Kasiopoulos & Garapiperis [2012] FamCAFC 85 (21 June 2012)
Last Updated: 22 June 2012
FAMILY COURT OF AUSTRALIA
| Family Law Act 1975 (Cth) Part VIII; ss 75(2), 79, 79(2) |
| CDJ v VAJ (1998) 197 CLR 172 Dean & Dean [1999] FamCA 1846 Gabel & Yardley [2008] FamCAFC 162; (2008) FLC 93-386 Gollings and Scott [2007] FamCA 397; (2007) FLC 93-319 Gronow v Gronow [1979] HCA 63; (1979) 144 CLR 513 Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener)[2003] FamCA 395; (2003) FLC 93-143 Mallett v Mallett [1984] HCA 21; (1984) 156 CLR 605 Manolis & Manolis (No.2) [2011] FamCAFC 105 Mitchell & Mitchell (1995) FLC 92-601 Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 |
| LOWER COURT MNC: | [2010] FamCA 1184 |
REPRESENTATION
ORDERS
(1) That the appeal be allowed in part.
(2) That order 1 of the orders of 2 December 2010 be varied by substituting the sum of $88,656.19 for the sum of $91,070.85 therein appearing.
(3) That the time for compliance with order 1 of the orders of 2 December 2010, as amended, be varied to provide “within 42 days of this date”.
(4) That there be no order for costs.
(5) That the Court grants to the Appellant Husband a costs certificate pursuant to the provisions of s.9 of the Federal Proceedings (Costs) Act 1981(Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the Appellant Husband in respect of the costs incurred by the Appellant Husband in relation to the appeal.
(6) That the Court grants to the Respondent Wife a costs certificate pursuant to the provisions of s.6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the Respondent Wife in respect of the costs incurred by the Respondent Wife in relation to the appeal.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Kasiopoulos & Garapiperis has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appellant
And
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
- By Notice of Appeal filed 22 December 2010 Mr Kasiopoulos (“the husband”) appealed against orders made by Loughnan J on 2 December 2010 in financial proceedings pursuant to Part VIII of the Family Law Act 1975 (Cth) (“the Act”) between himself and Ms Garapiperis (“the wife”).
- The orders of the trial Judge which the husband challenged provided that the assets of the parties be divided as to 70 per cent to the wife and 30 per cent to the husband. To give effect to such division, the trial Judge ordered that the wife receive 90.6 per cent of the equity in the parties’ former matrimonial home, and that the husband receive 9.4 per cent of such equity. In lieu of that order the husband sought that the wife be entitled to 56 per cent of the equity in the former matrimonial home, and that he be entitled to 44 per cent thereof.
- The wife resisted the husband’s appeal, and sought to maintain the trial Judge’s orders.
BACKGROUND
- The husband was born in April 1966 and the wife was born in April 1965.
- The parties were married and commenced cohabitation in September 1990.
- The parties separated in March 2008 and were divorced in July 2009.
- There are three children of the marriage, who are currently aged 19, 15 and 12 years.
- The husband has re-partnered and has a child of his present relationship. The wife has not re-partnered.
- On 29 October 2009 property settlement proceedings were heard by Judicial Registrar Johnston (as he then was) and judgment was reserved. Judgment was delivered on 29 January 2010.
- On 2 and 3 September 2010 the proceedings came before Loughnan J pursuant to an application to review the decision of Judicial Registrar Johnston of 29 January 2010. On 2 December 2010 Loughnan J determined the review application, and made the orders which give rise to the present appeal.
THE GROUNDS OF APPEAL
Ground 1
- Ground 1 of the Notice of Appeal provided:
- That the Trial Judge was in error in the exercise of his discretion in that the result embodied in his orders was plainly unreasonable and manifestly unjust.
- As Counsel for the husband confirmed during the course of oral submissions, as articulated in his written submissions, the crux of this challenge was that:
... In determining the Husband’s entitlement of 30%, his superannuation of $175,346.00 was included, as was an add-back for his paid legal fees of $77,292.15. If these two amounts are deducted, the tangible assets which the Husband would receive or retain pursuant to the Trial Judge’s orders, total $164,487.85. The Husband will not be able to have access to his superannuation for at least some ten (10) years. If the Wife’s superannuation of $33,272.00, the add-back for her paid legal fees of $39,157.18 and the add-back for the destruction by her of the Husband’s text books are deducted, the tangible assets which the Wife would receive or retain total $896,864.82 pursuant to the Trial Judge’s orders. As such, the Wife retains tangible assets which are some 5.5 times the value of the tangible assets received or retained by the Husband.
- It was accordingly submitted that, had the trial Judge revisited the proposed division of the property of the parties pursuant to s 79(2) of the Act, his Honour would, or should, have appreciated the effect of the orders he proposed making, and not have made the orders he did.
- In Manolis & Manolis (No.2) [2011] FamCAFC 105 the Full Court considered “the applicability of the ‘just and equitable’ provision in s 79(2).” Having referred to Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) [2003] FamCA 395; (2003) FLC 93-143 and Gabel & Yardley [2008] FamCAFC 162; (2008) FLC 93-386, the Court concluded that:
- It can be seen that power to make orders in regard to property is not exhausted after the third step [referred to in Hickey and Hickey (supra)]. It is not until orders are made that the power is exhausted. The exercise of power pursuant to s 79 of the Act remains subject to the overarching requirement of justice and equity imposed by s 79(2) until it is exhausted. Therefore, we cannot accept that the Federal Magistrate lacked the “power” to revisit the outcome to which she had been led by her consideration of s 79(4) and s 75(2) factors by reference to s 79(2) of the Act. If so doing persuaded her Honour that her proposed outcome was not just and equitable, she could not properly make orders in those terms.
