up with parenting matters. The Husband and the Wife were extensively cross-examined.
The Proper Approach to Determination of a Property Application
The way a court approaches property matters has been set out by the Full Court of the Family Court in its decision of Hickey & Hickey[5]where Nicholson CJ, Ellis and O’Ryan JJ held at [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 (citations omitted).
[5] [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143
The Court should also have regard to the recent decision of the High Court of Australia in Stanford v Stanford[6], which examines in some detail the operation of s.79(2). The majority (French CJ, Hayne, Kiefel and Bell JJ) held at [35]-[40]:
35It will be recalled that s 79(2) provides that “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two subsections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
36The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. And while the power given by s 79 is not “to be exercised in accordance with fixed rules”, nevertheless, three fundamental propositions must not be obscured.
37First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers to “altering the interests of the parties to the marriage in the property” (emphasis added). The question posed by s 79(2) is this whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
38Second, although s 70 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion…
39Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is “just and equitable” to make the order is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those that then exist. All the more is that so when it is recognised that s 79 of the Act must be applied keeping in mind that “[c]ommunity of ownership arising from marriage has no place in the common law”. Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be “decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses”. The question presented by s 79 is whether those rights and interests should be altered.
40Third, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable” only because of and by reference to various matters set out in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
[6] [2012] HCA 52
Clearly, the decision in Stanford means that the Court must consider the requirements of s.79(2) before embarking on the four-step process set out in Hickey, or at least before taking the second step, identifying and assessing the contributions of the parties. In other words, satisfaction that it is “just and equitable” to make an order is a condition precedent to considering the matters referred to in s.79(4). The Court must be satisfied that it is “just and equitable” to make an order at all.
It would follow that the Court must consider whether it is just and equitable to make a particular order when the Court is considering “what order (if any)” should be made under s.79. Thus, the requirements of s.79(2) must also be borne in mind, in my view, after the Court has undertaken the third step of the process, as the Full Court of the Family Court held in Hickey.
Just and Equitable
Applying the decision of the High Court in Stanford[7], the first matter to be considered is whether it is just and equitable to make an order. In my view, it is just and equitable to do so, as the parties have separated permanently and need to provide for their future housing and that of their children.
[7] supra
The Husband wishes to retain the former matrimonial home. Counsel for the Wife, Ms Haughton, submits that paragraphs [95]-[96]:
The wife had originally sought to retain the matrimonial home by way of final property settlement but due to the massive legal costs incurred by her (in fact both parties), the wife determined she could not retain it and she agrees that the husband may retain it if he wishes.
The wife will not be able to purchase a property with the sum proposed by the husband.[8]
[8] Wife’s Property Submissions page 24 [95]-[96]
In my view, it is just and equitable to make orders so as to end the financial relationship between the parties.
The parties’ Property and Liabilities
There was no joint balance sheet. However, the parties agreed on the value of some of the assets forming the property pool, but not all of them.
Agreed Non-Superannuation Assets
The parties agree on the value of the following assets:
a)Property B, [O] (in joint names) $1,150.000.00
b)Property C, [S] (husband) $525,000.00
c)Husband’s CBA Bank account $78.00
d)Husband’s [N] Holdings shares $2,500.00
e)Husband’s Commodore motor vehicle $5,000.00
f)Wife’s [T] Shares $6,480.00
Total $1,689,078.00
Agreed Superannuation
The parties agree on the value of the Husband’s superannuation, but do not agree on the value of the Wife’s superannuation. The Husband has an interest in two superannuation schemes:
a)[V] Super Plan $138,523.00
b)[C] Superannuation $95,997.00
Total $234,520.00
Liabilities
There is no agreement between the parties about liabilities.
Assets in Dispute
The Husband submits that the following assets should be taken into account:
a)Household contents of marital home $7,500.00[9]
b)Monies withdrawn by wife without husband’s knowledge or consent $212,686.34
c)Monies withdrawn by wife whilst husband overseas $3,139.00
d)Proceeds of sale of shares given by husband to wife $55,713.00
e)Funds lent by husband to sister-in-law $16,500.00
f)Wife’s jewellery $11,000.00
[9] Submitted to be “common figure to both parties”
The Wife submits that the following assets and their values should be taken into account:
a)Household contents $0[10]
[10] Wife submits “no valuation”
b)Jewellery in Wife’s possession $0[11]
c)Jewellery in Husband’s possession $0[12]
d)Loan to Mr B $15,000.00[13]
e)Husband’s solicitors’ trust account $59,821.00
f)Cash held by Husband $E108,000.00
g)2 boats (Husband) $10,500.00
Total $193,321.00
[11] Wife submits “no valuation”
[12] Wife submits “no valuation”
[13] “but unlikely to be repaid”
The Husband gives the value of the Wife’s [H] superannuation as $24,181.00.
The Wife gives the value of the [H] superannuation as $28,145.00.
The discrepancy between the parties amounts to a significant amount, namely $197,285.00.
