Essa & Azghar [2024] – Two-Pool Approach in Family Law Property Division with Notional Add-Backs

JUDGE MURDOCH

INTRODUCTION

1. These are proceedings commenced by the husband for the alteration of the parties’ property interests pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
2. The parties were married in 2008 and separated on a final basis in February 2020. They are not yet divorced. There are two children of the relationship who are currently aged 14 and 9 years of age. Pursuant to the final parenting orders made by consent on 5 October 2022 the children live with the wife and spend time with the husband for five nights each fortnight during the school term and for one half of all school holiday periods.
3. The husband and wife each have a child from a prior relationship. The husband’s adult son lives in Country D. He did not live with the parties during the relationship. The wife’s daughter who is now twenty years of age lived with the parties throughout the marriage.
4. Substantial issue exists between the parties as to the nature and composition of the property pool with the wife contending that there should be significant notional add backs to the pool of property to be adjusted between the parties. For determination is also the assessment of the parties’ respective contributions, the extent to which such contribution finding ought to be adjusted pursuant to s79(4) of the Act and significantly, whether the wife’s entitlement to property is to be satisfied from the currently available non-superannuation property or whether the husband’s superannuation entitlement should be the subject of a splitting order.

MATERIAL RELIED UPON

5. A direction was made at the commencement of the hearing that no annexures to affidavits or exhibited documents would be read in the matter until they were individually tendered.
6. The husband relied upon the:
   • Amended Initiating Application filed 16 February 2023;
   • Case Outline filed 15 June 2023;
   • Affidavit of the husband filed 12 May 2023;
   • Financial Statement filed 16 February 2023;
   • Financial Questionnaire filed 22 March 2022;
   • Undertaking as to Disclosure filed 14 April 2022; and
   • Material tendered throughout the course of the hearing.
7. The wife relied upon the:
   • Amended Response filed 27 January 2023;
   • Case Outline filed 30 November 2023;
   • Affidavit of the wife filed 22 May 2023;
   • Affidavit of single expert filed 8 May 2023;
   • Financial Statement filed 10 March 2023; and
   • Material tendered throughout the course of the hearing.
8. In accordance with the court’s directions, the parties prepared a joint Draft Balance Sheet.^[1]

BACKGROUND

9. In these reasons a statement of fact is a finding of fact, unless it is obvious from the context that I am reciting the position of one of the parties. The standard of proof with respect to such findings is the balance of probabilities: see s 140 of the Evidence Act 1995 (Cth).
10. A brief uncontested background to this matter is as follows: –

THE COMPETING PROPOSALS

11. The husband seeks orders broadly that: –
    • The wife has the first option to retain the Suburb C property and is to notify the husband within 7 days of her exercising such option.
    • In the event the wife exercises her option to retain the property: –
      • Within 42 days the wife is to pay the husband the sum of $650,000;
      • The parties are to transfer the husband’s interest in the property to the wife; and
      • The wife is to refinance the loan secured by way of mortgage over the property into her sole name.
    • In the event the wife does not exercise her option to retain the property the husband has the option to retain the property.
    • In the event the husband exercises his option to retain the property: –
      • The husband is to pay the wife the sum of $381,250;
      • The parties are to transfer the wife’s interest in the property to the husband; and
      • The husband is to refinance the loan secured by way of mortgage over the property into his sole name.
    • In the event neither party exercises their option to retain the property the property is to be sold and after payment of any outstanding utilities, costs of sale and discharge of the loan secured by way or mortgage over the property, the remainder is to be disbursed: –
      • In payment of 55% of the balance to the husband;
      • In payment to the husband the sum of $82,800; and
      • In payment of the balance remaining to the wife.
    • The parties’ joint bank accounts are to be closed and the balances remaining are to be divided equally.
    • There be a superannuation splitting order affecting the husband’s interest in his superannuation fund so that the wife is allocated a base sum of $118,775.03.
    • Each party otherwise retain all assets, liabilities and financial resources held in their name.
12. Whilst the husband submitted that the wife has no capacity to refinance the Suburb C property into her name and pay to him the appropriate adjustment, no application was made to formally amend the relief sought by him. I have thus proceeded on the basis that the husband seeks the relief sought as set out above.
13. The wife’s proposed minute of order tendered on the last day of the hearing sought orders broadly that: –
    • The wife be given 14 days to exercise her option to retain the Suburb C property.
    • In the event the wife exercises her option to retain the property: –
      • Within 42 days the wife is to pay to the husband a sum that will effect the husband receiving 35% of the total property pool;
      • The parties are to transfer the husband’s interest in the property to the wife; and
      • The wife is to refinance the loan secured by way of mortgage over the property into her sole name with the costs of such refinance to be shared equally.
    • In the event the wife does not exercise her option to retain the property the husband has the option to retain the property.
    • In the event the husband exercises his option to retain the property: –
      • Within 42 days the husband is to pay to the wife a sum that will effect an adjustment to the wife of 65% of the total property pool;
      • The parties are to transfer the wife’s interest in the property to the husband; and
      • The husband is to refinance the loan secured by way of mortgage over the property into his sole name with the costs of such refinance to be shared equally.
    • In the event neither party exercises their option to retain the property the property is to be sold and after payment of any outstanding utilities, costs of sale and discharge of the loan secured by way or mortgage over the property, the remainder is to be disbursed: –
      • In payment of the sum required to effect the wife receiving 65% of the total property pool; and
      • In payment of the balance remaining to the husband.
      • In payment to the husband the sum of $82,800; and
      • In payment of the balance remaining to the wife.
    • The parties’ joint bank accounts are to be closed and the balances remaining are to be divided equally.
    • There be a superannuation splitting order affecting the husband’s interest in his superannuation fund so that the wife is allocated a base sum of 65% of the total property pool.
    • That each party otherwise retain all assets, liabilities and financial resources held in their name.
14. The wife made it very clear in her evidence and submissions to the court that she seeks an outcome that will allow her to retain the former matrimonial home. The wife asserts that she would be unable to rehouse herself and the children in the same area or with the same level of amenities should she not be able to retain the home. She further deposes that a change in routine would disturb X’s development.^[2] The wife deposes that case managers from the NDIS have attended the former matrimonial home and deemed it as a suitable place of residence and a safe environment for X.^[3]
15. During the course of final submissions the wife advised the court and the husband that, notwithstanding the relief sought by her on the last day of the final hearing, she now seeks that there be no adjustment made to the parties’ respective superannuation interests so that she will be required to pay to the husband a lesser cash sum to retain the former matrimonial home.

