Last Updated: 3 August 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
Date of Last Submission:
29 April 2015
(1) On or before 20 October 2015 the property situate at and known as Property C (“the real property”) be placed on the market and there be an auction sale (“the sale”) with such settlement to be for a period not exceeding 90 days and with the reserve price to be agreed at $630,000, and upon completion of the sale (“the settlement”), the proceeds of the sale be applied as follows:
<li “=””>(a) Firstly, to pay all costs, commissions and expenses of the sale;<li “=””>(b) Secondly, to discharge the mortgage or other encumbrance affecting the real property;<li “=””>(c) Thirdly, the balance to Aaron Eidelson solicitor, for and on behalf of the Husband;
(2) Contemporaneously with the settlement of the sale of the real property, the Wife shall cause to be paid to Aaron Eidelson solicitor for and on behalf of the Husband an amount that, together with the net proceeds of sale, equals 22.5% of the matrimonial assets and liabilities exclusive of superannuation and the Wife’s inheritance as is set out in paragraph 138 of the judgment delivered 17 July 2015.
(3) Contemporaneously with the Husband receiving all monies payable to him pursuant to Order 1(c) and Order 2 herein, the husband shall do all such acts and things and sign all necessary documents as to withdraw, at his expense, any caveat(s) which the Husband has lodged over any properties in the name of or belonging to the Wife, including but not limited to:
<li “=””>(a) Property C;<li “=””>(b) Property B; and<li “=””>(c) Property N.
(4) The parties hold their respective interests in the real property upon trust pursuant to these orders.
(5) The Wife pay the sum of $5,000 to Mr B in full satisfaction of all monies owing by the parties to Mr B.
(6) Orders 6 to 14 inclusive bind the Trustee of the [V] Superannuation Fund (“the Fund”) member name [Ms Anthis] and member number [omitted].
(7) The Court allocate, pursuant to Section 90MT(4) of the Family Law Act 1975, a base amount of $47,402 to the Husband out of the Wife’s interest in the [V] Superannuation Fund member number [omitted].
(8) Pursuant to paragraph 90MT(1)(a) of the Family Law Act 1975 whenever the Trustee makes a splittable payment from the interest held by the Wife the Trustee:
<li “=””>(a) Pay the Husband or his legal personal representative and assigns the entitlement calculated in accordance with
; and<li “=””>(b) Make a corresponding reduction in the entitlement the Wife would have had in the Fund but for these Orders.
(9) Order 7 has effect from the operative time.
(10) The operative time of these Orders is four (4) business days after the day on which the final sealed, signed Orders are served on the Trustee.
(11) The Trustee of the Fund do all such acts and things and sign all such documents as may be necessary so that the Trustee, in accordance with the obligations set out under the Family Law Act 1975 and Family Law (Superannuation) Regulations 2001, can calculate the entitlement of, and make payment to the Wife in accordance with Order 7 of these Orders.
(12) Upon receipt by the Husband of a payment split notice when issued by the Trustee pursuant to r.7A.03 of the Superannuation Industry (Supervision) Regulations 1994, the Husband exercise his election pursuant to r.7A.06 of the Superannuation Industry (Supervision) Regulations 1994 to request the Trustee to rollover or transfer the transferable benefits as defined by r.1.03(1) of the Superannuation Industry (Supervision) Regulations 1994 to another fund of the Husband’s choosing.
(13) Following the action taken by the Trustee of the Fund as contemplated in r.14F(2)(b) of the Family Law (Superannuation) Regulations 2001, the provisions of r.14 of the Family Law (Superannuation) Regulations 2001 will make any splittable payments, following the action by the Trustee, non-splittable.
(14) Until the happening of any of:
<li “=””>(a) The establishment of a separate account in the name of the Husband in the Fund; or<li “=””>(b) The transfer or “rolling over” into another superannuation fund the payment split created by Order 11 hereof; or<li “=””>(c) The Wife satisfies a condition of release and is paid the payment split which is created by Order 7 hereof; or<li “=””>(d) The Husband executes a waiver or rights within the meaning of
in relation to the payment split created by Order 7 hereof.
the Wife be and is hereby restrained by herself, her servants or agents from executing a binding death benefit nomination in favour of any person or from doing any such act or thing would render any part of her interest in the Fund a non-splittable payment within the meaning of r.13 of the Family Law (Superannuation) Regulations 2001.
(15) Until the operative time of these Orders the Wife be restrained by herself, her servants or agents from making application for withdrawal of any funds from her interest in the Fund.
(16) Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
<li “=””>(a) Each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) owned by or in the possession of such party as at the date of these orders (the furniture, personal possessions, and like chattels in the property being deemed to be in the possession of the Husband/Wife).<li “=””>(b) Insurance policies remain the sole property of the owner named thereon/in.<li “=””>(c) Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.<li “=””>(d) Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
(17) The applicant Husband have leave to make an oral application for the Husband’s costs of the proceedings as from 20 October 2014.
(18) The Husband’s solicitors provide to the Court and the Wife’s solicitors written submissions on the question of the Husband’s costs on or before 31 July 2015.
(19) The Wife’s solicitors provide to the Court and the Husband’s solicitors answering submissions on or before 14 August 2015.
AND THE COURT NOTES THAT:
- That pursuant to Section 81 of the Family Law Act 1975 the parties intend these orders shall as far as practicable finally determine the financial relationships between them and avoid further proceedings between them.
- The Husband’s costs application shall be determined on the papers.
FEDERAL CIRCUIT COURT
REASONS FOR JUDGMENT
- This matter relates to the adjustment of property after the breakdown of the parties’ marriage.
- The Husband is seeking orders that the parties’ realisable assets, including the properties inherited by the Wife from the estate of her late mother, be divided such that he receive 35% of same and the Wife receive 65%.
- It is the Husband’s submission that the property inherited by the Wife from her late mother’s estate shortly before separation, and in particular the property at Property B, should be included in the pool of assets to be divided between the parties as it was the matrimonial home for the entirety of the marriage and because the joint contributions made by the parties to that property are such that it falls within the exceptional circumstances referred to be Cronin J in the matter of Verley v Verley (No.2)  FamCA 326.
- The Husband acknowledges that the matrimonial assets are as a direct result of the contributions made by the Wife and more particularly the Wife’s mother. He argues however that he has made a considerable contribution to the matrimonial assets during the marriage as a result of the extensive restorative work he performed on two of the parties’ properties during the relationship.
- The Husband further argues that there should be an adjustment in his favour pursuant to s.75(2) of the Family Law Act 1975 (Cth) (‘the Act’) because the Wife has a greater earning capacity as she will earn more as a [omitted] than he will as a [omitted], the wife has greater financial resources including real estate and rental income and because he should be afforded the opportunity by way of property division to obtain a reasonable standard of living given he is currently, for all intents and purposes, homeless.
- The Wife is seeking orders that she pay the Husband the sum of $120,000 which is 10 % of the property pool, excluding the inheritance received by her from her late mother’s estate.