Household contents
The Husband submits that the jointly owned household contents have an agreed or common value of $7,500.00, whilst the Wife places a nil value on them, on the basis that there is no valuation of them.
The parties each filed Financial Statements, the Husband on 22nd February 2010 and the Wife on 18th March 2010.
At paragraph 42 of the Husband’s Financial Statement, he estimates the value of Household contents at “E7, 500”.Similarly, at paragraph 42 of the Wife’s Financial Statement, she gives the value of Household contents at “7,500”. Although there is no valuation, the parties filed Financial Statements in which they agreed that $7,500.00 was the value of the household contents. I see no reason to second-guess the parties on this issue.
I find the value of the parties’ household contents to be $7,500.00.
Monies said to have been withdrawn by the Wife without husband’s knowledge or consent
The Husband submits that the sum of $212,686.34 should be added back to the asset pool, relying on the decision of the Full Court of the Family Court in HDM & MM and SJM[14] accepting what was stated in the Full Court decision of AJO & GRO[15] at [30]-[31] that:
30.To date, three clear categories of cases have emerged where the court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a)Where the parties have expended money on legal fees[16]…
(b)Where there has been a premature distribution of matrimonial assets[17]...
(c)In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644…[18]
[14] [2006] FamCA 47
[15] [2005] FamCA 195; (2005) 33 Fam LR 134; FLC 93-218
[16] Following DJM and JLM [1998] FamCA 97; (1998) 23 Fam LR 396; FLC 92-816
[17] Following Townsend and Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569
[18] 93-218 per Holden, Warnick and Le Poer Trench JJ at [30]
As to the issue of legal costs being added back, Counsel for the husband also referred to NHC &RCH[19], Farnell and Farnell[20] and Harrington & Harrington[21].
[19] [2004] FamCA 633; (2004) FLC 93-204; 32 Fam LR 518
[20] (1996) 20 Fam LR 513; FLC 92-681
[21] [2007] FamCA 451; (2007) FLC 93-317
It was submitted that the wife had withdrawn the sum of $212,686.34 from an account on 7 July 2009 without telling the husband. She had had a conversation on Facebook with her friend Mr B about the money in which she said “But I have the $200k”.[22] She also conceded as much during her cross-examination on 13 July 2011.
[22] Affidavit of Mr Zabini 18.10.2010 annexure PTZ 5
Mr Sansom submitted that there can be little doubt in the circumstances that some of the money was wasted either as in the decision of Kowaliw[23] of, if not waste it was a premature distribution within the terms of the decision in Townsend[24].
[23] supra
[24] supra
It was submitted that the wife’s evidence was that the vast bulk of the funds which she withdrew went in legal costs. As the funds applied in that fashion were funds available to the parties at separation the most appropriate way when dealing with them is for them all to be added back. Counsel for the husband relied on the decision in NHC & RCH at [56]-[57] to submit that:
Here, the funds existed at separation, were contributed to by both (the husband directly) and were taken and used by the wife, initially without the husband’s knowledge or consent, variously to pay 6 months’ rent in advance (a waste), lend to a boyfriend[25] (without any knowledge or expectation or repayment prospects) and towards legal costs.[26]
[25] Here counsel was referring to a loan of $49,500 to Mr B
[26] Submissions of the Applicant husband page 31 at [115]
Counsel for the Wife stated in her submission that:
7. It is conceded that there is authority for the proposition put by Learned Counsel for the Husband as set out in 110 to 115 of his submissions that there is persuasive authority to add back the funds the court can identify the wife paid from joint funds for legal costs, however it is submitted that it is still a matter for the discretion of the Court.
8. It is further submitted that it is not possible to identify where such payments have been paid from those joint funds. The wife has had post separation income and the $30,000.00 from her parents.[27]
[27] Wife’s Property Submissions page 4 at [7]-[8]
In my view, it does not matter to what purpose the Wife put the funds. The taking and using of the money without the Husband’s knowledge or consent appears to me to be clearly “a premature distribution of a proportion of the matrimonial assets” as described by Nicholson CJ in Townsend at 81,654.
It is not necessary to separate out the amount which was applied towards the Wife’s legal costs. It is conceded that the Wife had paid some $233,804.00 in legal fees, which exceeds the sum of $212,686.34. She also unwisely lent $49,500.00 to Mr B, of which $30,000.00 has been reimbursed by her parents, leaving an amount of $15,000.00 which is unlikely ever to be repaid.
I am satisfied that the entire amount of $212,686.34 can be clearly characterised as a premature distribution of a proportion of the matrimonial assets and the entire amount should be added back into the asset pool.
I find that the amount of $212,686.34 withdrawn by the Wife is to be added back into the asset pool.
Monies withdrawn by Wife whilst Husband overseas
I am not satisfied that any evidence has been shown that the sum of $3,139.00 said to have been withdrawn by the Wife whilst the Husband was overseas should be added back into the asset pool.
Proceeds of sale of shares
The Husband’s submission refers to “Proceeds of sale of shares given by Husband to Wife in the sum of $55,713.00 with the advice in brackets “(see below)”. I cannot find any further reference to this item in the submission.