THE ISSUES FOR DETERMINATION

16. There is significant dispute between the parties as to the constitution of the pool of property and liabilities to be adjusted between them. A significant number of items are sought to be notionally “added back” to the balance sheet comprising the property of the parties to be adjusted.
17. The issues requiring determination are as follows:
    • The assessment of the parties’ respective initial, ongoing and post-separation contributions pursuant to section 79 of the Act;
    • The items sought to be notionally “added back” to the balance sheet;
    • Whether the husband has discharged his obligation to provide full and frank disclosure;
    • The assessment of the wife’s future needs within the meaning of section 75(2) of the Act; and
    • What division of property is just and equitable in the circumstances including whether the wife’s ultimate entitlement ought to be satisfied from the currently available non-superannuation property so as to provide her with the opportunity to remain living with the children of the relationship in the former matrimonial home.

MATERIAL RELIED UPON

18. A direction was made at the commencement of the hearing that no annexures to affidavits or exhibited documents would be read in the matter until they were individually tendered.
19. The husband relied upon the:
    • Amended Initiating Application filed 16 February 2023;
    • Case Outline filed 15 June 2023;
    • Affidavit of the husband filed 12 May 2023;
    • Financial Statement filed 16 February 2023;
    • Financial Questionnaire filed 22 March 2022;
    • Undertaking as to Disclosure filed 14 April 2022; and
    • Material tendered throughout the course of the hearing.
20. The wife relied upon the:
    • Amended Response filed 27 January 2023;
    • Case Outline filed 30 November 2023;
    • Affidavit of the wife filed 22 May 2023;
    • Affidavit of single expert filed 8 May 2023;
    • Financial Statement filed 10 March 2023; and
    • Material tendered throughout the course of the hearing.
21. In accordance with the court’s directions, the parties prepared a joint Draft Balance Sheet.^[4]

THE STATUTORY REGIME

22. I should only make orders pursuant to s 79 of the Act if I am first satisfied that it is just and equitable to do so. It must not be assumed that the parties’ rights or interests should be different to that which already exists: Stanford & Stanford [2012] HCA 52; (2012) FLC 93-518 (“Stanford”).
23. In determining claims for alteration of property interests pursuant to s 79, I am required to:

(a) Make findings as to the identity and value of the property, liabilities, and financial resources of the parties, or either of them, at the time of the hearing and determine the legal and equitable interests of the parties in such property;(b) Consider, identify and assess the contributions by the parties to the acquisition, conservation and/or improvement of their property, including financial and non-financial contributions and any contributions to the welfare of the family before, during and after the relationship came to an end;

(c) After consideration of altering the interests in the property pool on the basis of contributions, to consider whether there should be any further adjustment to either of the parties on account of the matters set out in s 79(4) (d)-(g) of the Act, including any relevant considerations pursuant to s 75(2) of the Act; and

(d) Ensure that the orders to be made are just and equitable in all the circumstances.

DISCLOSURE

24. The wife maintained a “global submission” that the husband has not provided disclosure as to his true financial position, in particular his overseas accounts and Pension benefits. The wife asserts that, other than those identified in cross examination, the husband has not made the wife aware as to his true financial position at the commencement of the relationship. The wife submits that the husband’s evidence in relation to his financial affairs was at times deliberately vague and unbelievable. The wife highlighted to ground such a finding that the husband has held 47 bank accounts in 13 overseas institutions, and he has conceded that bank statements were not available for a number of his accounts.
25. In addition to this global submission the wife seeks that various sums of money and items of property be notionally added back to the property pool available for distribution between the parties and credited against the husband’s entitlement to existing property. These specific items will be dealt with individually below.
26. I had the opportunity to carefully observe the husband during the course of his cross examination. It is the husband’s evidence that he has disclosed all of his relevant financial circumstances to the best of his ability, readily conceding that he was unable to produce some bank statements for his overseas bank accounts. He was unshaken in his evidence that he “absolutely” has not transferred money in or out of his accounts and to overseas destinations to hide them from the wife.
27. I accept that it is not unreasonable for the husband to be unable to produce all of his bank statements for accounts that were held overseas, some fifteen years ago. I do not accept that the husband having held a significant number of accounts in varying financial institutions nor being able to account for each and every historical transaction over a fifteen-year period grounds a finding that the husband has not provided disclosure as to his true financial position or evidences an intention to hide assets.
28. I am not satisfied that the wife has established to the required requisite degree that the husband has deliberately failed to provide financial disclosure or an intention on behalf of the husband to hide assets such that I should not be unduly cautious in making findings in the wife’s favour.^[5] I am satisfied and find that, whilst not optimal, the husband has discharged his disclosure obligations to the best of his ability.

THE BALANCE SHEET

29. Grounded from the draft Joint Balance Sheet and the concessions made by the parties during the hearing I have constructed the balance sheet comprising the property of the parties to be adjusted as follows. The disputed items and their asserted values are in bold font. I have rounded figures to the nearest dollar value.