- It is the Wife’s argument that her inheritance from her late mother’s estate should not be included in the pool of assets for division between the parties as the Husband made no contribution whatsoever to those properties and as such they should be considered separately to the matrimonial assets that existed during the marriage.
- In relation to those properties which the Wife says comprise the pool for division, it is the Wife’s submission that the Husband made no contribution whatsoever to the acquisition of those properties. Further the Wife argues the Husband made a negative contribution to the parties’ asset pool as he gambled in excess of $200,000 during the marriage including over $100,000 borrowed by the parties for the renovation and restoration of the properties.
- The Wife argues the restoration work conducted by the Husband on the properties over a period of six years added no value to the properties as it was never completed by him. The Wife further argues the Husband’s restoration efforts negatively impacted on the parties’ financial circumstances because those properties were unable to be rented and earn income whilst the restoration work was being carried out.
- The Wife argues there should be no adjustment for s.75(2) factors as her superior earning capacity is offset by her responsibilities both physically and financially for the primary care of the parties’ ten year old son who lives with her and spends very limited time with the Husband and for whom the Husband has paid and will continue to pay minimal child support.
- Both parties propose there be orders that equalise their superannuation entitlements.
- The Husband was born on [omitted] 1962 and is aged 53 years. He is currently employed working for cash as a [omitted] and also on a part time basis as a [omitted]. The Husband has not re-partnered.
- The Wife was born on [omitted] 1964 and is aged 51 years. She is currently employed three days per week as a [omitted]. The Wife was employed four days per week but her hours were reduced to three days per week in 2015 by the [workplace]. The Wife has not re-partnered.
- In May 1980 the Wife’s parents purchased the property at Property N (“Property N”) utilising their savings and by way of a mortgage. In September 1996 the Wife’s parents fully discharged the mortgage on Property N. Property N consists of a downstairs retail area and a three bedroom residential area that is located upstairs and at the rear of the property.
- In November 1998, the Wife’s parents transferred a 50% interest in Property N to the Wife as a gift.
- In 2000, the Wife’s father died.
- On 3 February 2001 the parties met.
- In March 2001, the Husband and his brother Mr N established a [omitted] business “[H]”. The Husband worked in the business as a qualified [omitted] and his brother operated the retail side of the business.
- In September 2001, the Wife purchased the property at Property C (“Property C”) for $260,000 using monies gifted to her by her Mother and by way of a mortgage of $137,000. The property was tenanted at the time of purchase.
- It is the Husband’s evidence that the Wife’s mother “gifted” the parties the money to purchase Property C to both he and the Wife as an engagement present with the expectation that Property C would be their matrimonial home.
- The Wife adamantly denies her mother “gifted” the funds to both she and the Husband to purchase Property C.
- The parties became engaged in October 2001 and married on [omitted] 2002.
- After they married the parties moved in with the Wife’s mother
in her unencumbered property at Property B, (“Property B”). The parties lived with the Wife’s mother for the entirety of their relationship during which period the parties paid no rent and the Wife’s mother paid all outgoings in relation to the property including rates and utilities. The Wife’s mother also purchased all the groceries and food for the household. After the birth of the parties’ son [X], the Wife’s mother assisted in [X]’s care to the extent that she is described by the Husband as his “primary carer”.
- It is the Wife’s evidence that it was intended that the parties would live in Property C after they married. After the parties were engaged, the Husband expressed a desire to do some work to restore the Victorian look of the interior of Property C. It was because this work was being undertaken and never completed by the Husband that the parties lived with the Wife’s mother for the entirety of the marriage.
- In mid-2003 the Husband and his brother’s [omitted] business, [H], closed with the Husband’s brother making a loss of approximately $200,000.
- After the closure of [H] the Husband retained the stock and fixtures which he initially stored at Property C and later at Property N.
- In 2004, the Wife commenced permanent employment as [omitted].
- In March 2005, the Wife’s mother gave to the Wife her 50% interest in Property N so that the Wife became the sole owner of that property.
- On [date omitted] 2005, the parties’ son [X] was born.
- From the date of marriage until 2006 the Property N property was occupied by tenants who paid a commercial rental. In 2006 the Husband commenced restoration of Property N with the aim that this property would be set up as a [business omitted] from which the Husband could operate his own [omitted] business. The Husband was also to restore/renovate the residential section of Property N.
- From 2006 the Husband began purchasing [omitted] stock and equipment as well as fixtures for his proposed business. These were all stored in the Property N premises.
- Between 2004 and 2009 the Property C property was refinanced to fund the restoration works allegedly being carried out by the Husband on Property C and Property N. The refinancing was as follows:
May 2004: $25,000 drawn down on the Westpac home loan
October 2004: $4,000 drawn down on the Westpac home loan
Early 2005: Second mortgage taken out on Property C with Westpac in the sum of $63,000
July 2005: Westpac Equity Access Loan Account taken out with a draw down limit of $40,000. The entire proceeds of this account were drawn down between August 2005 and April 2006
April 2006: Parties pay out the $40,000 Westpac Equity Access Loan Account by taking out a new Westpac Equity Loan Account of $55,000
June 2006: Wife takes out personal loan of $30,000 with ANZ bank
November 2006: Husband takes out Westpac Business Access Loan Account with a credit limit of $40,000. The Wife guarantees this loan and it is secured over Property C.
2009: The parties’ various loans with the Westpac Bank refinanced through RAMS as follows:
(a) RAMS Home Loan Account ending 315 for $40,000 secured against Property C
(b) RAMS Home Loan Account ending 273 for $240,000 secured against Property C
(c) RAMS Line of Credit with a debit balance of $52,000 in the parties’ joint names.
- At all times during the relationship and since separation all mortgages and loans have been paid by the Wife.
- In July 2009, after probate was granted in the Wife’s father’s estate, a 75% interest in a property in [V], Greece was transferred to the Wife from the estate of her late father.
- In 2010, at the Husband’s request, the Wife agreed to take out a loan in her name to be secured against Property N. The loan was for the benefit of the Husband’s brother Mr N and was taken out on the basis that
Mr N would meet all the loan payments.
- The Husband’s brother defaulted on the loan secured against Property N and the mortgagee commenced Supreme Court proceedings against the Wife and the Husband’s brother. Default judgment was entered into against the Wife.
- On 31 March 2014 settlement was achieved in relation to the Supreme Court proceedings relating to Property N when Mr N refinanced the loan into his own name and the mortgage over Property N was paid out. The Wife incurred $15,000 of legal costs in defending the Supreme Court proceedings.
- In 2011 the Husband obtained a $30,000 personal loan from Aussie Home Loans. The Wife had no knowledge the Husband had taken out this loan until it was disclosed during these proceedings. It is the Husband’s evidence that he used these monies to make cash payments for the Property C and Property N restoration/renovation work.
- It is the Wife’s evidence the parties separated under the one roof on
1 July 2012. It is the Husband’s evidence the parties separated on
1 August 2013.
- Between September 2012 and December 2012 the Husband attended upon Ms C psychologist for counselling in relation to the breakdown of his relationship with the Wife.