However, in her affidavit of 4th November 2010 at paragraph [36], the Wife refers to the sale of the shares:
On 7 September 2010 my solicitors received a letter from Watts McCray Solicitors acting on behalf of [Mr Zabini]. Annexed and marked with the letter “X” is a true copy of the letter dated 4 September 2009. With that letter was a cheque for shares that were in my name that I had allegedly sold. At no time did I instruct the broker to sell those share(s) and believe that [Mr Zabini] may have requested for those shares to be sold but because they were in my name the cheque was made out to me and therefore [Mr Zabini]’s solicitors sent it to my solicitors. The proceeds of that sale are accounted for in the spreadsheet which is annexure “?”[28] above.[29]
[28] sic
[29] Affidavit of Ms Zabini 4.11.2010 at [36]
Annexed to the affidavit is a copy of the letter from the Husband’s solicitors to the Wife’s solicitors saying (relevantly):
We refer to previous correspondence and enclose for your attention cheque from [omitted] made payable to your client in the amount of $55,713.76. Our client instructs us that he inadvertently opened this mail. He has instructed us to forward that cheque to your office to ensure that it comes into the possession of your client.[30]
[30] Ibid Annexure “X”
I am satisfied that this amount should be added back into the asset pool as a premature distribution of the former matrimonial assets.
Funds lent by Husband to Sister-in-law and returned to him and used for costs
I am satisfied that this amount should be added back. The Husband deposed at paragraph [44] of his affidavit of 18th October 2010;
On 21 July 2009 I transferred the amount of $16,500.00 into the account of Ms Z, my sister in law.[31]
Jewellery (owned by the Wife)
[31] Affidavit of Mr Zabini 18.10.2010 at [44]
It is contended on behalf of the Husband that the value of the Wife’s jewellery should be assessed at $11,000.00. In the Husband’s affidavit of 18th October 2010 he deposes at paragraph [45] that the Wife had the following items of jewellery in her possession:
a)Engagement Ring, estimated to be worth approximately $5,500.00;
b)Wife’s Wedding Ring, estimated to be worth approximately $250.00;
c)Husband’s Wedding Ring, estimated to be worth approximately $250.00;
d)Necklace given as an engagement present from the Husband’s father, estimated to be worth approximately $1,000.00;
e)Husband’s gold necklace, estimated to be worth approximately $1,500.00;
f)[Y]’s christening necklace, estimated to be worth approximately $1,500.00; and
g)[X]’s christening necklace, estimated to be worth approximately $1,000.00.
On the Husband’s estimation, the total value amounts to $11,000.00.
However, these items are not all admitted by the Wife. As she deposed in her affidavit of 4th November 2010:
[Mr Zabini]’s solicitors have also written to my solicitors regarding various items of jewellery which [Mr Zabini] and I had during our relationship. I still have my engagement and wedding rings however do not believe they have a value of $5,500 and $250 respectively. I do not have or know of the whereabouts of the following items of jewellery:-
a. [Mr Zabini]’s wedding ring.
b. Necklace given to [Mr Zabini] and I[32] as an engagement present by [Mr Zabini]’s father.
c. [Mr Zabini]’s gold necklace.
[32] sic
d. [Y]’s christening necklace.
e. [X]’s christening necklace.[33]
[33] Affidavit of Ms Zabini 4.11.2010 at paragraph [26]
Thus the Wife concedes that she still has her wedding and engagement rings but disputes the values given by the husband. Clearly, there is no evidence that would allow the Court to assign any particular value to either of those items. The Wife deposes that she does not have the other times or know where they are.
In the face of this conflicting evidence, all that can be done is to find that the Wife has an engagement ring and a wedding ring in her possession but assign no value to them.
Loan to Mr B
It is submitted on behalf of the Wife that an amount of $15,000.00 should be added back to the asset pool:
The wife is still owed (at) least $49,500 by Mr B but her parents paid her $30,000.00 so the loan to Mr B has been reduced to $15,000 otherwise, there would have been a loan to Mr B of $49,500 and a loan from the wife’s parents of $30,000. There is little chance she will be repaid the monies from Mr B.[34]
[34] Wife’s Property Submissions page 3 at [6]
As the entire amount of $212,686.34 has already been added back, it would be double counting to include the amount of $15,000.00 still owing be Mr B as a separate asset.
Wife’s Cash and Savings
The Wife concedes an amount of $2,000.00 in cash and a further $4,728.00 in savings. Those amounts will be added to the asset pool.
Money in Husband’s Solicitors’ Trust Account
Counsel for the Wife submitted that a sum of $59,821.00 held in the Husband’s solicitors’ trust account should be added back into the asset pool, relying on a document admitted into evidence as Exhibit 50. This document, headed “Costs Figures”, was prepared for the Husband by one Ms R, presumably an employee of the Husband’s solicitors, and shows that his legal costs and disbursements charged to date (17th May 2012) amounted to $206,408.42, all of which have been paid. A further amount of $14,273.93 is described as “further legal costs and disbursements (including GST) which have not been charged to you”.