BALANCE SHEET FINDINGS

Items 22 to 27: Notional Add Backs

30. The husband seeks that a total of $96,000 be notionally added back to the property of the parties and credited against the wife’s entitlement to existing property.
31. The wife seeks that a total of $323,320 be notionally added back and credited against the husband’s entitlement to existing property.
32. The Full Court in AJO & GRO [2005] FamCA 195, identified three clear categories where it may be appropriate to notionally add back an item of expenditure:
    • where the parties have expended money on legal fees;
    • where there has been a premature distribution of matrimonial assets;
    • where there has been a waste, reckless, negligent or wanton dissipation of assets as outlined by Baker J in Kowaliw and Kowaliw [1981] FamCA 70.
33. Notionally “adding back” items to the asset pool is a discretionary exercise which ought to be the exception rather than the rule.^[6] As stated by the Full Court in Trevi & Trevi [2018] FamCAFC 173 at [30]:

…When the discretion is exercised in favour of adding back, it reflects a decision that, exceptionally, in the particular circumstances of a case, justice and equity requires it. The second premise is its corollary: in cases that are not “exceptional” justice and equity can be achieved, not by adding back, but by the exercise of a different discretion — usually by taking up the same as a relevant s 75(2) factor. Indeed, it has been said that the latter is “a course which is, perhaps, technically more correct” than adding back to the list of existing interests in property.

(Footnotes omitted)

34. Parties are entitled to reasonably conduct their affairs post separation.^[7] Reasonably incurred expenditure usually does not come within the accepted categories of a notional add back.

Notional Add Backs Sought Against the Wife’s Entitlement to Existing Property

Items 22 and 23: Funds Transferred from CBA #…08 early 2021

35. Whilst not deposed to by the wife in her written evidence, it is uncontested that in early 2021 and late 2021 the wife caused the sums of $86,000 and $10,000 respectively to be transferred from an account held in her name to a bank account in the name of her daughter from a prior relationship, Ms G.^[8] Such monies were previously redrawn with the consent of the husband from the parties’ joint offset account and deposited into the wife’s own personal account.
36. The husband contends these sums should be notionally added back to the property of the parties and credited against the wife’s entitlement to existing property. The wife asserts that this sum should not be added back.
37. It was the wife’s written evidence that when the parties commenced living together she had savings in the sum of approximately $93,000, approximately $83,000 of which “I was saving as a trust for [Ms G].” ^[9] She deposes that prior to their marriage the parties had a conversation whereby the husband advised the wife that Ms G would not be receiving an inheritance from him. In response the wife advised him that she had savings put aside for Ms G and the husband agreed that in the event of their separation or her death, he would not take this money as he did not need it.
38. The husband readily conceded in cross examination that the parties are Muslim and pursuant to Islamic law Ms G would not inherit from the husband as he is not her biological father. He denied any conversation in which it was agreed that the wife’s savings of approximately $83,000 were for her daughter.
39. The wife conceded after lengthy cross examination that her savings at the commencement of cohabitation was no higher than $45,000 and that the balance of monies comprising the $83,000 that she transferred into the joint offset account in early 2010 could only have come from income earnt by her post cohabitation. I agree with the husband’s submission that the wife’s assertion that the sums were provided to her daughter as they had been held on trust by her since the commencement of the parties’ cohabitation must fail. The wife could not have been holding the sum of $96,000 on trust for her daughter at the commencement of the relationship as such funds did not exist at the time.
40. When confronted with this reality during cross examination the wife then asserted that the parties came to an agreement when they purchased the Suburb C property that the monies deposited by her into the joint offset account would be used to offset the interest on the mortgage and in the event of her death or divorce would “be returned to me for the sake of my daughter.” There is no written evidence of this new purported agreement. The wife has failed to establish to the requisite degree that there was such an agreement.
41. The wife’s daughter did not give evidence on her behalf. I am not satisfied the wife has met her evidentiary burden to ground a finding that her daughter did not give such evidence because she was afraid and was only prepared to attend court remotely in circumstances where such evidence was given by way of an explanation only in cross examination by the wife and no such application was ever made by the wife.
42. I am satisfied that these sums were a premature distribution of matrimonial assets as: –
    • The wife has not satisfied the court that the monies were held on trust for her daughter;
    • The monies provided to her daughter in any event exceed both the monies the wife had saved at the commencement of the relationship and throughout the relationship;
    • There is no evidence as to the receipt, use and application of such funds by the wife’s daughter.
43. These sums will be notionally added back to the property of the parties and credited against the wife’s entitlement to existing property.

Notional Add Backs Sought Against the Husband’s Entitlement to Existing Property

44. At the commencement of the hearing the wife contended that a cumulative value of $323,321.11 should be notionally added back to the balance sheet and credited against the husband’s entitlement to property. This sum arises from a series of transactions conducted by the husband during the parties’ cohabitation.

Item 24: Funds Transferred from S Bank totalling $112,842

45. The wife asserts that she had no access or knowledge of the balances or transactions associated with this account throughout the course of the marriage. The wife seeks that the sum of $112,842 should be notionally added back to the property pool available for adjustment as the husband has not provided an accounting of six withdrawals he undertook over the period mid-2010 to early 2012 which total 68,028.52 euros. In cross examination the wife accepted that this account was closed some time ago. She further accepted that she has not accounted for the monies held in her bank accounts since 2008.
46. These transactions occurred during the parties’ relationship over 14 years ago. I accept the submissions of the husband that is it not the function of the court to conduct an audit of the marriage or the relationship finances.^[10] These sums do not fall within any of the categories of add back as identified by authority. This item is rejected.

Item 25: U Company Shares: $75,711

47. The husband deposes that to the best of his knowledge, U Company was shut down before 2008 and he does not have any interest in this company not any entitlement to any benefits.^[11]
48. The wife asserts that she had no knowledge or access to this company throughout the course of the relationship and that the husband has failed to disclose the dealings of this company. The wife asserts that the sum of 50,000USD worth of shares purchased by the husband is unaccounted for and seeks that this sum be notionally added back to the property pool available for division.^[12]
49. After being shown documentary evidence in the course of her cross-examination the wife conceded that U Company was established as a business and the husband appointed a person to act on his behalf after it was established in 2006. The wife would not concede that the husband provided no investment toward the company but rather that the document shown to her merely “said that.” The wife accepted that the company was struck off the register of companies in early 2008 and that the husband has made enquiries with various services in Country U. I am unable to comprehend the wife’s contention that a financial entity that no longer exists or trades in any way could be classed as a notional add back. This item is rejected.