- Having regard to the nature and extent of the matters which had been evaluated pursuant to s 79(4) and s 75(2) of the Act prior to her consideration of s 79(2), the Federal Magistrate’s scope for varying the substance of the outcome resulting from that exercise would have been limited. It is difficult to discern specific matters impacting a consideration of s 79(2) which are not articulated in either s 79(4) or s 75(2) of the Act. The section does however oblige the court to “stand back” from its preliminary determination, and consider its impact. So doing may inform the terms of the orders appropriate to produce a just and equitable outcome in those terms. It may result in a re-consideration of s 79(4) and or s 75(2) factors, and a different outcome. Whatever the scope of s 79(2), the court’s determination with respect to it cannot be dependent upon findings or conclusions which are irreconcilable with those recorded in the context of a consideration of s 79(4) or s 75(2). Regrettably, that is what occurred in this case. In our view, paragraphs 71 and 78 of her Honour’s reasons cannot stand together.
- The calculations advanced by Counsel for the husband in support of this challenge were not disputed by Counsel for the wife. In essence, in his written and oral submissions, Counsel for the wife submitted:
- (a) That the trial Judge had been invited to treat the superannuation interests of the parties in conjunction with the “tangible” assets in “one asset pool” rather than two asset pools;
- (b) That, included in the husband’s superannuation interest was the sum of $67,728 which the husband had paid into his superannuation fund after separation and relied upon as a contribution in his favour; and
- (c) Finally, had the husband not paid his legal fees, but retained $77,292.15 in a bank account, it would have been able to be included as an asset of the husband.
- There is no doubt that the trial Judge was not invited to differentiate between the parties’ superannuation interests and their “tangible” assets. Notwithstanding that he was not so invited or requested, the trial Judge considered the issue under the heading “A separate pool for superannuation” and concluded:
- Here the parties have adopted a global approach to the assessment of contributions. On that basis, I too will employ a global approach.
- In circumstances where the trial Judge was not requested to differentiate between “tangible” assets and superannuation interests, we do not accept that his Honour erred at the “fourth step” by failing to in some way discount the undisputed value of the parties’ superannuation interests pursuant to s 79(2). This is particularly so having regard to the second broad contention of Counsel for the wife to which we have referred above.
- Other grounds of the husband’s appeal, to which we shall later refer, challenge the trial Judge’s treatment of the husband’s paid legal fees. If the trial Judge could have permissibly added back the husband’s paid legal fees in the sum which his Honour added back, when determining the property of the parties to the marriage, nothing to which we have been referred would demonstrate that the trial Judge erred at the fourth step by failing to “stand back”, and consider the implications of the orders he proposed making, or the reality that the husband’s entitlement included $77,292.15 of paid legal fees.
- We are not persuaded that this challenge has merit.
Grounds 2 and 3
- Grounds 2 and 3 of the husband’s Notice of Appeal provided:
- That the Trial Judge was in error in the exercise of his discretion in determining that the contributions of the parties at the time of the hearing were equal.
- That the Trial Judge was in error in the exercise of his discretion in failing to place any or sufficient weight upon the financial contributions made by the Husband after the time of separation until the time of hearing and in particular in relation to:-
- (a) The contribution of a bonus of $127,467.00 to reduce the home loan in relation to the [Q] property.
- (b) The contribution of the proceeds of sale of [F Corporation] shares from an economic bonus scheme of $162,962.00 to reduce the mortgage loan account in respect of the [Q] property.
- (c) The contribution by way of salary sacrifice and employer contributions of $68,728.00 to his superannuation entitlement.
- (d) The contribution of monies from his income to the conservation of matrimonial assets and for the welfare of the family.
- Having regard to the terms of these challenges, and the submissions made in support of, and in opposition to them, it is preferable to consider Grounds 2 and 3 conjointly. Ground 2 can be seen as a qualitative challenge whilst Ground 3, which is complementary to it, raises a quantitative challenge. The fate of Ground 2 is dependent upon the fate of Ground 3.
- As the written and oral submissions of Counsel for the husband confirm, the challenge to the trial Judge’s conclusion with respect to contributions was confined to the post-separation period. Before the trial Judge and this Court, the husband did not dispute that, until the date of separation in 2008, the parties’ contributions were appropriately regarded as equal.
- The post-separation contributions upon which his Counsel relied in support of these challenges included the husband’s contributions:
... from income and bonuses received by him to reduce the mortgage in respect of the [Q] property (acquired after separation) and in particular to increase the value of his superannuation fund. Further, the Husband made a significant contribution to the welfare of the family, both financially and as a parent and homemaker.
- It was asserted on behalf of the husband that:
Whilst appearing to recognise that the husband made significant financial contributions after separation, including substantial contributions to his superannuation fund, the Trial Judge determined that the factors which enabled the Husband to make these contributions had their genesis in the period of cohabitation. The parties’ arrangement gave special priority to developing the Husband’s financial capacity, at the cost of the Wife. As the Husband built his career, additional demands were made of the Wife [...]. It is submitted however that the building of the Husband’s career and the additional demands upon the Wife occurred prior to separation and should not detract from the Husband’s contributions post separation.
- As Counsel for the husband confirmed, whilst it was conceded that the matters to which he referred were potentially relevant, and regarded as being relevant by the trial Judge for the purpose of s 75(2)(k), the husband’s contention was that their impact should have been confined to the pre-separation period, and not a matter which could advance the wife’s claim with respect to contributions in the post-separation period.
- It was submitted by Counsel for the husband that the circumstances of the parties’ children in the post-separation period militated against the trial Judge diminishing the significance of the husband’s greater financial contributions by reference to the wife’s contributions as homemaker and parent.