The document also shows that there were two amounts of money held on the Husband’s behalf:
a)“Amount currently held in general trust $22,114.93”
b)“Amount currently held in protected trust $37,706.59”.
The total of those two amounts is $59,821.52.
I am not satisfied that this amount should be added back. There does not appear to be any evidence that these funds existed at the date of the parties’ separation. Counsel for the Husband submitted that the legal costs were paid from monies that did not exist at the date of separation. They did not come from the parties’ assets. This appears to be correct.
Cash held by Husband
Counsel for the Wife submitted that the Court would not be satisfied that the husband had fully disclosed his financial position and the sum of at least $108,000.00 should be included in the list of assets, referring to Gould & Gould[35], where it was held by the Full Court of the Family Court that:
…the appropriate approach for his Honour to have adopted in this case would have been to have increased the asset pool to take account of non-disclosure by the husband,[36]
[35] [2007] FamCA 609; (2007) FLC 93-333
[36] Ibid at [27] per Bryant CJ, Finn and Boland JJ
The submission is that:
a)The Husband disclosed nothing in any of his court documents about having cash or that he took such large sums out in cash;
b)It defies logic that as an [occupation omitted] the Husband would choose to keep his spare funds in cash; and
c)The Husband’s evidence was to the effect that the vast majority of his expenses were paid by credit card.[37]
[37] Wife’s Property Submissions page 8 at [29]
In my view, with respect, this argument is speculative and not supported by evidence.
Boats
The Wife in her Property Submission lists two boats as assets of the Husband with a value of $10,500.00. There is no other reference to the boats in the Wife’s submission and they are not referred to in the Financial Statements of either party.
However, the Husband refers to the boats in his affidavit of 18th October 2010:
The two boats, the Bluefin Aluminum[38] 2002 model and the Caribbean Fibreglass 1985 model are in my possession.[39]
[38] sic
[39] Affidavit of Mr Zabini 18.10.2010 at [42]
The Husband also lists the two boats as assets at paragraph [48] of his affidavit.
He does not deny the value attributed to the boats by the wife.
Non-Superannuation Asset Pool
I find the value of the non-superannuation asset pool to be:
a)Property B, [O] $1,150,000.00
b)Property C, [S] $525,000.00
c)Husband’s CBA Bank account $78.00
d)Husband’s [N] Holdings Shares $2,500.00
e)Husband’s Commodore motor vehicle $5,000.00
f)Wife’s [T] shares $6,480.00
g)Household contents $7,500.00
h)Monies withdrawn by Wife (added back) $212,686.34
i)Proceeds of sale of shares forwarded to wife $55,713.76
j)Funds transferred by husband (added back) $16,500.00
k)Wife’s wedding ring and engagement ring No value
l)Wife’s cash $2,000.00
m)Wife’s savings $4,728.00
n)Husband’s two boats $10,500.00
Total non-superannuation assets $1,998,686.10
Liabilities
The parties are at odds about what liabilities there are. The Husband claims the following liabilities:
a)Loan to husband from his father $20,000.00
b)Anticipated Capital Gains Tax Liability arising from sale of Property C, [R] ([S]) $69,000.00
The Wife claims only credit card debts amounting to $1,544.00.
Counsel for the Wife submitted that the Court will reject the Husband’s claim that he owes his father $20,000.00:
There is nothing in any of the husband’s material that he borrowed money from his father.[40]
[40] Wife’s Property Submissions page 6 at [19]
The Husband’s Financial Statement dated 17th February 2010 does not refer to any loan from his father at all.
However, in the affidavit of the Husband’s father, Mr Z, affirmed on 18th October 2010, he refers to an amount of $20,000.00 which he claimed to be his. Mr Z senior refers in paragraph [4] of his affidavit to a series of telephone conversations he had with the wife. Part of the paragraph was deleted after a successful objection, but in the balance of the paragraph Mr Z deposed:
On two occasions in about September 2009, I telephoned [Ms Zabini]…(deleted). [Ms Zabini] and I had a conversation, wherein words were spoken to the following effect:
Me: “[Ms Zabini], I want my $20,000.”
[Ms Zabini]: “Not yet. I need to speak to my solicitors.”
About a week thereafter, I called [Ms Zabini] again and a conversation took place wherein words were spoken to the following effect:
Me: “Have you made a decision yet?”
[Ms Zabini]: “Yes, I am not going to give it to you.”
Me: “then I will take the next step.”
By my last comment, I meant that I would take legal action.[41]
[41] Affidavit of Mr Z 18.10.2010 at paragraph [4]
The Wife does not refer to that amount of $20,000.00 in her affidavit material.
However, in my view, there is unchallenged evidence that the Wife had obtained an amount of $20,000.00 claimed by Mr Z. This amount is to be added as a liability against the Wife.
The Wife does not agree with the Husband’s claim that anticipated Capital Gains Tax arising from the sale of Property R or [S] should be shown as a liability.
In the Husband’s submissions, the Court is referred to paragraph [18] of the husband’s affidavit of 18th October 2010, but that reference is clearly incorrect.