Item 26: Funds Transferred from D Bank #…76

50. The wife again asserts that she had no knowledge or access to transactions associated with this account. She makes a broad assertion in the draft Joint Balance Sheet that the husband has failed to provide disclosure “showing where the 30,040.36 euro held in his [D Bank] account [#…76] have gone.” In her oral evidence the wife deposed that the husband provided a statement that the account was “actually in 10,000-euro debt” but nonetheless asserted that the sum equivalent to 30,040.36 euro should be notionally added back to the asset pool as a result of the husband’s non-disclosure of such accounts.
51. It is the husband’s evidence that he has no recollection of the funds held in this account, nor how they were expended.
52. There is no evidence as to how the wife came to the figure sought to be added back by her, nor how and when such sum was allegedly spent by the husband. This item is rejected.

Item 27: Funds transferred from V Bank #…50

53. The wife asserts that she had no access to the husband’s V Bank account and that the husband has failed to disclose a series of withdrawals totalling the sum of $84,952.87 from this bank account. The wife in cross examination asserted that the basis of her position with respect to this addback was that the husband had given evidence that he transferred these funds into the offset and home loan account however he has not provided any evidence to prove such transaction.
54. The husband denies the wife’s assertions and deposes that he has provided full disclosure of all V Bank accounts which were previously held in his name.^[13]
55. There is no evidence as to how and when such monies were allegedly utilised by the husband. The wife has not met her evidentiary burden to establish that these transactions should be notionally added back to the asset pool. The item is rejected.

Conclusion as to Notional Add Backs Sought

56. The wife’s approach in requiring the husband to provide her with an audit of each and every dollar he has spent over the last 10 to 15 years consumed a significant proportion of the time required to hear this matter and is the same approach adopted by the wife in her Notice to Admit Facts dated 17 November 2023 where, for example, the wife lists five pages of cash withdrawals of the husband in sums ranging from $200 to $982.50 over a period of thirteen years. Such an approach is contrary to authority.^[14]

Contested liabilities

Items 33 & 34 – Monies loaned to the Wife

57. The wife asserts that the sum of $17,000 and $3,000 respectively should be liabilities attributed to her on the balance sheet. Such liabilities are transfers from family members of the wife for the purposes of “credit card and legal fees.”
58. The wife does not provide any particulars by way of her written evidence as to the purported loan agreement between herself and her mother and sibling.
59. The husband asserts that the value of such loans should be nil in circumstances where they have not appeared on prior balance sheets nor on the wife’s application to refinance the home loan secured against the Suburb C property in mid-2023.^[15]
60. The wife bears the evidentiary onus to establish on the evidence a credible foundation as to the existence of loans asserted by him to enable findings as to:

(a) whether there were agreements for loans as alleged;(b) if so, when were those agreements were made; and

(c) the terms of the loans.

61. She has failed to do so. In any event, allowing a liability arising to pay legal fees of these proceedings would be, in effect, to make the husband bear some responsibility for the wife’s legal fees. There is no evidence as to the apportioning of any alleged liability as to legal fees and credit card expenses in item 33. These items are rejected.

Financial Resources

Items 35: The Country D Pension Fund

62. The wife asserts that the husband has a financial resource being an unknown sum of money held in a Country D Pension fund. In support of such assertion the wife submits that it is difficult to believe the husband would have attributed a value to such pension fund if he genuinely felt there was no interest in such fund.
63. The husband deposes that at the commencement of cohabitation he held, amongst other things, “[Country D] Pension Policy in approximate present amount of $60,000.”^[16] The husband asserted that he has made multiple attempts to obtain documentation with respect to such pension fund. In the course of his cross-examination the husband’s position was that he is “not entitled to a pension in [Country D] in any way or shape.” The husband asserted that the fund does not have a balance – rather it is an aged pension fund in the event that he qualifies for it, and he does not so qualify.
64. In evidence is correspondence from a Mr Z of AB Company dated 21 June 2023 in response to an email from the husband as follows:

…It appears you have not made the necessary contribution to receive any pension payments when you reach your retirement age of 67 years because from the periods shown on page 5 of your letter dated 8 September 2022, it appears you have not contributed for the minimum period of 60 months…

The figures on page 3 of the letter show your remuneration for the relevant periods. These are figures on which the calculation of your contributions to the [Country D] pension fund are based and are comparable to OTE amounts used for the calculation of superannuation contributions. They do not amount to something like superannuation account balance.^[17]

65. Having regard to all of the evidence, I am not satisfied the wife has met her evidentiary burden to ground a finding that the Country D Pension Fund is a financial resource of the husband as asserted by the wife. It will be removed from the balance sheet.

Item 36: Long Service Leave

66. It is agreed that the husband has $45,776 in accrued annual leave entitlements with his current employer. ^[18] The wife asserts that the husband’s long service leave was accumulated during the parties’ marriage and the husband is at liberty to effectively “cash in” the value of such leave at any time to use at his disposal. The husband in oral evidence asserted that he is unable to capitalise his amount of long service leave and “cash it out.”
67. There is no evidence to ground a finding that there is a is a real likelihood that the husband will take a lump sum in lieu of his leave entitlements.^[19] It is not a financial resource if the husband merely intends to take a period of leave.^[20] This item is rejected.

Item 37: Frequent Flyer Points

68. The husband in cross-examination conceded he is a beneficiary of Frequent Flyer Points and they were accumulated during the relationship from work related travel and credit card use.
69. The wife asserts that the 660,405 frequent flyer points held by the husband should be attributed a value of $16,000 and be deemed a financial resource of the husband. There is no expert opinion evidence to ground a finding as to such value, or indeed any value at all.
70. The wife does not seek that there be an adjustment of such frequent flyer points in her favour, nor is there any evidence that such a transfer could occur.
71. The value of this item is rejected but this item will be taken into account pursuant to s75(2) of the Act.

Items 38 & 39 – Account ending #…44 and Digital Wallet

72. Prior to the commencement of final submissions, the wife conceded the value of the account ending #…44 and the husband’s Digital Wallet as being nil. These items will be removed from the balance sheet.