- On 10 September 2012 the Wife executed a new Will in which she named the Husband as one of her executors and bequeathed to him a life interest in Property N on the condition he was conducting a business from those premises at that time. The Wife also bequeathed a half interest in Property C to the Husband. The Wife executed an Enduring Power of Attorney in which she named the Husband as one of her attorney’s.
- On 11 November 2012 the Wife’s mother passed away after being diagnosed with cancer in mid-2011.
- At the Wife’s mother’s funeral the Husband did not sit with the Wife and [X] and did not stand with the Wife as she received the condolences of those attending the funeral.
- The Wife, as an only child is the sole beneficiary of her late mother’s estate. The Wife is as yet to obtain a grant of probate for her mother’s estate either in Australia or Greece. The Wife’s mother’s estate consists of:
- Property B;
- the household contents of Property B;
- 6.5% of a property in [M], Greece (bringing the Wife’s total interest in that property to 25%);
- 25% of the property in [V], Greece (bringing the Wife’s interest in that property to 100%);
- bank accounts of minimal value in Greece; and
- bank accounts in Australia used to pay the Wife’s mother’s funeral expenses.
- In January 2013 the Wife was diagnosed with breast cancer. The Husband did not attend any of the Wife’s specialist appointments or visit her in hospital when she underwent surgery. Fortunately, the Wife’s cancer has been successfully treated and the Wife is currently in remission.
- On 1 August 2013 the parties physically separated when the Husband left Property B. It is the Husband’s evidence that this is the date of separation.
- The Wife filed an Application for Divorce on 2 December 2013 in which the Wife stated the date of separation to be 1 July 2012. The Husband filed a Response to Divorce disputing the date of separation. He asserted it was 1 August 2013.
- On 3 January 2014 the Husband filed an Initiating Application in the Federal Circuit Court seeking property and parenting orders. The Husband’s application was returnable 25 February 2014.
- On 25 February 2014 Interim Orders were made which restrained the Wife from selling or encumbering any assets of the marriage save that the Wife was entitled to borrow up to $300,000 to refinance the loan taken out for the Husband’s brother’s benefit that was encumbering the
Property N property, such sum of $300,000 to include no more than $50,000 for the Wife’s personal needs.
- At the time this Order was made, the Supreme Court proceedings arising from the Husband’s brother’s default on the loan secured over Property N was still on foot.
- In June 2014 the Wife refinanced the RAMS loans secured over Property C with the ANZ bank. The total amount required to discharge the RAMS loans was $332,000 and the Wife borrowed an additional $76,000, increasing the mortgage secured over Property C to $408,000.
- It is the Wife’s evidence that she did not properly understand the Orders made on 25 February 2014 prevented her from refinancing the loans on Property C. As the Supreme Court proceedings had been settled and she had not had to take out a loan on Property N she believed she could consolidate the Property C loans.
- It is the Wife’s evidence that she utilised the additional $76,000 borrowed by her as follows:
- $26,866.36 on necessary repairs to Property C and Property N to make them habitable;
- $13,500 to repay personal loans to friends from whom the Wife had borrowed money to pay insurances, rates and other outgoings on the Property N and Property C properties;
- $21,568 to discharge a [omitted] Credit Union personal loan taken out by the Wife after separation; and
- the balance on living expenses for herself and [X].
- The C property has been rented privately by the Wife since approximately mid-2014. The Wife is receiving $280 per week in rental. It is the Wife’s evidence that the Property C “restoration” has never been properly completed by the Husband and further works will need to be done before the property can be put into the hands of a real estate agent.
- It is the Wife’s evidence that she does not currently have the funds to complete the works required at Property C.
- The Husband disputes the Property C restoration/renovation was not completed by him. It is his evidence he completed the renovations in 2013 prior to separation.
- In September 2014 the Wife entered into a four year lease for the ground floor (the retail premises) of Property N with Mr G at a rental of $29,000 per annum plus 50% of all outgoings including insurances, council rates and water rates.
- Under the terms of the lease Mr G received a four month rent free period as he agreed to fit out the premises at his expense (he operates an [omitted] business from the premises) including connecting the premises to the sewerage system.
- In an Affidavit sworn 15 April 2014 by Mr G, he deposes to spending $100,000 in the fit out and necessary works to enable Property N to be used for his business. Mr G’s evidence is not challenged by the Husband.
- It is the Wife’s evidence that there is considerable work required to enable the residential part of Property N to be brought up to a condition that would enable it to be rented commercially.
- It is the Wife’s evidence that she does not currently have the resources to have the necessary repairs completed although a friend who is a carpenter has done some work for her in exchange for being able to stay in the premises from time to time.
- The Husband relies on his Affidavits sworn 18 September 2014,
26 September 2014 and 15 April 2015. The Husband also gave
viva voce evidence at the final hearing.
- The Husband also relies on the Affidavit of his brother Mr N sworn 12 April 2015. Mr N gave vive voce evidence at the final hearing.
- The Husband filed an Affidavit sworn 25 September 2015 by
Mr B in which Mr B, carpenter, deposes to having been hired by the Husband to undertake work at Property C for which he is still owed $5,000. Mr B gave viva voce evidence at the final hearing.
- The Wife does not dispute the evidence of Mr B and she proposes that orders be made that she be responsible to pay the $5,000 owing to
- The Wife relies on her Affidavits sworn 30 September 2014,
24 March 2014, 24 September 2014 and 13 April 2015 as well as her Financial Statement sworn 13 April 2015. The Wife also gave viva voce evidence at the final hearing.
- The Wife also relies on the Affidavits of Ms P sworn 24 October 2013 and Mr T sworn 24 March 2014. Both Ms P and Mr T’s Affidavits were filed in support of the Wife’s Application for Divorce and support the Wife’s evidence that the parties were separated under one roof from 1 July 2012. Ms P and Mr T gave viva voce evidence at the final hearing.
- The Wife also relies on the Affidavit of Mr G sworn 15 April 2015 referred to previously in this judgment. The Husband accepted Mr G’s evidence.
- Having read the material relied upon by the parties in these proceedings, heard and considered their proposals and heard the submissions made on their behalf, the Court identifies the issues requiring determination in this matter as follows:
- what was the date of separation;
- should the inheritance received by the Wife from the estate of her late mother be included in the pool of assets for division between the parties or should it be treated differently to the other assets for division between the parties;
- when determining the asset pool should the mortgage on
Property C be included as at the date of separation being $332,000 or at its current amount of $408,000 which includes the additional monies borrowed by the Wife after separation in breach of the Orders of the Court made 25 February 2014;
- should the Husband’s personal loan from Aussie Home Loans taken out by the Husband in 2011 without the consent or knowledge of the Wife be considered a joint debt of the parties;
- what should be the adjustment for the contributions made by the parties during the marriage and in particular:
- what should be the adjustment in the Wife’s favour given the parties’ assets are as a result of gifts from the Wife’s parents and her mother in particular;
- what should be the adjustment in the Wife’s favour given the parties lived in the Wife’s mother’s unencumbered home for the entirety of the relationship without paying rent and during which time the Wife’s mother paid all rates and utilities and purchased the parties’ groceries;
- what if any adjustment should be made in the Wife’s favour as a result of the Husband’s gambling during the relationship, his expenditure on wasted [business] products and his hoarding of same in the Property N property in particular;
- what if any adjustment should be made in the Husband’s favour for the restorations/renovations allegedly performed by him on Property C and Property N;
- what if any adjustment should be made for s.75(2) factors and in particular:
- the disparity in the parties’ earning capacities;
- the Wife’s primary care of the parties’ ten year old son [X] in circumstances where the Husband has only paid $530 in child support since separation and his payment of child support in the future is questionable;
- in the event the Court is of the view the Wife should retain the entirety of the estate of her late Mother, the benefit to the Wife of that inheritance;
- the requirement under s.75(2)(g) that the parties be afforded the opportunity for a reasonable standard of living.