- In that regard it was submitted:
... the parties put in place the current arrangement in relation to the children whereby [P] lives with the Husband on 9 days per fortnight and otherwise with the Wife and [J] and [C] live with the Wife on 9 days per fortnight and otherwise with the Husband. The Wife minded the children for periods when they could not be with the Husband when he was overseas and this occurred on six occasions after separation [...]. It is submitted that the Wife’s contribution post separation was primarily to the welfare of the family in her role as a parent and homemaker.
- It was thus ultimately submitted:
... that a significant contribution to the welfare of the family has been made by the Husband post separation which has not been adequately recognised by the Trial Judge. This contribution substantially balances the contribution to the welfare of the family made by the Wife since the time of separation. The Husband paid child support and also for all of the children’s school fees.
- On behalf of the wife it was submitted that the trial Judge’s assessment of the parties’ post-separation contributions was not vitiated by any material error of fact. Nor was it submitted that the trial Judge had failed to have regard to any relevant fact or circumstance, or had regard to any irrelevant fact or circumstance. No error of principle was submitted to have vitiated the exercise of the trial Judge’s discretion.
- Counsel for the wife relied upon the receipt by the husband during the post-separation period of “a substantial income, bonuses and the monies from the sale of shares which he received as part of his employment package”. Counsel for the wife further submitted:
- ... The effect of the Appellant’s post separation contributions are inextricably entwined with the contributions made during the course of cohabitation [by both parties] whereby both contributed to the Appellant’s career in various ways during the course of cohabitation. Such contributions made by the Respondent [such as having a family and not pursuing her own career] were to her detriment.
- The crux of the submissions on behalf of the wife in relation to the benefits which the husband received after separation was that they were derived from, or as a consequence of, contributions made by the parties prior to separation and that, as such, it was open to the trial Judge, in the exercise of an undoubtedly broad discretion, to assess them in the way in which his Honour did.
- The submission of Counsel for the wife in relation to this issue was articulated in detail in the following terms:
- The Trial Judge gave careful consideration to the argument presented by the Appellant as to the greater contribution asserted post separation which [in the view of the Appellant] would mean that he had made a greater contribution overall. Such narrow argument does not have force because the Respondent [for example] could argue that she made a far greater contribution at a time during cohabitation when the Appellant was working long hours, studying for exams and often overseas and she was, responsible for homemaking as well as being in employment. It seems artificial to select a separate period and argue that because during that period [i.e. post separation] he was earning an income which enabled him to pay down debt and accumulate assets, and therefore his contributions are greater during that period and as such overall. The Appellant in such argument does not take into account the Respondent’s contributions that assisted him in enquiring [sic] that employment and income earning capacity.
- On her behalf, it was submitted in relation to the wife’s post-separation contributions as homemaker and parent that:
- ... The Appellant apparently overlooks the fact that the Respondent was in employment and used the income from her employment to provide for the three children at the times they were living with her and maintaining the parties’ property. It could not be asserted by the Appellant that he too was maintaining the property in that he was living an expensive lifestyle in stark contrast of that led by the parties during the course of cohabitation. (Footnote omitted).
- The crux of the submission on behalf of the husband in support of the challenges articulated in Ground 3(a) and (b) by reference to the bonuses received by the husband was:
... that the Husband made very substantial contributions after the time of separation as outlined above. In particular, a total amount of $290,429.00 from the bonuses he received reduced the mortgage in respect of the [Q] property, which was acquired after separation. Further, as a consequence of salary sacrifice and employer contributions, an amount of $68,728.00 was contributed to his superannuation fund between 16 July 2009 and 12 June 2010.
- It was thus submitted on behalf of the husband:
... that until the time of separation, the contributions of the parties were equal as conceded by the Wife under cross examination. It is submitted that in circumstances where there was no challenge to the extent of the significant financial contributions made by the Husband after the time of separation until the date of the hearing, a period of some 2 ½ years, that these contributions should be recognised and the Husband solely given credit for them.
- Counsel for the husband sought to advance his contentions by reference to the decision of this Court in Gollings and Scott [2007] FamCA 397; (2007) FLC 93-319. The effect of which was submitted to be that:
... consistent with the decision of the Full Court in Gollings v. Scott [2007] FamCA 397; (2007) FLC 93-319, the Husband was free to do with his post separation income as he pleased, provided he was at the same time properly meeting his obligations towards the wife and children. There was no obligation on the Husband in that decision to accumulate assets after separation. It is submitted that in this case, the Husband has in essence accumulated assets after separation from his income by discharging liabilities and increasing his superannuation and therefore he should be given credit for this in any assessment of contributions.
- Counsel for the wife submitted that Gollings (supra) did not support the proposition urged upon the Court by Counsel for the husband. Counsel for the wife also submitted that the bonus contributed by the husband resulted from the qualifications which he had acquired during the course of the parties’ 20-year cohabitation, and that a “substantial portion” of the shares the husband sold after separation had been allocated to him prior to the separation of the parties. The cross-examination of the husband, upon which Counsel for the wife relied in this context, revealed:
MR GIVNEY: Did any of those 1500 restricted [F Corporation] shares – were they allocated to you in 2008?
MR [KASIOPOULOS]: Some of them yes.
MR GIVNEY: Were any of those 1500 restricted [F Corporation] shares allocated to you in 2007?
MR [KASIOPOULOS]: Possibly. Possibly. I would have to look at the schedule and then I could tell you without, you know, beyond a doubt exactly the quantity and when they vested and when they were granted.