Conclusion and Findings as to the Balance Sheet

73. Accordingly, I find that the property pool consists of assets and liabilities, rounded to the nearest dollar, as follows: –

74. I find that the value of the parties’ non-superannuation property is $1,169,292.
75. I find that the value of the superannuation property is $461,501.
76. The total value of the non-superannuation property and superannuation property of the parties is $1,630,793.
77. The total value at law of property held by the husband prior to any adjusting order is $897,828.
78. The total value at law of property held by the wife prior to any adjusting order is $732,965.

WHETHER AN ORDER ALTERING PROPERTY INTERESTS SHOULD BE MADE

79. I should only make orders pursuant to s 79 of the Act if I am first satisfied that it is just and equitable to do so. It must not be assumed that the parties’ rights or interests should be different to that which already exists: Stanford & Stanford [2012] HCA 52 (“Stanford”).
80. I find that the requirements identified in Stanford are satisfied in this matter having regard to:
    • The parties in this matter, having married and mixed their finances as a family, have now separated. It is therefore not possible for them to continue to mutually enjoy the accumulated assets.
    • Both parties invoke s 79 of the Act seeking orders for property settlement.
    • The current legal interest of the parties needing to be changed or adjusted when consideration is given to the contribution and other factors identified below.
81. It is therefore just and equitable in all the circumstances to make orders pursuant to s 79 of the Act adjusting the financial interest of the parties.

THE ASSESSMENT OF CONTRIBUTIONS

82. The husband was 41 years of age at the commencement of cohabitation. He had recently immigrated from Country D to Australia and was employed with Company L earning an annual income of approximately $240,000. He deposed that at the commencement of cohabitation he had:
    • Cash in various bank accounts including:
      • 43,000 euros in an AC Bank Account;
      • 46,000 euros in an AD Bank Account;
      • 30,000 euros in a bank account in Country D; and
      • $80,000 in a V Bank Account.
    • A Country D pension policy in an approximate present amount of $60,000.
    • Australian superannuation of $12,518.84.
    • Motor Vehicle 1 purchased for $34,000 AUD.^[21]
83. The husband conceded during cross-examination that he held only the sum of $10,000 in his Australian V Bank Account but submits that the court can make a finding that at the commencement of cohabitation the husband otherwise had savings of $200,000 AUD grounded on the bank statements in evidence.^[22] The wife does not challenge the savings held by the husband at the commencement of cohabitation and I find that at the commencement of cohabitation the husband had savings of $200,000, superannuation of $12,519 and a motor vehicle. In light of my findings above as to the husband’s Country D pension policy this is not considered to be a contribution by him.
84. The wife deposed that at the commencement of the parties’ cohabitation she had:
    • Approximately $93,000 in savings (which she asserts as set out above were held for her eldest daughter);
    • Motor Vehicle 2 worth approximately $8,000;
    • furniture and personal effects; and
    • approximately $64,000 in superannuation.
85. Arising from the wife’s own concessions during cross examination I find that at the commencement of cohabitation the wife had savings of $45,000, superannuation entitlements of $23,000.00, a motor vehicle, furniture and personal effects.
86. Whilst the wife does not appear to dispute that the husband had savings of $200,000 at the commencement of cohabitation, she does not concede that such monies were applied to the benefit of the family as there is no documentary evidence to support the husband’s assertion in this regard. The wife however concedes that the husband funded the entirety of the deposit on the Suburb O property of $105,000 in 2009 – only a year after the parties’ commenced living together. The balance of the purchase of the Suburb O property was funded by way of mortgage with ANZ bank.^[23] The wife does not provide any evidence or make any submission as to how such deposit monies had been sourced by the husband. I am satisfied and find that the husband applied $105,000 of his savings to fund the deposit on the Suburb O property.
87. The wife further would not concede that the balance of savings held by the husband at the commencement of the parties’ cohabitation was applied towards the benefit of the family as there is no documentary evidence to ground such a finding. Somewhat paradoxically the wife at the same time sought that such funds be notionally added back to the property pool. The wife submits that I should be suspicious as to the application of such funds held by the husband at the commencement of cohabitation as the husband has disclosed as to having bank accounts in 15 institutions with over 45 accounts in his name. In those circumstances the wife submits that I could make a finding that the initial contributions of the parties were likely to be of a similar magnitude.
88. Again, it was the husband’s clear evidence that he was unable to obtain bank statements from overseas accounts dating back some 13-15 years. I have found above that this is reasonable in the circumstances. There is no evidence that the husband could have required the production of documents by an overseas financial institution.
89. The husband deposes that he applied his savings to the benefit of the family. He was unshaken as to this assertion in cross examination. On balance I am satisfied and find that the husband applied the savings held by him at the commencement of cohabitation to the welfare of the family; they were not secreted away and applied for his own purpose or hidden from the wife. I reject the wife’s submission that a finding could be made that the initial contributions of the parties were of similar magnitude.
90. The wife submits that the payment of her of $84,000 from her savings to the parties’ joint offset account in 2010 is a direct financial contribution by her. I reject this submission. Whilst the wife had savings of $45,000 at the commencement of cohabitation, the balance was accumulated by her during the parties’ relationship and thus both parties made contributions to it. I do accept that the wife transferred this sum into the mortgage facility, $45,000 of which was from her initial savings and as a result of the findings made above forms part of the cash monies to be notionally added back to the property pool.
91. Whilst the husband asserts that he made significant homemaker and parenting contributions, I cannot make such a finding grounded on the evidence. I am satisfied and find that for the most part the parties had different roles in the relationship. The wife was on maternity leave for two and a half years subsequent to the birth of M and the husband was the sole income earner of the household during this time earning approximately $230,000 annually. The wife returned from maternity leave in 2012 and commenced working two days a week.^[24] In 2014, following X’s birth, the mother did not return to the workforce until four and a half years later due to the additional care required for his special needs.^[25] Again during this time the husband was the sole income earner. I am thus satisfied and find that the wife was the primary carer of the children and homemaker, and the husband was the primary income earner and they each undertook these roles to the best of their respective abilities.
92. The wife asserts that the husband maintained a separate financial life outside of marriage and applied a significant portion of his financial resources to himself. The wife made complaint of two particular transactions in early 2017 wherein the husband redrew on the mortgage facility. After being taken through in detail the bank statements the wife ultimately conceded that the $53,000 redraw made on the Suburb O home loan account in early 2017 by the husband was used to make a payment towards the construction of the Suburb C property and I so find. She further conceded that the $18,170 redrawn in early 2017 was applied towards payment of the husband’s credit card debt and I so find. This credit card was used to pay for the family’s day to day living expenses and expenses on the construction of the Suburb C property.
93. Each of the parties submit that the court should consider the contributions made by each of them to the other party’s child from a prior relationship.^[26] It is uncontested that the wife’s eldest child from a prior relationship, Ms G lived with the parties during the parties’ cohabitation and for a period of 18 months when the parties continued to live under the same roof post separation. The husband paid for all expenses relating to Ms G save for her bedding, excursions, clothing including uniforms and textbooks. This included payment of Ms G’s private school fees for a period of four years and her costs when the family attended holidays to Queensland, Town AE and Melbourne.
94. The husband’s child lived in Country D during the parties’ relationship. It is uncontested that he lived with the parties for a period of 2 ½ months in 2014 and for a period of six weeks each year during the Country D school summer holidays. The husband concedes that monies removed by him from the parties’ joint account were provided by him for his son from time to time for support and payment of educational expenses.
95. It is uncontested that each of the parties or their family on their behalf contributed non-financially in relation to the maintenance and improvement of the properties and I accept and find that each party made non-financial contributions to the best of their respective abilities.
96. From February 2020 to October 2021 the parties were separated but continuing to live in the former matrimonial home. Between February 2020 and October 2020 the husband continued to solely meet the mortgage repayments in relation to the Suburb C property.^[27] From October 2020 until April 2022 the mortgage repayments were being met from the redraw facility. Thus during this period of time both parties had the benefit of occupation of the home and did not contribute to the loan repayments with respect to same. The husband vacated the property in October 2021 and from this time the wife had the benefit of occupation with her eldest daughter.
97. From April 2022 to October 2022 both parties contributed towards the mortgage. The wife asserts that she almost exclusively met the mortgage repayments from April 2022 onwards save for sporadic payments made by the husband in mid-2022. The husband asserts that the parties contributed equally during this period. I accept and find that the husband continued to make some mortgage payments during 2022 despite having vacated the home. There is no evidence to ground a finding that the husband was equally responsible during this period for such payments.
98. It is uncontested that the wife has been solely responsible for making the loan repayments on the Suburb C mortgage subsequent to October 2022.
99. In October 2022 the husband made a deposit of $4,500 to the Suburb C loan by mistake. The husband sent a text message to the wife on that same day stating “I made an incorrect transfer to the mortgage of $4,500. I need to pay for the lawyer and the credit card. I need you please to redraw it or approve the redraw.” The wife conceded in cross examination that she did not approve of the redraw requested by the husband and initially stated that the reason for her disagreement was that she did not know how to initiate a redraw. The wife eventually conceded that she understood how to approve a redraw requested by the husband as she had done so when $65,000 was paid to her in 2020 however, she still refused. When the wife was asked to provide a reason as to why she did not agree to the redraw her response was “no reason” and then “I didn’t want to redraw on our mortgage.”
100. It is uncontested that the husband has continued post separation to fund incidental expenses associated with the Suburb C property including the majority of the council and water rates, building and contents insurance and some subscriptions.^[28]
101. The husband was cross-examined in detail as to withdrawals made by him post-separation from the parties’ joint account ending …31. The husband’s concession during the course of such cross-examination that he withdrew the sum of $56,710 between the period October 2021 to May 2022 must be seen against the fact that the husband deposited into this joint account in the same period the sum of $71,228.
102. The wife’s contributions as homemaker and parent have continued post separation with the children living with her for nine nights a fortnight. The husband has also made contributions as homemaker and parent post separation with the children in his care for five nights a fortnight. The husband has maintained his obligation to support the children by way of child support payments in the sum of $1,717.33 each month.