- Section 79 of the Family Law Act 1975 (“the Act”) defines the Court’s powers in determining applications for property settlement. Section 79(2) of the Act provides that:
- <li “=””>
The Court shall not make an Order under this Section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.
- Section 79(4) of the Act sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters are:
- <li “=””>
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that lastmentioned property, whether or not that lastmentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
- <li “=””>
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
- <li “=””>
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
- <li “=””>
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
- <li “=””>
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
- <li “=””>
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
- The matters to be taken into account under section 75(2) of the Act are as follows:
- <li “=””>
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
- <li “=””>
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
- <li “=””>
(d) commitments of each of the parties that are necessary to enable the party to support:
- <li “=””>
(i) himself or herself; and
- <li “=””>
(ii) a child or another person that the party has a duty to maintain; and
- <li “=””>
(e) the responsibilities of either party to support any other person; and
- <li “=””>
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
- <li “=””>
(i) any law of the Commonwealth, of a State or Territory or of another country; or
- <li “=””>
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
- <li “=””>
and the rate of any such pension, allowance or benefit being paid to either party; and
- <li “=””>
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
- <li “=””>
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
- <li “=””>
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
- <li “=””>
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
- <li “=””>
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
- <li “=””>
(l) the need to protect a party who wishes to continue that party’s role as a parent; and
- <li “=””>
(m) if either party is cohabiting with another person–the financial circumstances relating to the cohabitation; and
- <li “=””>
(n) the terms of any order made or proposed to be made under section 79 in relation to:
- <li “=””>
(i) the property of the parties; or
- <li “=””>
(ii) vested bankruptcy property in relation to a bankrupt party; and
- <li “=””>
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
- <li “=””>
(i) a party to the marriage; or
- <li “=””>
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
- <li “=””>
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
- <li “=””>
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
- <li “=””>
(na) any child support under the Child Support (Assessment) Act 1989that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
- <li “=””>
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
- <li “=””>
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
- <li “=””>
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
- The High Court in the matter of Stanford v Stanford  HCA 52 held that prior to making orders for the division of the property in which the parties have an equitable interest in accordance with the provisions of section 79 of the Family Law Act 1975 (“the Act”), the Court must first determine that is just and equitable that the Court make such orders.
- The High Court in Stanford held that in the majority of matters the decision as to whether it is just and equitable for the court to make property orders is easily resolved by the breakdown of the marital relationship and the mutual desire of both parties for orders altering their respective property interests.
- This is such a matter, and thus it is apparent it is just and equitable that orders be made adjusting property matters between the parties.
- Prior to the declaration in Stanford (supra), a trial judge would follow the four step approach in determining how to alter property interests between the parties as articulated by the Full Court in Hickey and Hickey and Attorney General for the Commonwealth of Australia  FamCA 395.
- The four step process set out in Hickey is as follows. Firstly, the Court will determine the nature of the property pool and attribute valuations. Secondly, the Court considers the contributions of the parties to the property pool including direct and indirect financial contributions and non-financial contributions often in the form of homemaker or parent. Thirdly, and after considering entitlements based on contributions the Court determines whether any further adjustments to either parties entitlement is proper, given the considerations under s.75(2) of the Act. Finally, the Court stands back and considers whether the proposed division of the property is just and equitable pursuant to section 79(2) of the Act.
- The High Court in Stanford (supra) and subsequently the Full Court in Bevan and Bevan  FamCAFC 116 observed that this four step approach should not be rigidly followed.
- However, the Full Court in Bevan (supra) also indicated that in the majority of property cases, the four step approach is an appropriate manner in which to approach the determination of the division of properties between parties once the Court is satisfied that such division is just and equitable.
- I am satisfied that this is a matter where the four step approach of Hickey is the appropriate approach to be taken to determine a just and equitable division of property between the parties.
When did the parties separate?
- It is the Husband’s evidence that the parties did not separate until he left the Wife’s mother’s property on 1 August 2013.
- Whilst conceding that there were major difficulties in the marital relationship for many months leading up to the date of separation and that he had been sleeping on a mattress in the lounge room for a very long period of time before 1 August 2013, it is the Husband’s evidence the parties did not decide their relationship was at an end until the parties physically separated on 1 August 2013.
- It is the Husband’s evidence that between September and
December 2012 he, as well as the Wife on two occasions attended upon Ms C, psychologist, for relationship counselling. It is the Husband’s evidence that during the counselling it was agreed that in order for the parties relationship to be repaired, he was to complete the renovations on Property C.
- The Husband also submits that if he and the Wife had separated on
1 July 2012 as is the Wife’s evidence, she would not have made a new Will or Enduring Power of Attorney naming him as one of the Executors and beneficiaries of her estate. and one of her Attorneys.
- It is the Wife’s evidence that she and the Husband separated under the one roof on 1 July 2012 after a considerable period of unhappiness in the marriage.
- It is the Wife’s evidence that the Husband had been sleeping on a mattress in the lounge room for a considerable period of time before
1 July 2012.
- It is the Mother’s evidence that she had become more and more frustrated with the Husband’s failure to complete any of the restoration works on Property C and Property N and that she made the decision on 1 July 2012 that there was no future in her relationship with the Husband.
- It is the Wife’s evidence that she told the Husband of this decision on
1 July 2012. It is the Wife’s evidence she also told her Mother, her friend’s Ms P, Mr T and Ms H of the breakdown of the parties’ marriage at this time.
- In the affidavit sworn by Ms P on 24 October 2013 and in her oral evidence, Ms P confirmed she was advised by the Wife of the separation of the parties under the one roof on or about 1 July 2012.
- In the affidavit of Mr T sworn 24 March 2014, Mr T deposes that from October 2012 onwards he had many conversations with the Husband, both on the phone and personally, in which the Husband discussed with him the unhappiness in his marriage and that he and the Wife were not sleeping together.
- Both Ms P and Mr T deposed that from their interactions with the parties, neither the Husband nor the Wife were seen socially with each other after 1 July 2012.