- The taxation report prepared by an accounting firm, and annexed to the affidavit of Mr Y sworn 30 August 2010, upon which Counsel for the wife also relied, recorded:
- Based on the schedule prepared by Mr. [Kasiopoulos] regarding his sale of the Shares, the tax implications of the sale are as follows:
- Mr. [Kasiopoulos’] sale of Shares in August 2009
- Based on the schedule prepared by Mr. [Kasiopoulos] regarding his sale of the Shares, the tax implications of the sale are as follows:
Taxable income recognized by Mr. [Kasiopoulos] upon sale of his Shares on 28 August 2009
| RS award relating to the Shares sold | Number of shares sold | Market value per Share upon sale (US$) | Total gain upon sale (US$) | US$ - A$ exchange rate on date of sale | Total gain upon sale (A$) | Taxable income of the Shares recognised upon grant of the RS awards (A$) | Taxable income upon sale of the Shares (A$) |
| 2006 RS award | 1,000 | $37.7507 | $37,750.70 | $1,19404 | $45,075.8458 | $43,713.43 | $1,362.41 |
| 2007 RS award | 1,000 | $37.7507 | $37,750.70 | $1,19404 | $45,075.8458 | $42,794.39 | $2,281.46 |
| 2008 RS award | 250 | $37.7507 | $9,437.68 | $1,19404 | $11,268.9815 | $9,354.13 | $1,914.83 |
- Mr [Kasiopoulos’] sale of Shares in July 2010
Taxable income recognized by Mr. [Kasiopoulos] upon sale of his Shares on 28 July 2010
| RS award relating to the Shares sold | Number of shares sold | Market value per Share upon sale (US$) | Total gain upon sale (US$) | US$ - A$ exchange rate on date of sale | Total gain upon sale (A$) | Taxable income of the Shares recognised upon grant of the RS awards (A$) | Taxable income upon sale of the Shares (A$) |
| 2006 RS award | 500 | $45.0600 | $22,530.00 | $1,11593 | $25,141.9029 | $21,856.72 | $3,285.19 |
| 2007 RS award | 500 | $45.0600 | $22,530.00 | $1,11593 | $25,141.9029 | $21,397.19 | $3,744.71 |
| 2008 RS award | 250 | $45.0600 | $11,265.00 | $1,11593 | $12,570.9515 | $9,354.13 | $3,216.82 |
| 2009 RS award | 250 | $45.0600 | $11,265.00 | $1,11593 | $12,570.9515 | $11,269.32 | $1,301.63 |
- Capital gains may be offset by available capital losses realised in the same income year or earlier income years. Such losses may first be applied to non-discount capital gains (i.e., amounts to which the 50% capital gains discount does not apply) and then, to the extent any capital losses still remain, may be applied to discount capital gains.
(Footnote omitted).
- The trial Judge was submitted to have “succinctly” addressed the husband’s assertion (at par 184 of the reasons) to which we will shortly refer. It was further submitted on behalf of the wife that the “concept of ‘a line being drawn in the sand’” implicit in the submissions of Counsel for the husband was “not a proper approach to the facts and circumstances of this case”.
- In Mallett v Mallet [1984] HCA 21; (1984) 156 CLR 605 Gibbs CJ, at pages 608-610, said:
... The Act does not indicate the relative weight that should be given to different circumstances, or how a conflict between opposing considerations should be resolved - those things are left to the court’s discretion, which must, of course, be exercised judicially.
...
Decisions in particular cases of that kind can, however, do no more than provide a guide; they cannot put fetters on the discretionary power which the Parliament has left largely unfettered. It is necessary for the court, in each case, after having had regard to the matters which the Act requires it to consider, to do what is just and equitable in all the circumstances of the particular case.
...
The respective values of the contributions made by the parties must depend entirely on the facts of the case and the nature of the final order made by the court must result from a proper exercise of the wide discretionary power whose nature I have discussed, unfettered the application of supposed rules for which the Family Law Act provides no warrant. ...
- Wilson J, at page 636, said:
... What the Act requires is that in considering an order that is just and equitable the court shall “take into account” any contribution made by a party in the capacity of homemaker or parent. It is a wide discretion which requires the court to assess the value of that contribution in terms of what is just and equitable in all the circumstances of a particular case. There can be no fixed rule of general application. ...
- In Dean & Dean [1999] FamCA 1846 the Full Court said, with respect to the Court assessing the nature and quality of parties’ contributions:
- Whilst it will generally be the case, given significant intervening contributions over a significant period of time, that an initial contribution will be reflected in a lesser sum than the original contribution itself, that is by no means invariably the outcome of evaluation of contributions. The trial Judge was exercising a discretion which was of generous ambit. In Norbis v Norbis 161 CLR (1986) 513 Brennan J at 539 –540 noted that:
“The difficulties in the way of developing guidelines beset an appellate review of the exercise of a discretion under Section 79. Unless the primary judge reveals an error in his reasoning, the Full Court can intervene only if the order made is not just and equitable...The “generous ambit within which reasonable disagreement is possible” is wide indeed when there are a number of factors to be taken into account and the comparative weight to be attributed to those factors is not clearly indicated by uniform standards and values of the community. The generous ambit of reasonable disagreement marks the area of immunity from appellate interference.”
- As is not in doubt, particularly when regard is had to the decisions of the High Court in Mallett (supra) and Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513, the Court must evaluate the contributions of the parties pursuant to the relevant provisions of s 79(4) of the Act. Neither in Gollings (supra) nor any provision of the Act, or other authority to which we have been referred, do we discern support for the proposition that, once a party has provided adequately for the other party and/or children of the marriage in the post-separation period, the fruits of any acquisition, conservation or improvement of further property in that period are necessarily to be regarded as exclusively, or overwhelmingly, the entitlement of that party. A Court may so conclude in an appropriate case, but so doing does not establish any “principle” to that effect.