The Approach Taken and Findings as to Contributions

103. The husband submits that contributions should be assessed as 60 percent to him and 40 percent in favour of the wife on the non-superannuation property and that there should be an equalisation of the parties’ superannuation interests.
104. In circumstances where it was clearly the wife’s ultimate aim that she be able to retain the former matrimonial home for herself and the children, she seeks that the assessment of the parties’ respective contributions occur to the non-superannuation and superannuation property as a whole. The wife seeks that there be no splitting of the husband’s superannuation entitlements so that she is required to pay to the husband a lesser sum to retain the former matrimonial home and seeks a contribution finding of 55 percent in her favour.
105. Whilst a global approach to the assessment of contributions is generally preferred this is a discretionary determination and particular circumstances may dictate that contributions to a particular asset or group of assets should be assessed separately.^[29]
106. I am satisfied that it is appropriate in this case to consider and evaluate contributions in two separate categories of property being the non-superannuation property and the superannuation property in circumstances where:
     • The husband seeks a superannuation splitting order;
     • the value of the superannuation property is a significant portion of the value of the property of the parties;
     • whilst each parties’ superannuation entitlements were nominal at the commencement of cohabitation, the wife’s superannuation entitlements were almost double that of the husband’s; and
     • there is an eleven-year age difference between the parties.
107. The Full Court in Horrigan & Horrigan [2020] FamCAFC 25 reinforced the holistic approach espoused in Fields & Smith [2015] FamCAFC 57 and stated that the proper approach to the assessment of contributions is:

…not a mathematical exercise, but rather involves the identification and assessment of all of the parties’ respective contributions, in a holistic way across the course of the relationship and in the post separation period to the point of assessment…

The Non-Superannuation Property

108. I find that the financial contributions of the husband at the commencement of cohabitation were superior to that of the wife and that the husband’s superior savings when regard is had to the use and application of those direct financial contributions enabled the parties’ acquisition of real property.^[30] Both parties worked hard and applied their best endeavours in their respective roles within the relationship. The wife was out of the work force for a period of seven years and she engaged in part time work to care for the children and maintain the household, thus enabling the husband to continue to earn a significant income. Both parties contributed both financially and non-financially to the eldest child of the other party. The husband has made superior financial contributions post separation, the wife superior non-financial contributions.
109. Adopting a holistic approach, I assess the parties’ contributions to the non-superannuation pool of property as 57.5% to the husband and 42.5% to the wife. Thus the husband will receive property to the value of $672,343 and $496,949 to the wife. By way of cross check, this is an additional adjustment to the husband of $175,395.