Counsel for the Wife submitted that the Court would not take into account any notional Capital Gains Tax on the sale of the Property C unit in circumstances where the Husband does not seek an order for its sale, referring to Rosati & Rosati[42].
[42] [1998] FamCA 38; (1998) 23 Fam LR 288; FLC 92-804
In my view, the fact that the Husband is seeking a transfer of the property rather than an order for its sale militates against a finding that potential Capital Gains Tax should be considered as a liability. The issue was indeed considered by the Full Court of the Family Court in Rosati, where their Honours (Ellis, Lindenmayer and Kay JJ) laid down some general principles:
(a)Whether the incidence of capital gains tax should be taken into account in valuing a particular asset varies according to the circumstances of the case…
(b)If the court orders the sale of an asset, or is satisfied that a sale of it is inevitable, or would probably occur in the near future, or if the asset is one which was acquired solely as an investment and with a view to its ultimate sale for profit, then, generally, allowance should be made for any capital gains tax payable upon such a sale in determining the value of that asset for the purpose of the proceedings.
(c)If none of the circumstances referred to in (b) applies to a particular asset, but the court is satisfied that there is a significant risk that the asset will have to be sold in the short to mid term, then the court, while not making allowance for the capital gains tax payable on such a sale in determining the value of the asset, may take that risk into account as a s.75(2) factor…
(d)There may be special circumstances in a particular case which, despite the absence of any certainty or even likelihood of a sale of an asset in the foreseeable future, make it appropriate to take the incidence of capital gains tax into account when valuing the asset…[43]
[43] (1998) 23 Fam LR 288 at 314 [6.36]; FLC 92-804 at 85,043 [6.36]
I am not satisfied that it is appropriate to take into account any notional Capital Gains Tax in the circumstances, where the Husband merely seeks a transfer of the asset to him.
The Wife’s credit card debts are set out on a sheet headed “[Ms Zabini]’s financial position as of 21st May 2012” which was admitted into evidence as Exhibit 53. She claims the following credit card debts:
a)CBA Debit MasterCard $1,532.00
b)ANZ Credit Card $12.81
Total card debts $1,544.81
I find the parties’ liabilities to be the following:
a)Amount owed to Mr Z $20,000.00
b)Wife’s credit card debts $1,544.81
Total liabilities $21,544.81
The Wife’s Superannuation
The Husband’s submission gives a value to the Wife’s superannuation as $24,181.00 (see at [32] above). However, the more up-to-date figure appears in the Record of Contributions from [H] Super Fund dated 31st December 2010 (Exhibit 27), showing an opening account balance of $28,145.94.
Accordingly, I find the value of the Wife’s interest in [H] Super Fund is $28,145.94.
Superannuation Asset Pool
I find the value of the parties’ superannuation to be:
a)Husband’s interest in [V] Super Plan $138,523.00
b)Husband’s [C] Superannuation $95,997.00
c)Wife’s [H] Super Fund $28,145.94
Total $262,665.94
The gross value of the parties’ non-superannuation asset pool is $1,998,686.10.
The liabilities amount to $21,544.81.
By deducting the total liabilities from the total of the non-superannuation asset pool, the net value of the non-superannuation pool stands at $1,997,141.29.
The total of the parties’ superannuation stands at $262,665.94.
The net total, combining the net non-superannuation asset pool with the superannuation pool, amounts to $2,259,807.23.
The Parties’ Contributions
In my view, the contributions favour the Husband.
The parties commenced living together on about [date omitted] 1999 and were married on [date omitted] of that year. They separated on 16th July 2009. Thus, the marriage lasted approximately ten years.
The Husband’s initial contribution was greater than that of the Wife as he brought more by way of assets into the marriage. The assets of the Husband at the commencement of cohabitation were:
a)The property at Property C, which he purchased for approximately $183,000.00 and which is now valued at $525,000.00;
b)An unencumbered property at Property E, [S], which was sold in July 1999 for $197,000.00, returning a net figure of about $192,000.00;[44]
c)A superannuation entitlement with [C] Super, submitted to be worth about $75,170.92[45] but appears to have had a closing balance of $24,344.10 as at 30 June 1999;[46]
d)A share portfolio worth about $74,283.23 in October 1999;[47]
e)Savings of about $10,000.00[48];
f)A Ford XD motor vehicle[49];
g)Money received as a redundancy payout from [omitted] in about April 1999 in the sum of about $40,000.00;[50] and
h)Some furniture, furnishings and effects.
[44] Affidavit of Mr Zabini 18.10.2010 at [21] and [24.b]
[45] Ibid at [24.c]
[46] Ibid at Exhibit PTZ 2
[47] Ibid at Exhibit PTZ 3
[48] Ibid at [24.e]
[49] Ibid at [24.f]
[50] Ibid at [23] and [24.g]
The Wife brought some assets into the marriage:
a)[omitted] shares worth about $10,000.00 which were purchased for her by the Husband in November 1998;[51]
b)A Magna motor vehicle;[52]
c)Superannuation of about $10,782.75;[53]
d)Furniture and effects; and
e)The net proceeds of sale of a property in [L] amounting to about $30,000.00.