- The contemporaneous clinical notes of Ms C that were taken during her counselling sessions with the Husband were placed before the Court by way of Subpoena. Those notes indicate the level of distress the Husband was experiencing as a result of the breakdown of his relationship with the Wife. The notes refer to the Husband telling Ms C that the parties were separated under the one roof as well as the necessity for the Husband to complete renovations of Property C before reconciliation could be considered.
- In the affidavit of Mr N sworn 12 April 2015, Mr N deposes to the parties and their son [X] attending at the house of his then Wife and himself for Christmas 2012. It is Mr N’s evidence that the atmosphere between the parties was very tense and that there was a lengthy discussion about the difficulties in the parties’ relationship.
- It is the Wife’s evidence that because of their separation, when her Mother died the Husband was not asked to sit with her or greet any of the people who were offering condolences at the funeral.
- It is the Wife’s further evidence that when she was admitted to hospital in February 2013 following her diagnosis of breast cancer, the Husband was not asked to nor did he visit her when she was in hospital undergoing surgery.
- The Wife was asked why she had made a new Will and Enduring Power of Attorney naming the Husband as executor beneficiary and attorney in September 2012 if she and the Husband had separated on
1 July 2012.
- The Wife explained that her Mother’s cancer and serious illness had caused her to be concerned about her own mortality and in those circumstances she was motivated to make a Will that would ensure that her son [X] would be properly looked after and that the Husband would have the necessary financial means to do so.
- Having considered the evidence of the parties, the independent evidence of Ms P, Mr T and Mr N as well as the notes of the psychologist Ms C, I am satisfied that the parties separated under the one roof on 1 July 2012.
Assets and Liabilities
The Wife’s inheritance from her late Mother’s estate
- There is no doubt that the inheritance received by the Wife shortly after separation is property for the purposes of the Act.
- The question arises however as to how that property should be treated.
- It is submitted on behalf of the Wife that in circumstances where the property was received after separation and where the husband made absolutely no contribution to that property, it should be excluded from the pool of assets available for distribution between the parties.
- Counsel for the Wife referred the Court to the case of In the Marriage of Bonnici  FamCA 86 in which the Full Court was dealing with a matter where the Husband inherited approximately $350,000 shortly prior to the parties’ separation. At paragraphs 43 and 44 the Full Court held:
 A property does not fall into a protected category merely because it is an inheritance. On the other hand, if there are ample funds from which an appropriate property settlement can be made and a just result arrived at, then the fact of a recently acquired inheritance would normally be treated as an entitlement of the party in question.
 The other party cannot be regarded as contributing significantly to an inheritance received very late in the relationship and certainly not after it has terminated, except in very unusual circumstances. Such circumstances might be include the care of the testator prior to death by the Husband or Wife as the case may be or other particular services to protect the property. See James& James (1978) FLC 90-487
- The Full Court noted in paragraph 46 of Bonnici (supra) that the global approach taken by the trial judge in the presented considerable difficulties when dealing with the matter and that if the matter had been approached on an asset by asset basis the task of both the trial judge and the Full Court would have been a simpler one.
- Counsel for the Husband referred the Court to the decision of
Justice Cronin in the matter of Verley (No.2) (supra).
- In Verley (No.2) the parties had been married for 25 years. The matrimonial assets consisted of farming land which was owned by the Husband at the commencement of the relationship. At the time of separation or shortly thereafter, the Husband’s father died and the Husband inherited an interest in further farming property that had been owned by his father and had been farmed by the parties and the paternal family in a partnership for the entirety of the relationship.
- When considering whether the inherited property should form part of the pool of assets for divisions between the parties His Honour held at paragraph 55 as follows:
 As the Full Court said in Bonnici (1992) FLC 92-272, 15 Fam LR 138 a property does not fall into any protected category merely because it is received in an inheritance. The Full Court said that the person who was not the recipient of the inheritance could not be regarded as contributing significantly to an inheritance received very late in the relationship except in very unusual circumstances. They highlighted the circumstances including the care of the particular testator prior to that person’s death or particular services to protect a property. That was the situation in James and James (1978) FLC 90-487. In my view, this situation is akin to the James situation where I find that there was not only an expectation on the part of the husband but also that the wife expected that the husband would receive the land and the parties diligently maintained the partnership and worked all of the land as a consequence of that expectation. Unlike the Bonnici case, this inheritance although received very late in the marriage if not after separation under the one roof, the parties had always treated the land as their own at least for income purposes. I find on the evidence that the parties did not discern between one partner’s ownership of the land and another. Accordingly, all of that land must be included in the pool and becomes a matter for the purposes of assessment, a contribution issue.
- It is submitted on behalf of the Husband that this is a matter that falls in the category of “usual circumstances” discussed by the Full Court in Bonnici, such that the Wife’s inheritance should be included in the pool of assets for division between the parties.
- It is submitted on behalf of the Husband that he and the Wife lived in the Wife’s mother property for the entirety of the relationship during which period they contributed to its upkeep and maintenance.
- It is submitted on behalf of the Husband that he assisted in the care of the Wife’s mother including doing her [skill omitted] and visiting her in hospital when she was dying.
- In his trial affidavit sworn 26 September 2014 the Husband sets out the maintenance he claims to have undertaken on Property B. He deposes to maintaining the garden at the Mother’s home, building a fence and effecting repairs around the house.
- In cross-examination, it became apparent that the extent of the Husband’s gardening was to occasionally mow the lawns. The fence that was built was actually built by contractors and the extent of the repairs that he assisted with was to locate 47 tiles that matched some existing tiles.
- The Husband agreed that for the entirety of the relationship he and the Wife were not required to pay any rent to live in the Wife’s mother’s property and that the Wife’s mother paid all of the outgoings on the property as well as buying the parties weekly groceries.
- In relation to the Husband’s claim to having cared for the Wife’s mother, it is his evidence that he would do the Wife’s mother’s [skill omitted] approximately once every three months and that he may have visited her up to 6 times whilst she was in hospital.
- The Husband also conceded, appropriately, that he had made no contributions whatsoever to the properties inherited by the Wife in Greece.
- This is not a matter which falls under the category of unusual circumstances referred to in Bonnici where a party can be seen to have contributed significantly to the inheritance received by a party late in the relationship.
- The Husband made no significant contributions to the Wife’s mother’s estate and if anything it was she who made significant contributions that assisted the Husband and the Wife.
- As such, I am satisfied that the appropriate approach in this matter is on an asset by asset basis and to consider the inheritance received by the Wife from her late Mother’s estate separately to the remaining assets of the parties.
How to treat to increase of the mortgage by the Wife post separation?
- The Full Court in Bevan (supra) discussed the common practice of trial Court’s making “notional add backs” to a property pool where an asset has been dissipated by one or other of the parties following separation and therefore arguably reducing the pool of assets available for distribution by the Court.
- As was pointed out by the High Court in Stanford (supra) the initial task for a trial judge is to determine the legal and equitable interest of the parties in property at the date of trial. It is for this reason that the concept of notional add-back has some difficulties. The Full Court
in Bevan therefore posited that rather than notionally adding back assets, the more appropriate way to deal with such matters is pursuant to s.75 (2)(o) of the Act.