The Superannuation Property

110. Both parties’ superannuation entitlements at the commencement of cohabitation were nominal. The majority of the parties’ superannuation entitlements has accumulated since the parties commenced cohabitation. The wife’s parenting and homemaker contributions both throughout the relationship and post separation has enabled the husband to remain engaged in the paid workforce and his superannuation benefits are now worth more than three times that of the wife’s.
111. I am satisfied, again adopting a holistic approach that the parties’ contributions to the superannuation property pool are equal.

ADJUSTMENT TO THE CONTRIBUTION FINDINGS

112. The husband is currently 56 years of age. Whilst he reports suffering from medical conditions (all of which are regulated by medication), this has not affected his earning capacity.^[31] Both parties are presently engaged in gainful employment. There is inconsistent evidence as to the husband’s present annual income. The husband in his case outline submitted that he earns $230,000 each year before tax which is inclusive of a discretionary bonus. His Financial Statement filed 16 February 2023 deposes to an annual income of $208,000. It does not depose as to the receipt of any annual bonuses, nor as to the payment of any other expenses. The husband’s payslip for early 2023 records that the husband receives an annual car allowance of $20,000. It further records lump sum bonuses paid to the husband each year commencing 2011. The bonus paid in 2022 was $38,959. The bonus received by the husband in 2023 was $47,957 gross – almost half that of the wife’s total annual income.^[32] The wife submitted that the husband earns $230,000 in addition to his bonuses. I am unable to make a finding as to the whether the husband’s asserted annual income of $230,000 includes his discretionary bonus although it is likely that it does not. In any event, it is clear and I find that the husband has a substantial earning capacity as compared to the wife. This earning capacity continued unfettered during the parties’ relationship and will most probably continue to do so. The husband will continue to receive employer contributions to his superannuation fund of a much higher value than the wife who has a lower income.
113. The wife is 46 years of age. She is in good health.
114. The wife is the uncontested resident parent of the children of the marriage. The father spends five nights per fortnight with the children pursuant to final orders entered into by consent in October 2022.
115. X has been diagnosed with Autism Spectrum Disorder, Global; Developmental Delay, Severe Language Impairment and ADHD. X Attends AF School in Suburb O and attends a special needs class within the support unit. It is unchallenged that X continues to meet the New South Wales Department of Education’s criteria for a Mild Intellectual Disability. ^[33] A school psychologist report assessing X for the purposes of determining whether his continued placement in the school support unit is appropriate dated July 2022 records that: –
     • X presented with mild defiance; becoming dysregulated and screaming, crying and kicking the door when told he would not receive a reward as he had not completed the assessment.
     • His testing results suggest moderately low communication skills, low daily living skills, moderately low socialisation skills and adaptive behaviour functioning.
     • His inattention levels, hyperactivity/impulsivity, defiance/aggression and peer relations were reported by his teacher and the wife as very elevated.
     • His learning problems and executive functioning were reported by his teacher and the wife as average elevated.
116. There was no challenge to this report. I am satisfied that X is a high needs child and the majority of his care will continue to be undertaken by the wife.
117. The mother conceded that as between the income she receives from X’s NDIS funding she is not currently required to pay for X’s therapies or services, however she gave evidence that X’s current NDIS funding has accumulated credit as a result of his usual services being suspended during the COVID-19 pandemic. NDIS has not yet approved his application for physiotherapy, and he is on a waiting list. The wife deposes and I accept that where the NDIS funding is not able to cover support for X she will be required to pay the shortfall.^[34] The wife was not challenged on her evidence that she anticipates that her financial and care responsibilities for X will likely continue beyond his reaching the age of eighteen years and I so find that on balance this is probable.
118. The husband has been paying child support on a regular basis since the parties’ separated on a final basis under the same roof in February 2021. The wife conceded during cross-examination that taking into account the child support she receives she is currently in a surplus although she prefaced “that’s just a rough estimate.” When it was put to the wife that she does not have expenses that outweigh the child support she receives her response was “I live within my means.”
119. The wife submits that if the court rejects the application for the notional add backs as sought by the wife at points 24 to 27 of the original balance sheet that such funds should be determined pursuant to section 75(2)(o). The submission made on behalf of the mother was that in circumstances where the husband asserts he bought $200,000 into the relationship, he has provided no evidence of such funds nor how they were expended. I reject this submission having regard to the findings I have made above as to the use and application of these funds.
120. The husband submitted that an adjustment of no more than 5% to the wife is appropriate as: –
     • The wife’s annual income is now closer to $110,00 rather than the $92,000 disclosed by her and thus there is a disparity in earning income capacity of $120,000.
     • She conceded in cross examination that her child expenses on a weekly basis is less than or equal to the child support paid by the husband.
     • The husband is paying for M’s private school fees.
     • The husband is caring for the children five nights each fortnight.
121. The wife submitted that an adjustment to the wife of 10 % is appropriate as: –
     • The wife’s future needs are significantly greater than those of the husbands.
     • There is a significant disparity in the income of each of the parties. The wife was absent from the work force for 7 years in order to fulfill the role of primary caregiver to the children and manage X’s additional needs.
     • The wife has the majority care of the children, including the co-ordination of services to address the additional needs of X.
122. It is a matter of discretion as to whether an assessment of any adjustment to the contribution findings is dealt with by way of separate findings against each of the pools of superannuation property and non-superannuation property or whether any adjustments to be made to the contribution finding can be more conveniently made by looking at the superannuation and non-superannuation property pools together. ^[35]
123. The wife has a greater need for her adjustment to be realised from the non-superannuation pool. Whilst the husband has a greater earning capacity, the wife has a longer period of time in the workforce ahead of her to accumulate superannuation. I am thus not satisfied that any adjustment to the contribution findings should be made to the superannuation pool. Thus, the parties’ respective entitlements to superannuation will remain equalised.
124. Holistically and weighing up all of the above considerations I am satisfied that a meaningful adjustment should be made to the wife of 10% as to the non-superannuation property pool arising from the husband’s significantly higher annual income than the wife who will continue to be the main carer for the two children, one of whom has high needs. There was no challenge to the wife’s assertion that her care of X will be required to continue past his attaining the age of 18 years. This equates to the wife receiving an adjustment of $116,929 of the non-superannuation property, a differential of $233,858 – approximately one year of the husband’s gross income.
125. Accordingly the husband will receive 47.5% of the non-superannuation property pool and the wife 52.5%.