[51] Ibid at [22] and [25]
[52] Ibid at [25.b]
[53] Ibid at [25.c]
Counsel for the Husband referred the Court to the decision of the Full Court of the Family Court in Pierce & Pierce[54], where the Court (Ellis, Baker and O’Ryan JJ) held at [28]:
In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase of the matrimonial home.[55]
[54] [1998] FamCA 74; (1999) 24 Fam LR 377; FLC 92-844
[55] (1999) 24 Fam LR 377 at 385-386 [28]; FLC 92-844 85,881 [28]
In the present case, the net proceeds of sale of the Husband’s property at Property E, [S], were applied towards the purchase of the parties’ property at Property G, [O].
It is also the case that the Wife applied the net proceeds of sale of her [L] for the benefit of the family.
The initial contributions favour the husband over the Wife.
During the ten years of marriage, the Husband made the major financial contribution. However, the Wife worked full time, taking maternity leave when the children [X] and [Y] were born, and then commenced working part-time.
It was the Wife who made the made the major contribution as homemaker and parent during the marriage, especially so as the evidence shows that the Husband worked long hours and was often away interstate or overseas on business.
During the term of the marriage, the parties’ contributions are assessed as equal.
The post-separation contributions also need to be examined. From the date of separation in July 2009 until the recent parenting decision (Zabini & Zabini[56]) on 5th April 2013, the Wife has been the major caregiver to the two boys. The Husband has paid child support.
[56] [2013] FMCAfam 298
Against this, the Wife has had the benefit of exclusive occupation of the former matrimonial home in [O], whilst the Husband has resided with his father.
Counsel for the Husband submits that:
a)the Husband’s “very much greater initial contributions”;
b)the equality of contributions through the marriage; and
c)the post separation contributions “which it is contended favour the husband”;
the contributions should be assessed as favouring the Husband 70% to 30% on behalf of the Wife.
However, counsel for the Wife, without suggesting any particular percentage by way of contributions, submits that the Husband should not be heard to assert that giving the Wife exclusive occupation of the former matrimonial home was to his detriment, as that was one of the orders that he sought in the interim parenting proceedings on 31st August 2009.
Counsel for the Wife also submits that, since separation:
a)the Husband has retained the rent from the Property C property to the exclusion of the Wife; and
b)the Wife has had the primary care of the children, “including extended periods where she has had 100% care of [X] while he was refusing to attend his father’s home”.[57]
[57] Wife’s Property Submissions page 13 at [32]
In my view, the post-separation contributions should be assessed as approximately equal.
Taking into account the Husband’s significantly greater contributions at the commencement of the marriage and the equality of contributions thereafter, I am not persuaded that the Husband has made out his contention that the contributions should be assessed as 70% to the Husband and 30% to the Wife. In all the circumstances, I am satisfied that the contributions should be assessed as 60% by the Husband and 40% by the Wife.
Other Factors taken into Account under Subsection 79(4)(d) (e) & (g)
Paragraph (d) of subsection 79(4) requires the Court to take into account the effect of any proposed order on the earning capacity of either party. There will be no effect on the earning capacity of either party.
That said, I am aware that there is already a substantial disparity between the earning capacity of the husband and that of the Wife, even if she were to return to work full time. Counsel for the Husband concedes as much in his Submissions at paragraphs [129] to [131]. He submits at [132] that there would need to be an adjustment in favour of the Wife and suggests that a 5% adjustment would be an appropriate one.
Paragraph (e) of subsection 79(4) requires the Court to take into account the matters referred to in subsection 75(2) so far as they are relevant.
Whilst counsel for the husband has taken an overview approach to the matters in s.75(2) in his submissions, counsel for the Wife has provided a detailed submission, addressing each of the s.75(2) factors.
The Husband was born [in] 1967[58]. He is therefore 45 years and [omitted] months old. The Wife was born [in] 1970.[59]Accordingly, she has recently attained the age of 43 years.
[58] Affidavit of Mr Zabini 18.10.2010 at [4]
[59] Affidavit of Ms Zabini 4.11.2010 at [1]
The Husband appears to be in good health. The Wife has had some difficulties with consumption of alcohol but her counsel now submits that there are “no health matters that would impact on the future employment prospects of either party”.[60]
[60] Wife’s Property Submissions page 15 at [46]
As mentioned at [116] above, there is a significant disparity between the incomes of the parties. The Husband is in full-time employment, earning in excess of $182,000.00 per year. He also receives rent of $19,000.00 per year from the Property C property.
The Wife has been working part-time, where she earned about $42,000.00 per year. As the two children are now to be living with their father, she would now be free to seek full-time employment, but at present she does not have full-time employment.