- In this matter it is common ground that after separation and in breach of Interim Orders made by this Court on 25 February 2014, the Wife increased the level of encumbrance on Property B by $76,000.
- It is therefore submitted on behalf of the Husband that when determining the property pool the mortgage against Property B should be at its level at the date of separation being $332,000.
- It is submitted on behalf of the Wife that the current level of indebtedness should be allowed as the funds were primarily utilised by the Wife for the purposes of effecting the necessary repairs to the Property B and Property N properties which were caused by the unfinished renovations performed by the Husband during the relationship and in repaying monies borrowed by the Wife to meet the outgoings on those properties. The monies were also expended in the removal from the properties of the huge amounts of stock and other material that the Husband had “hoarded” in the properties during the relationship.
- In her viva voce the Wife corrected the evidence contained in her
trial affidavit where she had deposed that $21,568 of the monies borrowed by her post separation were used to repay a personal
loan taken out during the course of the marriage. In the
Wife’s viva voce evidence, she indicated that $21,568 was used
to discharge a personal loan taken out by her post separation with
the [omitted] Credit Unions. She provided the Court with the statements from the [omitted] Credit Union which confirmed this evidence.
- It is the Wife’s further evidence that approximately $20,000 of the
post separation personal loan from the [omitted] Credit Union was used by her in the payment of her legal fees.
- Given that a considerable proportion of the additional $76,000 borrowed by the Wife when she refinanced the loans over Property C were used for the necessary repairs and payment of monies relating to Property C and Property N, I am satisfied that in determining the pool of assets for distribution between the parties the current mortgage level should be used. However, appropriate consideration must be given pursuant to s.75(o) for the monies utilised by the Wife in the payment of her legal fees.
- It is the Husband’s evidence that in 2011 he obtained a personal loan from Aussie Home Loans in the sum of $30,000 without the knowledge or consent of the Wife.
- It is the Husband’s evidence that he utilised these monies to make “cash payments” to fund the work being done by him on Property N and Property C and therefore this loan should be considered a joint liability of the parties and that it should be paid from the parties joint assets before any distribution of property between the parties.
- The Husband provided no details as to what work was done or what items were purchased that required these “cash payments” to be made. The Husband provided no receipts or other independent documents in relation to the expenditure of this money that confirmed these funds were utilised in work carried out on either Property C or Property N.
- It is the Wife’s evidence that she had no knowledge of the Husband’s loan from Aussie Home Loans until the Husband filed his Affidavits in this matter. She challenges that these funds were used by the Husband for the work being done on Property N and Property C in 2011 and questions whether these monies were used for the Husband’s ongoing gambling.
- The Wife therefore submits that the loan from Aussie Home Loans is not a joint liability of the parties and argues that it should be considered to be the responsibility of the Husband.
- In the absence of any independent evidence from the Husband that these funds were utilised for the benefit of the parties and in circumstances where the Husband did not disclose to the Wife that he had taken out this loan, I cannot be satisfied that it is a joint debt and should be paid from the parties’ joint assets prior to there being any divisions of property between the parties.
- Whilst the parties were unable to agree as to the manner in which the property the parties have a real or equitable interest in should be dealt with by the Court, they were in agreement as to the value of the property.
- The list of assets and liabilities submitted on behalf of the Wife included the estimated values of $4,000 for the Wife’s car, $500 for the Husband’s car and a nominal amount of $10,000 for [omitted] stock and equipment in the Husband’s possession.
- I indicated in the course of the running of the matter that I did not believe that these items should be included in the pool of assets for division between the parties as the [omitted] products allegedly in the Husband’s possession are now past their use by date and worthless and the value of the parties old second hand motor vehicles are uncertain.
- The parties agree that the value of Property N is $1,050,000.00. It is also agreed that the work completed by the current tenant Mr G has increased the value of the property by $50,000.00.
- The Wife argues that as the value of Property N reflects work done by Mr G and not the parties, the value of Property N for the purposes of these proceedings should be $1,000,000. The Husband argues the appropriate figure to be used in the proceedings is the current value of the property.
- I agree with the Husband’s submissions in relation to the value of
Property N. It should be included at its current value and the increased value as a result of the tenant’s works is a matter to be considered in determining the division of property between the parties.
- In those circumstances the pool is as follows:
Matrimonial Assets and Liabilities
Property C $630,000
Less Mortgage to ANZ $408,000
Property in [V], Greece
Property in [M], Greece
(Wife has minority holding and cannot sell her interest)
Debt to Mr B
Wife’s Superannuation ([V])
Husband’s Superannuation (B)
The Wife’s Inheritance
25% interest in [V], Greece
6.5% interest in [M], Greece
National Bank Account of Greece Account
- It is common ground that the Property N property was gifted to the Wife by her parents.
- The Wife’s 75% interest in the property in [V], Greece was inherited by her from the estate of her late Father.
- The property in Property C was purchased by the Wife using the sum of $132,000 gifted to her by her Mother and otherwise by way of a bank loan from the Westpac Bank of $123,000.
- It is the Husband’s evidence that the monies from the Wife’s mother was given to both he and the Wife as an engagement present so they could buy a property that was to be their matrimonial home.
- I do not accept the Husband’s evidence on this matter. The money was given to the Wife before the parties were engaged. I am of the view the Wife’s mother gave the money to the Wife to be used by her to purchase Property C. It is noted that Property C was put into the Wife’s sole name at the time of purchase.
- At all times during the relationship the mortgage and various loans secured against Property C were paid by the Wife from her income as a [omitted] with no contribution by the Husband.
- It is submitted on behalf of the Husband that he has made a considerable contribution to both the Property N and Property C properties as a result of the renovation and restorations undertaken by him throughout the relationship.
- This matter was initially listed for final hearing in September 2014 but was unable to be reached on that day and the matter had to be adjourned. Given that a major lynchpin to the Husband’s case is his argument that his work on the properties at Property B and Property N had considerably increase their value, the Husband was afforded the opportunity to file expert evidence that supported his contention as to the increased value of these properties as a result of his endeavours.
- The Husband instructed Mr S, Certified Practicing Valuer, to undertake valuations of the properties. In the letter of instruction provided to
Mr S by the Husband’s solicitors, Mr S was specifically asked to provide his opinion as to the value of and the prospect of leasing the properties without the renovations that Husband claimed to have made in relation to these properties.
- Mr S completed his valuations. In his valuations Mr S did not address the question of the value and prospects of leasing the properties without the renovations having been conducted.
- It is submitted on behalf of the Wife that it is open to the Court to conclude that Mr S did not address this question of any increase in the values of the properties because the Husband’s restoration did not increase the value of the properties.
- It is submitted on behalf of the Wife that the restoration and renovations that were undertaken by the Husband were never completed. It is her further evidence that after the parties separated she had to expend considerable monies, firstly to clean out both premises as they were chock-a-block full of the fixtures and fittings, outdated and second hand [omitted] supplies, building material and other detritus that had been stored and hoarded by the husband over the course of the relationship and to then have the renovations completed so that the properties could be rented out.