JUST AND EQUITABLE

126. On the above findings, the husband is entitled to receive: –
     • 47.5% of the non-superannuation property = $555,414
     • 50% of the superannuation property = $230,750
127. The wife would receive: –
     • 52.5% of the non-superannuation property = $613,878
     • 50% of the superannuation property = $230,750
128. The husband will retain non-superannuation property and liabilities with a value of $32,731. The wife will be required to pay him a cash sum of $522,683 to retain the former matrimonial home. The husband would retain superannuation entitlements to the value of $230,750.
129. The wife will retain non-superannuation property of $1,481,086. She will be required to refinance to cover the existing mortgage of $343,856 and the payment required to the husband of $522,683 – a total of $866,539. She would receive superannuation entitlements to the value of $230,750.
130. The husband seeks the equalisation of the parties’ superannuation and thus a superannuation splitting order of $118,775. The wife invites the court to make a minimal adjustment to the husband’s superannuation in circumstances where she seeks to retain the former matrimonial home.
131. The wife’s unchallenged evidence was that: –
     • She seeks an outcome where she can retain the former matrimonial home, particularly as X needs stability and familiarity of environment.
     • X is able to situate himself in relation to the homes location and is able to describe and direct others to where his school is, where his grandparents live and where the maternal aunt lives from the origin point of the home or return home from any of these locations.
     • The home is 15 minutes’ drive from the maternal grandparents who provide assistance to the wife with the care of the children. It is also a 10 minutes’ drive from the wife’s workplace and X’s school and a 15-minute drive from M’s school.
     • Changes to routine cause a lot of disturbance to X’s development.
     • Based on her initial inquiries with mortgage brokers she would not be able to fund the purchase of a comparable residence in the area that would be suitable for herself and the children, noting that she would have to pay stamp duty and associated purchase costs.
     • The rental cost for a four-bedroom home in the area is approximately $800 a week which exceeds the sum currently paid by the wife in mortgage repayments. If she is unable to retain the matrimonial home, she will be required to move to a different suburb. This will impact her employment as the wife currently has an agreement with her employer to commence work half an hour late to accommodate the time frame required to drop X directly to his special education teachers at the commencement of school.
132. The husband submitted that whilst he wishes to provide the wife with every opportunity to retain the home and to thus not displace the children it is unlikely that she will be able to refinance the loan secured by way of mortgage over the property to do so. It was further submitted that the husband entered the relationship with superannuation of $12,000 and

There is no reason for my client to be loaded up with a …super pool asset adjustment and for the wife to be loaded up with cash, again just to achieve her outcome… her outcome of this is really just pitched on a capacity to refinance. It’s appropriate in those circumstances to make an order which has an equal adjustment of super, given the manner in which both parties came into the relationship with superannuation.

133. It does not appear to be the subject of challenge that the wife has obtained pre-approval for a loan of $550,000. The wife was cross examined as to her capacity to meet the repayments required to service such a loan. Her evidence was that on her current income she believes she would have the capacity to do so.
134. In the event the wife receives her adjustment to property by way of both superannuation and non-superannuation it is unlikely that she will be able to refinance to retain the former matrimonial home; the sum she is required to refinance is over $300,000 more than her asserted ability to do so. The wife may be assisted by repayment to her by her daughter of the $96,000 given to her by the wife but that is a matter for her.
135. Even if the wife were to receive all of her entitlements by way of an adjustment to non-superannuation only, she would not receive a further $118,775 cash sum as this would ignore the nature and characteristics of superannuation entitlements which cannot be accessed now. Even if she were, it appears unlikely that the wife would be able to refinance in the circumstances.
136. Whilst I accept the reasons for the wife wishing to retain the former matrimonial home if she is able to do so, it is the unfortunate reality of the construction of the property of the parties that they both find themselves in a position where they each seek to maximise their adjustment of non-superannuation so as to have funds available to acquire or retain a home. Each of the parties have the children with them for a significant and substantial time – the wife four nights a fortnight more than the husband. There is no evidence before me as to any adverse consequences for X in spending five nights a fortnight with the husband in his new accommodation. Each of the parties will have the opportunity to retain the home – X may end up staying in the former matrimonial home when spending time with the husband. If I were to make an adjustment to the wife totally out of the non-superannuation property this would leave the wife with significantly less provision for her future retirement. Whilst this is a finely balanced matter, I am not satisfied having regard to the reality of the construction of the property of the parties that it is just and equitable for the husband to be left with the majority of the superannuation property and the wife the majority of non-superannuation property.
137. Thus the superannuation property of the parties will be equalised by way of a superannuation splitting order to the wife. The husband’s Case Outline recorded that procedural fairness had been accorded to the superannuation trustee sometime prior to 15 July 2023 and I am satisfied that procedural fairness has been accorded. An equalisation of the parties’ superannuation entitlements will require a splitting order in the wife’s favour of $118,775.
138. In addition, the parties will receive the following non superannuation property if the wife is able to refinance the mortgage:

139. Standing back and looking at the distribution of assets on an overall basis, I find that this distribution achieves a just and equitable alteration of the property interests of the parties.
140. Orders will be made accordingly.