- The assessment of post-separation contributions involves an examination of the contributions made by each party, financial and non-financial, direct and indirect, and, as in the present case, where significant assets have been acquired or significant liabilities eliminated or reduced, the genesis of the funds utilised for such purposes, and how they were then conserved, enhanced, or otherwise dealt with.
- In the circumstances of this case, as Counsel for the wife submitted, it is somewhat artificial to draw a “line in the sand” in the way Counsel for the husband sought to. That is not to suggest that there is any presumption that the contribution entitlements of the parties at the date of separation will necessarily continue to be regarded as equal thereafter, or that careful consideration is not required, as in a case such as this, of how bonuses, proceeds of sale of shares, and other benefits came about.
- As we have earlier noted, the trial Judge recorded in this regard:
- The factors that enabled the husband to make significant financial contributions after separation had their genesis in the period of cohabitation. The parties’ arrangement gave special priority to developing the husband’s financial capacity, at the cost of that of the wife. The argument made on behalf of the husband as to the impact of the financial and other contributions made by him since separation must be considered in the context of all of the contributions made by and on behalf of the parties. Here, contributions were made during more than 17 years of cohabitation and have continued during more than 2 years since separation. Care is needed in making an allowance for the impact of what was done in 2½ years, in the context of efforts made during two decades. As the husband built his career, additional demands were made of the wife.
- His Honour further recorded:
- The problem the husband faces in arguing that his contributions over about 20 years, were greater than those of the wife, is one of time. He is not someone who generated an income out of all proportion to the time he applied to his work. He worked long hours and made a substantial commitment of time to work related travel. He is to be credited with those efforts but they necessarily came at the expense of his availability to the family.
- None of the foregoing findings of fact has been shown to have been other than reasonably open to the trial Judge. We discern no error of principle in his Honour’s evaluation of the post-separation period.
- For the reasons which he articulated, the trial Judge uncontroversially declined to notionally add-back the $127,914 in bonuses which the husband received in March 2010. The trial Judge again, uncontroversially, recorded the composition of that sum in the following terms:
126. The wife proposes that the following sums be added back:
| Bonus | Value |
| Bonus paid in 2008 for work performed in 2007 ($26,129 less 46.5per cent tax) | $12,150 |
| Bonus paid in 2009 for work performed in 2008 ($121,487 less 46.5per cent tax) | $56,492 |
| Bonus paid in 2010 for work performed in 2009 ($127,467 less 46.5per cent tax) | $59,272 |
| Total | $127,914 |
- The parties separated in May 2009. It is readily apparent that approximately $68,642 of the bonus received by the husband related to periods of employment prior, or almost prior, to the parties’ separation. As the trial Judge uncontroversially recorded, the husband’s earning capacity increased steadily throughout the marriage, as did his formal academic qualifications and experience.
- So far as the husband’s shares are concerned, a number of matters are relevant. The first is that the trial Judge included as a liability of the husband the sum of $315,142 referable to the sale by him of F Corporation shares after the parties separated. With respect to Counsel for the husband, to accept the inclusion of that liability at step 1, and thus have the wife effectively pay one half of such liability, yet assert that the whole of the benefit of the shares which were sold, and gave rise to that liability should have been regarded as a contribution solely by the husband, is somewhat disingenuous, and not a proposition we can accept.
- It is also to be remembered that the trial Judge declined to add-back anything with respect to the value of “restricted [F Corporation] stock, not yet vested” asserted by the wife to be likely to generate in excess of $120,000 in the husband’s hands. In that regard, the trial Judge recorded:
- It is the wife’s case that the husband will receive more than over $120,000 worth of shares and that the tax referable to the issue of those shares to the husband has been accounted for in a tax debt of over $315,000 which is allowed in the table of liabilities.
- For the reasons referred to above in respect of the general approach add-backs, I do not propose to include this sum as a notional asset in the hands of the husband.
- The trial Judge had earlier recorded with respect to the husband’s acquisition of shares:
- In July 2005 the husband became eligible to participate in and receive rewards under a long term incentive plan of [F] Corporation, a US-based corporation which is the holding company of [F Company].
...
- In July 2008 the husband sold a parcel of [F Corporation] shares. At around that time, the wife withdrew $5,000 from the investment loan account, without the husband’s knowledge or consent.
...
- On 27 August 2009 the husband sold 8,998 shares he held in Westinghouse Air Brake Technologies Corporation.
- On 12 January 2010 the husband was uncontroversially found to have provided approximately $240,000 towards the purchase, with his present partner, of a property at Q. That sum comprised:
- ...
$56,566.39 from the sale of MLC Income Builder Investments
$42,481.89 from the sale of Perpetual Investments Fund
$25,686.25 from the sale of Fortis Investments
$102,544.05 from the sale of [F Corporation] shares
...
$13,624.92 from his savings
- The trial Judge also recorded with respect to the acquisition of the shares by the husband:
- Also in March 2010 the husband received an allocation of 1,829 [F Corporation] shares from the Economic Profit Bonus scheme.
...
- On 31 July 2010 the husband sold [F Corporation] shares for $162,962 and deposited the proceeds into his mortgage loan account. As at September 2010 the [Q property] loan stood at $630,732.
We have not been referred to any evidence establishing that the shares there referred to were acquired by the husband after the separation of the parties.
- In his evaluation of post-separation contributions, the trial Judge reflected:
- One can see why the wife would be aggrieved. The combination of events since separation, and in particular, since the first property settlement decision of 29 January 2010, has been to make her retention of the [B] property very difficult. She had no say in the husband’s use of assets after separation. Apart from a substantial increase in the value of the [B] property, there has been a reduction in the net value of other assets in the pool.