- The Wife placed before the Court photographs taken of the condition of Property C and Property N at or around the time of the separation Those photographs show the properties to be full of an inordinate amount of miscellaneous boxes, papers and other unknown items.
- Whilst the Husband denied in his affidavit material that he had hoarded a multitude of items in the two properties, the notes of his discussions with Ms C set out that the Husband told her that he did have a problem with hoarding. Further, when giving his viva voce evidence the Husband again conceded that he stored an enormous amount of materials in Property N and Property C as “he had nowhere else to put them.”
- Given the complete absence of any independent expert evidence that the works undertaken by the Husband added to the value of the properties at Property N and Property C, the evidence that the Husband failed to complete the renovations and restorations during the course of the relationship, the monies that had to be expended by the Wife post separation to complete the renovations and the undisputed evidence that the current tenant of the Property N property spent $100,000 so that retail aspect of that premises were usable, I find that the restoration and renovation work conducted by the Husband over the course of the relationship did not add any value to Property N and Property C and that his submissions suggesting that he made considerable contributions to those properties is not supported by the evidence.
- When the parties married in 2002 the Wife had a Westpac Classic account [omitted] (‘the Westpac Classic Account”) in her sole name. The Wife’s wages were paid into this account. All the drawdowns on the mortgage and loans taken out by the parties for the renovations to Property C and Property N were also paid into this account.
- Between January 2002 and July 2005 the only card to access this account was issued in the name of the Wife. The Husband had use of the Wife’s card to withdraw monies from the Westpac Classic account during this period.
- From July 2005 until January 2013 a separate card was issued to the Husband in his own name that enabled him to withdraw monies from the Westpac Classic Account.
- The Wife’s solicitor painstakingly went through the statements for the Westpac Classic Account for the period January 2002 to January 2013.
- The Wife’s solicitor produced to the Court a document headed Aide Memoire Unaccounted Cash Withdrawals Made by the Applicant Husband in 2002 to 2013 (‘the aide memoire’).
- In the aide memoire, the Wife’s solicitors set out that in the period between January 2002 and July 2005, what they termed “the first period”, there were cash withdrawals made by the Husband of $127,051.
- For the period July 2005 to January 2013, in what the Wife’s solicitors term “the second period”, there were cash withdrawals on the Husband’s card only of $165,225.90.
- It is the Wife’s evidence that she believes a large proportion of the money withdrawn by the Husband from the Westpac Classic Account between 2002 and 2013 was used by the Husband to gamble at the TAB.
- As paragraph 159 of the Husband’s affidavit sworn 29 September 2014, the Husband deposes as follows:
“I thought of betting as a way to make money for the work. I was betting at the TAB. Any money I made I put into the renovations. Most of the betting money came from my earnings from my job as a [omitted]. But some of it came from money allocated for the renovation. Overall I lost money from betting and I believe I could estimate accurately that my losses over a period of the six years 2006 to 2012 came to between $50,000 and $60,000.
- The Husband then states in paragraph 160 of his affidavit sworn
29 September 2014:
“What I did was wrong and I am very sorry for having done it.”
- The Husband was cross examined at length about his gambling.
- It is the Husband’s evidence that during the marriage he was working up to three nights a week as a [omitted] and was paid $100 per night cash in hand.
- It is the Husband’s evidence that between 2002 and 2005 he gambled on Saturday and Wednesday.
- It is the Husband’s evidence that he gambled between $200 and
$400 each time he attended the TAB. It is his further evidence that the major source of his gambling money was the money he earned as a [omitted].
- The Husband conceded however that he also took money from the Westpac Classic Account to gamble and agreed that perhaps half of the money that he took from the Westpac account in this period would have been utilised in gambling.
- In relation to the period July 2005 to January 2012 the Husband
agreed that he continued to gamble at the same rate that he
had between 2002 and 2005 and again conceded that he utilised
funds that he had withdrawn from the Westpac Classic Account to gamble.
- In the notes produced under subpoena from Ms C she recorded that the Husband told her he had wasted $100,000 gambling and buying stock.
- In his viva voce evidence the Husband confirmed that he believed he had wasted $100,000 of the parties’ assets in gambling and buying unwanted and now unusable stock.
- It is impossible to know precisely how much money the Husband lost gambling during the course of the relationship. However on his own evidence he gambled somewhere between $200,000 and $400,000 during the relationship. In this period he earned at best $150,000 “cash” as a [omitted].
- It is therefore apparent from the Husband’s evidence that more than half of the $212,000 that was borrowed by the parties for the restoration and renovation of Property N and Property C was used by the Husband to gamble.
- In the matter of Hamilton and Thomas  FamCAFC 8 the Full Court considered the manner in which the Wife’s gambling had been dealt with by the trial judge. The Full Court held at paragraph 34 and 35 as follows:
- We agree that gambling is for some people a form of entertainment and that a party can be no more criticised for spending money on it than the other party can be criticised for spending money on sporting or other forms of entertainment…
 Whilst their Honours then went on to say “however every case must depend on its’ own particular circumstances”, in our view, the circumstances of this case are apposite to the first observation, namely that for this family the gambling undertaken was no more than their normal form of entertainment and that the amounts involved were not so disproportionate as to, in our view, justify the trial judge in making any adjustment to the entitlements to the pool of assets of either of the parties.
- In paragraph 36 their Honours noted that the Wife’s losses were approximately $100 per week offset against the Husband’s losses which were unidentified. They also noted that it was part of the parties’ lifestyle to attend clubs on a regular and frequent basis.
- Their Honours then held at paragraph 37 as follows:
 In our view there was nothing so disproportionate in relation to the losses incurred by the parties in the lifestyle that they chose, that would make it appropriate for there to be an adjustment of the available capital upon the breakdown of the marriage. More is required than simply the existence of gambling losses. There needs in our view to be some element of wastage that is disproportionate to the positive contributions being made by each of the parties.
- In this matter it cannot be said that the Husband’s gambling is in any way proportionate to the parties’ lifestyle or proportionate to the contributions being made by the Husband during the course of the relationship.
- It is apparent from the Husband’s evidence that what little income he earned he spent on his gambling and that he otherwise made no financial contributions of any significance to assist in the living expenses of the parties or their son.
- Further, he expended up to $150,000 of monies that were meant to be utilised in the restoration and renovation of the assets of the parties on gambling.
- In these circumstances I am satisfied that it is only appropriate that there be an adjustment in the Wife’s favour as a result of the Husband’s gambling.
- Finally, it is submitted on behalf of the Wife that since separation she has been solely responsible for the care of the parties’ 10 year old son [X] both practically and financially.
- When these proceedings commenced, the Husband was seeking both parenting and property orders.
- On 11 September 2014 the parties entered into final parenting orders by consent. The orders provide for [X] to live with the Wife and for him to spend time with the Husband until such time as the Husband establishes accommodation in which the child has his own bedroom each Sunday from 12 noon to 4:00pm and upon the Husband obtaining suitable accommodation from 10:00am Saturday to 5:00pm Sunday each alternate weekend.