Ms Haughton submits, tellingly, that the most valuable asset a person can take from a marriage is an established earning capacity[61] and refers the Court to the decisions of Best & Best[62] and Clauson & Clauson[63]. In Clauson, the Full Court of the Family Court said:
It has long been recognised that in most cases the most valuable “asset” a party can take out of the marriage is a substantial, reliable, income-earning capacity: see Best (1993) 16 Fam LR 937; [1993] FLC 92-418 at Fam LR 962; FLC 80,295.[64]
[61] Ibid page 16 at [52]
[62] (1993) 16 Fam LR 937; FLC 92-418
[63] (1995) 18 Fam LR 693; FLC 92-595
[64] (1995) 18 Fam LR 710; FLC 81,911
It is submitted that the outcome of the proceedings will be that the Husband retains two properties which are at present unencumbered and he will retain significant superannuation entitlements. By comparison, the Wife will not receive sufficient funds to purchase a property and will have to obtain rental accommodation.
Counsel for the Wife goes on to make this telling submission:
If the Court were to notionally “add back” as being in the wife’s possession the funds she took at separation, or any part of them, then even though they are technically on her side of the “ledger”, those funds no longer exist and the disparity between what the husband has available to him compared to that which the wife will have access to is significantly increased.[65]
[65] Wife’s Property Submissions pages 16-17 at [55]
As a result of the recent parenting orders, the Husband will have the care of the children [X] and [Y], both of whom are under the age of 18 years. [X] was born [in] 2000, so he is aged 12 years and [omitted] months. [Y] was born [in] 2003, which means that he has recently attained the age of 10 years.
[X] has just started High School, whilst [Y] is still in Primary School.
It is submitted that even without having the primary care of the children, the Wife will have limited income to pay for anything other than a very modest standard of living for herself. By comparison, the Husband will be able to enjoy a high standard of living, even with the full time care of the children.
Neither party has any responsibility to support any other person.
Neither party is eligible for a pension.
Whilst the parties had a high standard of living before they separated, the Wife will no longer be able to enjoy the same standard of living that the husband will have available to him.
The Husband has been living with his father but wishes to move back into the former matrimonial home. The Wife is not living with any other person.
The Husband was paying child support. The assessment will need to be varied now that the children will be living with him. The Wife has a significantly lower income than the Husband which will limit the amount of child support she will be able to pay (see also s.79(4)(g)).
Other Orders under the Family Law Act affecting the parties or a child of the marriage – s.79(4)(f)
As previously mentioned, there were Orders made on 5th April 2013 providing that the children of the marriage would live with the Husband (Zabini & Zabini[66]).
[66] [2013] FMCAfam 298
Counsel for the Wife submits that the following should be taken into account as s.75(2) factors:
a)The Husband earns substantially more than the Wife and will do so for the foreseeable future;
b)If the parties two children were to be in the Husband’s full time care, it would not have the same significant negative impact on the Husband’s financial position in the future as it would on that of the Wife if the children had remained living with her;
c)If the children had remained living with the Wife, given the disparity in the parties’ incomes, there should be an adjustment in the Wife’s favour of 20%;
d)If the amounts retained by the Wife were added back to the pool, there should be a greater adjustment because the Wife will be notionally receiving up to $268,399.00 that has already been spent; and
e)If the Court were to determine not to include the sum of $108,000.00 submitted on behalf of the Wife that the Husband has failed to disclose, then the pool will be smaller but it would still be appropriate to take that amount, or something like that, as a s.75(2)(o) matter.
Paragraph (o) of s.75(2) requires the Court to take into account:
any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account.
Counsel for the Husband has submitted that:
130.The Husband has at present a capacity to earn a substantial income, far more than does the Wife even if she were to work full time. The aspect of the disparity and income earning capacity favours the Wife.
131.Thus when one stands back from the detail it can be seen that the future needs factors are such that there would still need to be a small adjustment in favour of the Wife when balancing out on one hand the Husband’s significantly greater income than that of the Wife as against the prospective position regarding the parenting of the children.
132.It is suggested that a 5% adjustment would be an appropriate one in all the circumstances. It must be remembered in this respect that decisions such as Clauson looked to the real effect of an adjustment of this type and in that regard a 5% adjustment would lead to a disparity as between the parties of 10%. Ten percent here is approximately $220,000 – which is contended in real terms to be an adequate adjustment over and above the contribution findings.[67]
[67] Submissions of the Applicant Husband pages 33-34 at [130]-[132]
This is a persuasive submission. Taking into account the disparity in the parties’ income and earning capacity, even allowing for the fact that the children will now be in the care of the Husband, there is justification for a percentage adjustment in favour of the Wife. It is now the case that the Wife will not seek to remain living in the former matrimonial home at [O] and she will need funds to re-house herself.
The adjustment to the parties’ contribution based entitlements is assessed at 5% in favour of the Wife.
Thus, I assess the parties’ entitlements at 55% to the Husband and 45% to the Wife. However, the Court must still decide what Orders would be just and equitable in all the circumstances.