...
- In my view the husband’s conduct involved him ‘getting on with his life’. The husband and Ms [N] were living in rented premises. They have a child. They bought a house. The husband had rights under his employer’s incentive schemes. He had new expenses and needed to make arrangements to address them. In other words, life did not stop just because these proceedings were still on foot.
- It must be said that the husband got on with his life in a comfortable fashion. The credit card records show evidence of substantial lifestyle expenditure including expenditure on restaurants, quality accommodation and on the purchase of alcohol. In the latter regard the husband conceded that he may have spent about $1,500 on wine in one day in October 2008. He conceded that he could not recall spending that much on wine on any one day during the marriage. The husband spent $15,000 on an engagement ring for Ms [N]. There were purchases on gifts at a cost totalling about $2,000 at Gucci shops in Beijing and Sydney. Those purchases were made in February and August 2009, respectively. Twice Ms [N] accompanied the husband on overseas trips.
- Further, the husband conceded in cross-examination that, without notice to the wife, he deliberately crystallised the potential taxation implications of the benefits received under the incentive schemes to ensure that those liabilities would be taken into account in these proceedings. That was not his only motivation for selling shares, he also wanted to reduce debt.
- Nothing to which we have been referred establishes that it was not reasonably open to the trial Judge to conclude as he did with respect to the post-separation period. Having regard to the vastly greater earning capacity of the husband to that of the wife in that period, and how that came about, how the assets realised by the husband and other benefits received by him came to be available, the evidence of how the husband “got on with his life”, and the extent to which he did, we are not persuaded that the trial Judge erred by concluding that the post-separation period ought not alter the entitlements which the parties had established over the decades of their cohabitation.
- As Counsel for the wife submitted, and the trial Judge accepted, the fact that the parties were no longer cohabiting did not mean that the impacts of the wife’s substantial and equal contributions over the course of the parties’ cohabitation could not carry forward in the way in which the trial Judge accepted that they had.
- These challenges fail.
Grounds 4, 5, 6 & 7
- Grounds 4, 5, 6 & 7 of the husband’s Notice of Appeal provided:
- That the Trial Judge was in error in the exercise of his discretion in making an adjustment of 20% in favour of the Wife to reflect relevant Section 75(2)factors.
- That the Trial Judge was in error in the exercise of his discretion in placing undue weight in his assessment of Section 75(2) factors of the difference between the incomes and income earning capacities of each of the parties.
- That the Trial Judge was in error in the exercise of his discretion in failing to place sufficient weight in his assessment of Section 75(2) factors of the fact that the child, [P] was in his primary care and that the other two children of the marriage, [J] and [C] were in his care for nearly the same time as they were in the care of the Wife.
- That the Trial Judge was in error in the exercise of his discretion in failing to place sufficient weight in his assessment of Section 75(2) factors upon the Husband’s responsibility to support financially the child of his relationship with his partner, Ms [N] as well as Ms [N].
- As Counsel for the husband frankly conceded, the trial Judge’s s 75(2) determination having not been vitiated by reliance upon material errors of fact, or reliance upon extraneous or irrelevant matters, or the failure to have regard to relevant matters, the challenge was necessarily that the adjustment determined by the trial Judge fell beyond the ambit of a reasonable exercise of discretion or was “plainly wrong” (per Kirby J in CDJ v VAJ (1998) 197 CLR 172 at pages 230-231). As is not in doubt, the effect of the s 75(2) adjustment determined by the trial Judge was that the wife received approximately $560,000 more than the husband.
- The husband complained that the trial Judge had erred in adjusting by 20 per cent in the wife’s favour pursuant to s 75(2) when the adjustment sought on her behalf had been for 15 per cent. In fairness, Counsel for the husband conceded that such adjustment was sought on the basis that the trial Judge would find the net assets of the parties to be worth $1,644,621. The trial Judge in fact concluded the net assets of the parties to be worth $1,390,420.33 ($2,382,482.33 - $992,062) [at par 143]. An adjustment of 15 per cent by reference to a net asset pool of $1,644,621 would have resulted in a disparity of $493,386.30 (30 per cent of $1,644,621).
- As is not in doubt, the trial Judge was obliged to make orders which were just and equitable having regard to the provisions of s 79(4) and s 75(2). Having found that the asset pool was substantially (18 per cent) less than the wife asserted, the trial judge was not obliged to consider her claim pursuant to s 75(2) as being limited to seeking a 15 per cent adjustment. We cannot accept that the trial Judge having “increased the percentage adjustment in favour of the wife because the wife was seeking a 15 per cent adjustment of the greater pool” was in itself erroneous. Had the husband conceded at trial that a 15 per cent adjustment by reference to an asset pool of $1,644,621 net was appropriate we might not have concluded as we have. The husband’s case at trial was that 5 – 10 per cent was an appropriate adjustment (par 231).
- It remains however to consider whether the very substantial s 75(2) adjustment made in the wife’s favour exceeded the generous ambit of the trial Judge’s discretion. Sensibly, Counsel for the wife conceded that the adjustment probably represented the “top of the range” for the wife.
- As is not unusual with what are ultimately “weight” challenges, in which no material errors of fact or principle are asserted, the husband’s complaint is simply articulated, and is that the s 75(2) adjustment made by the trial Judge was manifestly excessive. The “top of the range” urged by Counsel for the husband, 10 per cent, translated as a disparity in the wife’s favour of $280,000. Such sum was submitted to amply accommodate the factors relied upon by the wife pursuant to s 75(2) of the Act.