- The Husband is as yet to obtain accommodation which would enable [X] to have his own bedroom and as such he has own been spending limited day time only with his Father.
- Further, since separation the Husband has only paid a total of $530 in Child Support to the Mother.
- In these circumstances it is submitted on behalf of the Mother that she has made by far the greater contribution for the care and support of the parties’ son since separation.
- It is therefore submitted on behalf of the Wife that in all the circumstances of this case the Wife’s contributions to the parties’ assets is 90% and the Husband’s contribution is 10%.
- In this matter the totality of the parties’ assets are as a direct result of the contributions made by the Wife’s family.
- During the course of the relationship the Husband devoted an extraordinary amount of his time in an endeavour to restore and renovate the properties at Property C and Property N.
- The reality is however that all his efforts in this regard have not resulted in any increase in the value of these properties and his failure to complete the works quickly and efficiently prevented Property C and Property N from generating rental income that would have been of benefit to the parties.
- At the end of the relationship the Wife was required to expend additional monies to bring the properties into a condition that would enable them to be rented out. In relation to the Property N property, the current tenant spent $100,000 to bring the property into the condition where he could use it for the conduct of his [omitted] business.
- During the course of the marriage the Husband gambled up to $250,000 at the TAB utilising the monies he earned working part time as a [omitted] and monies that the parties had borrowed which were meant to be used to fund the renovation and restoration of the properties.
- In these circumstances I am in agreement with the submissions made on behalf of the Wife and am of the view that the Wife’s contribution to the matrimonial assets should be considered at 90% and the contributions of the Husband considered at 10 %.
- For reasons previously set out in this judgment, I have determined that it is appropriate that the Wife’s inheritance from her late Mother’s estate should be dealt with separately to the matrimonial assets.
- It is submitted on behalf of the Husband that he made a contribution to the Wife’s late mother’s property at Property B through his maintenance of that property.
- As has previously been set out in this judgment, the testing of the Husband’s evidence in this regard revealed that the maintenance and renovations performed by him in the eleven and a half years that he lived in the property were minimal and that in fact it was he who was the beneficiary of the Wife’s mother’s largesse for the entirety of the relationship.
- In these circumstances I am satisfied that the Husband has made no contribution to the Wife’s inheritance from her late mother’s estate.
- I am also satisfied that the retention by the Wife of the entirety of her inheritance can be properly addressed in the adjustment of the matrimonial assets as between the parties.
Section 75(2) Factors
- As has been set out previously in this judgment after separation the Wife re-financed the mortgage on the Property C property and extended that mortgage by a further $76,000. It is the Wife’s evidence that other than $20,000 used by her for her legal costs the balance of these monies were used to help fund the completion of the renovations on Property N and Property C and to repay monies borrowed by her to meet the outgoings on those properties.
- In those circumstances the money expended by the wife on her legal fees will be a factor to be considered pursuant to s.75(o). Otherwise I am satisfied these monies were used by her in relation to the parties matrimonial assets.
- It is submitted on behalf of the Husband that there should be an adjustment pursuant to s.75 (2) factors on the basis that his earning capacity is less than that of the Wife.
- The Wife is able to earn between $70,000 and $80,000 as a [omitted]. It is the Husband’s evidence that at best he able to earn $45,000 a year as a [omitted] and this will only be so when he has properly re-engaged with his profession. He has not worked as a [omitted] for the majority of the parties’ relationship.
- It is further submitted on behalf of the Husband that in addition to the income the wife earns as a [omitted], she also has the benefit of considerable rental income from Property N and from Property C. The Wife also has the benefit of the rental from the property in [V], Greece. This property is used as a [business omitted] and has been earning rental income for the maternal family for nearly 30 years, albeit it is the Wife’s evidence that no rental for this property has been received in recent times because of the current crisis in Greece.
- The Wife has the benefit of in excess of $2,000,000 of real estate whilst the Husband currently owns a motor vehicle worth perhaps $500.00 and is otherwise to all extents and purposes, homeless.
- It is submitted on behalf of the Husband that s.75(2)(g) requires that there should be a property settlement that enables the Husband to obtain a standard of living that in all the circumstances is reasonable. It is submitted that given the parties eleven and a half year marriage and the current disparity in their financial circumstances, the Wife’s proposal that he receive $120,000 is clearly inadequate and will not enable him to obtain a reasonable standard of living, especially compared to that of the Wife.
- It is submitted on behalf of the Wife that there should be no adjustment made for s.75(2) factors.
- It is submitted on behalf of the Wife that whilst the Wife currently has a superior earning capacity to that of the Husband, the Husband is a well-qualified [omitted] and is not prevented from working fulltime as a [omitted] enhancing his reputation and therefore increasing his current earnings.
- It is further submitted on behalf of the Wife that it is she who has the primary care of the parties’ 10 old son [X] and that she will continue to do so into the future. It is her evidence that to date she has received almost no child support from the Husband to assist in [X]’s care and that the Court can have no confidence that the Husband will pay Child Support for [X] into the future.
- It is submitted on behalf of the Wife that whilst her financial position and assets are superior to that of the Husband, particularly given the Court’s findings that she retain the property inherited by her from her late Mother’s estate, this is off-set by her responsibilities to care for [X] into the future.
- Given the disparity in the parties’ current earning capacity and in particular, the very large disparity in relation to the parties’ respective financial resources and the monies spent by the Wife on her legal fees, I am of the view that there should be an adjustment of 17.5 % in the Husband’s favour pursuant to s.75(2).
- There should be an adjustment in the Wife’s favour arising from her responsibilities for the primary care of the parties’ 10 year old son. I am of the view that there should be an adjustment in the Wife’s favour in relation to 75(2) factors of 5 %.
- I have therefore determined that the adjustment pursuant to s.75(2) should be 12.5 % in the Husband’s favour.
- As can be seen, I have determined that the matrimonial assets exclusive of the Wife’s inheritance from her late Mother’s estate should be divided such that the Wife retain 77.5 % of same and the Husband retain 22.5 % of same, which means the Husband is to receive the sum of $303,300.00
- It is unknown whether the Wife wishes to retain all the properties currently registered in her name and borrow the requisite funds to pay out the Husband or whether she wishes to sell Property C in an endeavour to raise the majority of these funds to pay the Husband. It is also unknown whether the Husband wishes to take a transfer of the Property C property subject to the mortgage as part of the property settlement if the Wife does not want to retain Property C. This would, of course be subject to him being able to refinance the mortgage into his name.
- In these circumstances, and somewhat unusually, I will not pronounce final orders but rather give the parties the opportunity to advise the Court how the decision of the Court is to be effected once they have considered the outcome.
- I also note that the parties have agreed that there be a superannuation splitting order made which equalises the parties’ current superannuation entitlement. This would require an order that from the Wife’s current superannuation entitlements a base amount of $47,402 be adjusted in the Husband’s favour.
- Pleasingly, the Wife’s superannuation fund has been afforded procedural fairness and accordingly final orders can be made that reflects that adjustment.