Just and Equitable
Subsection 79(2) provides that the Court shall not make an order under s.79 unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
The parties have separated and have engaged in extensive and expensive litigation as a result. It appears clear that the marital relationship is over and the parties need to move on with their lives. Section 81 of the Act provides:
In proceedings under this Part, other than proceedings under section 78 or proceedings with respect to maintenance, payable during the subsistence of a marriage, the court shall, as far as practicable, make such orders as will finally determine the financial relationship between the parties to the marriage ands avoid further proceedings between them.
This is such a case, in my view.
The Husband seeks orders that would leave him solely entitled to the former matrimonial home at [O] and the property at Property C. He proposes a superannuation splitting order and a payment to the Wife of $341,609.71.
The Wife concedes that she can no longer remain living in the former matrimonial home, which means that she will need to obtain other accommodation for herself and for the two boys when they spend time with her. She does not want a superannuation splitting order. Instead, she seeks a payment to her of $1,150,000.00, which is the agreed value of the former matrimonial home.
It is submitted that the Wife will have limited cash available to purchase a property and will not be able to do so with the amount of $341,609.71 proposed to be paid to her by the Husband. She has, and may well have in the future, a modest salary and a limited ability to borrow funds to purchase a property.
It is also submitted on behalf of the Wife that adding back on to the Wife’s side of the “ledger” the amount of $212,686.34 which the Wife withdrew from the bank at about the time of separation and the proceeds of the sale of shares amounting to $55,713.76 will be to the Wife’s detriment, as those funds no longer exist.
The fact is that the Wife did receive the money. A significant part of the money was expended on legal costs and disbursements, which was clearly necessary, but the Wife also made an ill-advised decision to lend an amount of about $49,500.00 to her then friend Mr B. None of this money has been paid back and it appears unlikely that it ever will be. In my view, justice and equity requires that the Wife will need to be responsible for the consequences of her action in making this loan, which has resulted in the waste of a significant sum of money.
The amount of $212,686.34 which the Wife withdrew apparently included a sum of $20,000.00 which Mr Z claims to be his. There is no evidence as to how this amount of money came to be in this bank account, but in my view justice and equity requires that the Husband should be responsible for repaying this amount to his father.
Orders to be Made
The net total of the parties’ assets amounts to $2,259,807.00 (to the nearest dollar).
The Husband will be entitled to 55% of the net assets, amounting to $1,242,894.00 (to the nearest dollar).
The Wife will be entitled to 45% of the net assets, amounting to $1,016,913.00 (to the nearest dollar).
The Husband will retain:
a)Property B, [O], subject to a payment to the Wife;
b)Property C, [S];
c)His superannuation amounting to $234,520.00;
d)His CBA bank account;
e)His [N] Holdings shares;
f)The $16,500.00 added back; and
g)The two boats.
The Husband will assume the responsibility of repaying the sum of $20,000.00 to his father, Mr Z.
The Wife will retain:
a)Her [T] shares $6,480.00
b)Household contents $7,500.00
c)The sum withdrawn from the bank $212,686.00[68]
[68] Rounded down
d)The proceeds of the sale of shares $55,714.00[69]
e)Her wedding and engagement rings No value assigned
f)Her cash $2,000.00
g)Her savings $4,728.00
h)The Holden Commodore $5,000.00
Her superannuation $28,146.00[70]
Total $289,924.00
[69] To the nearest dollar
[70] To the nearest dollar
The Wife will be responsible for her credit card debts totalling $1,545.00.[71]
[71] To the nearest dollar
Thus, the Wife will retain assets valued at $288,379.00.
In order for the Wife to obtain her entitlement of $1,016,913.00, the Husband will need to pay to her the sum of $728,534.00.
I propose to allow the Husband three months to obtain the necessary finance to pay the Wife the sum of $728,534.00. This period of time will allow the Wife the opportunity to look for other accommodation, if she has not done so already.
Clearly, a payment of $728,534.00 is higher than the Husband sought to pay. However, in return he will receive the home at [O] and the premises in Property C, [S], being unencumbered real estate with a total value of $1,675,000.00. His superannuation, amounting to $234,520.00, remains untouched. The husband retains his significant earning capacity.
The Wife will receive a sum of $728,534.00 and the Holden Commodore motor car. Her superannuation, in the relatively modest sum of $28,146.00, remains untouched. She has, of course, already had the benefit of two premature distributions amounting to $268,400.00. The Wife retains her earning capacity which is less than that of the Husband.
In all the circumstances, I consider that the orders to be made are just and equitable.
Costs
Neither party has raised the issue of an order for costs. It may well be the case that neither party seeks a costs order. Costs are discretionary and any party seeking a costs order will need to satisfy the Court that there are circumstances that justify an order.
If either party wishes to pursue an application for costs, he or she may do so by way of a written submission, to be filed and served on the other party within 21 days. A further 14 days will be allowed for any written submission in reply.
I certify that the preceding one hundred and sixty-four (164) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Associate:
Date: 11 April 2013
Key Legal Topics
Areas of Law
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Family Law
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Property Law
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Equity & Trusts
Legal Concepts
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Remedies
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Costs
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Res Judicata
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Injunction
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Procedural Fairness
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