- In reliance upon the trial Judge’s finding that the husband had the capacity to earn $5,800 per week (par 191), and the wife the capacity to earn $1,490 per week inclusive of child support, (par 201), Counsel for the wife submitted that, in the five years following the trial Judge’s orders, the husband would earn approximately $630,000 after tax. During the corresponding period, the wife would earn approximately $203,000 after tax.
- Although not conceding the impact of the foregoing calculations, in his submissions in reply Counsel for the husband did not dispute the accuracy of Counsel for the wife’s calculations. It was also not suggested by Counsel for the husband that the evidence revealed that the wife’s earning capacity was any higher than $1490 per week. As Counsel for the wife submitted, the figures graphically illustrate the impact of the disparity of earning ability as between the parties.If the child support component of the wife’s $1,490 per week were disregarded, as arguably it could, the impact of the husband’s greater earning capacity is even more evident.
- Counsel for the wife relied upon her having the greater responsibility for the care of the two younger children of the marriage. Albeit the disparity in the responsibilities for the care of the children as between the parties was modest (nine days per fortnight with the wife, five with the husband), a more than token adjustment in the wife’s favour for that factor was in our view permissible.
- Counsel for the wife also relied upon the standard of living of the parties. In the context of Grounds 2 and 3, we referred to the trial Judge’s undisturbed findings with respect to the standard of living of the parties in the post-separation period (pars 103, 105 & 106). Those findings provided a basis for a s 75(2)adjustment in the wife’s favour of modest proportions.
- The trial Judge was entitled to rely upon the impact of the marriage on the earning capacity on each of the parties. His Honour uncontroversially recorded:
- The husband undertook studies during the marriage which have assisted his career. The studies were:
Period
|
Course
|
| 1985-1990 | Bachelor [degree] |
| 1991-1992 | Master [degree] |
| 1996-1997 | TAFE – Marketing Certificate III |
| 2002-2005 | Master of Business Administration [...] |
- Of those courses, his undergraduate studies were undertaken on a full-time basis, mostly before the marriage and he had some part-time paid employment. The remaining courses largely involved lectures and study at night. In relation to the [Master of Business Administration studies] the husband spread the studies out, undertaking a two year course over 3 ½ half years. It is the wife’s case and I accept, that her study and career aspirations gave way to those of the husband, for the betterment of the family. There is little doubt that the husband’s qualifications contributed to his current earning capacity.
(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;
- It is likely that the marriage adversely affected the earning capacity of the wife. She took the greater amount of leave on the birth of each child. She took up part-time employment and, without being patronising, her roles did not increase in complexity or remuneration over the life of the marriage. The wife lost the opportunities that come with unbroken periods of paid employment – promotion, leave entitlements and superannuation.
- On the other hand the marriage and in particular the wife’s role, enabled the husband to devote himself to building a successful career.
- Not only did the husband have a far greater earning capacity than the wife, but, as a consequence of it, a far greater ability to make contributions to his superannuation. The trial Judge uncontroversially summarised his assessment of relevant s 75(2) factors in the following terms:
- Both parties seek an adjustment in favour of the wife. The husband argues that there should be an adjustment of 5 per cent-10 per cent in her favour. He does that, of course, in aid of an argument that there be an equal division overall. The wife argues for an adjustment of 15 per cent. She does that in aid of her arguments about the pool of assets. The matters calling for an adjustment are:
- The overwhelming factor is the difference in the incomes and income earning capacities of the parties. In this regard some of the arguments made on behalf of the wife in relation to future share options and other benefits serve to show that the difference is understated;
- The husband has a substantial financial resource in the form of frequent flyer points;
- The husband enjoyed a different lifestyle after separation, compared to the parties’ lifestyle during the marriage. It is an agreed fact that the husband insisted that the wife exercise financial restraint during her stewardship of the family finances and more so, after he took over those responsibilities. His lifestyle expenditure after separation is in stark contrast to those restrictions;
- Of the parties, only the husband has any prospect of making a reasonable provision for his retirement;
- The husband has a new partner. Ms [N] is presently on leave but intends to return to paid employment in 2011, albeit part-time. She has a significant income prior to leaving work to give birth to [L];
- The children live for a greater proportion of time with the wife. [P] will soon be 18. She, alone of the children lives mostly with the husband. As she moves into a more independent phase of her life, the balance of time the children spend between the parents will swing more to the wife;
- The events of the marriage enhanced the husband’s earning capacity and diminished that of the wife.
- Both parties seek an adjustment in favour of the wife. The husband argues that there should be an adjustment of 5 per cent-10 per cent in her favour. He does that, of course, in aid of an argument that there be an equal division overall. The wife argues for an adjustment of 15 per cent. She does that in aid of her arguments about the pool of assets. The matters calling for an adjustment are:
- Although the husband’s new partner had a taxable income of $80,000 - $85,000 in 2009, and planned to return to paid employment 2-3 days per week in 2011 (par 223), the trial Judge does not appear to have placed any significant reliance upon, or needed to place any significant reliance upon that factor in support of the s 75(2) adjustment which he concluded to be appropriate. The trial Judge’s approach to that topic may have been somewhat generous to the husband, but that is not a matter about which we need express any conclusion.
- We have earlier, at paragraphs 42 and 43, referred to the judgment of Brennan J in Norbis (supra) at pages 539 – 540. Whilst others may permissibly have determined a smaller s 75(2) adjustment to be appropriate, we are not persuaded that the trial Judge erred in concluding as he did with respect to s 75(2). It has not been demonstrated that his Honour’s conclusion with regard to s 75(2) was “plainly wrong” (see Norbis (supra), Gronow v Gronow [1979] HCA 63;(1979) 144 CLR 513 and CDJ v VAJ (supra)). Nor did his Honour’s determination of that issue exceed “the generous ambit within which reasonable disagreement is possible” (see Norbis (supra)). These challenges fail.
Ground 8
- Ground 8 provided:
- That the Trial Judge was in error in law in adding back the legal costs paid by the Husband in such circumstances where these costs were paid from income earned after separation.
- Counsel for the husband conceded that, if the challenge to the adding back of the husband’s paid legal fees failed, the figure appropriate to have been added back with respect to the wife was $47,206.06. The trial Judge added back $39,157.18 for the wife’s paid legal fees.
- As articulated by his Counsel, the husband’s challenge to the add-back of paid legal costs of the husband of $77,292.15 had two bases. The first was that the trial Judge proceeded on the erroneous basis that the husband had sought that such sum be added back to the list of assets (par 115). It is convenient to deal first with that challenge.
- It is not in dispute that the husband had in fact paid $77,292.15 in legal fees. The appropriateness of adding back that sum is the issue. It was fairly conceded by Counsel for the wife that the trial Judge had erred in recording that the husband sought to have his paid legal fees added back. The husband had at all times opposed so doing.
- As the trial Judge proceeded on the erroneous basis that the husband sought to have his paid legal fees added back to the list of assets, it is unsurprising that his Honour’s reasons do not engage in detail with that topic.
- Counsel for the wife submitted that, even though the trial Judge had proceeded on a mistaken belief as to the husband’s position with respect to his paid legal fees, it was nevertheless open to his Honour to have concluded that his legal fees in that sum be added back.
- Without resiling from his primary position that the husband’s paid legal fees should not have been added back, Counsel for the husband submitted in the alternative that, if it was appropriate to add-back the husband’s paid legal costs, that was a matter “which the trial Judge should have considered in his assessment of the parties’ contributions for which the husband should have been given credit”. The factual basis of Counsel for the husband’s opposition to the adding back of his paid legal costs was that they had been paid from income earned by the husband after separation.
- Counsel for the wife disputed the contentions of Counsel for the husband on a number of bases. In essence, it was submitted that the evidence did not establish that the husband’s legal fees had necessarily been paid from income, or that, to the extent that they were or might have been, the husband’s far greater financial resources, from income or capital, in the post-separation period rendered adding them back appropriate. That was submitted to be particularly so in circumstances where, from the realisation of capital in the post-separation period, the wife’s paid legal fees of $39,157.18 in respect of which $47,206.06 was conceded, was uncontroversially added back.
- Counsel for the wife submitted that after separation the husband had sold shares and investments held by the parties at separation comprising:
- ...
| ADDBACKS | ||||
| Ownership | Description | Wife’s Value | Husband’s value | |
| ... | ||||
| 13 | Husband | Sale of IAG shares (2009) | 7,950.00 | |
| 14 | Husband | Sale of Resmed shares (2009) | 17,149.00 | |
| 15 | Husband | Sale of [F Corporation] shares (August 2009) | 404,697 | |
| 16 | Husband | Sale of [F Corporation] shares (July 2010) | 162,961.52 | |
| 17 | Husband | Sale of APG shares (not known when sold) | 458 | |
| 18 | Husband | Sale of VPG (not known when sold) | 1,003 | |
| 19 | Husband | Sale of OZL (not known when sold | 14,616 | |
| 20 | Husband | Sale of AWE | 5,727.00 | |
| 21 | Husband | Sale of KZL (not known when sold) | 2,550.00 | |
| 22 | Husband | Sale of MCR (not known when sold) | 7,619.00 | |
| 23 | Husband | Sale of PAN (not known when sold) | 10,167.00 | |
| 24 | Husband | Sale of BPT (not known when sold) | 6,890.00 | |
| 25 | Husband | Sale of IMD (not known when sold) | 1,992.00 | |
| 26 | Husband | Sale of JML (not known when sold) | 1,607.00 | |
| 27 | Husband | Sale of MLC Income Builder (December 2009) | 56,556.00 | |
| 28 | Husband | Sale of Perpetual Investments (December 2009) | 42,481.00 | |
| 29 | Husband | Sale of Fortis (December 2009) | 25,686.00 | |
These sales totalled $770,109.52.
- It was submitted that the husband had received a tax refund of $10,089.78 with respect to the income tax year ended 30 June 2008 after the parties’ separation. Reliance was also placed upon evidence of the husband:
MR GIVNEY: And what have you drawn out of the facility?
MR [KASIOPOULOS]: Well, I’ve drawn out different sums to pay different bills that have come up.
MR GIVNEY: But you – when you – you withdrew money from the loan facility. Did you put it into your savings account?
MR [KASIOPOULOS]: Yes, I would redraw - it goes automatically into your savings account when you redraw from your home loan.
- In the taxation report prepared by Mr Y, with respect to shares sold, the following was recorded:
- In August 2009, Mr. [Kasiopoulos] sold 8,998 [F Corporation] Shares in an arm’s length transaction. Based on the schedule prepared by Mr. [Kasiopoulos], the 8,998 Shares sold comprised:
- 3,748 Shares from the 2005 EP award;
- 3,000 Shares from the 2006 EP award;
- 1,000 Shares from the 2006 RS award;
- 1,000 Shares from the 2007 RS award; and
- 250 Shares from the 2008 RS award.
- In July 2010, Mr. [Kasiopoulos] sold 3,329 [F Corporation] Shares in an arm’s length transaction. Based on the schedule prepared by Mr. [Kasiopoulos], the 3,329 Shares sold comprised:
- 1,829 shares from the 2007 EP award;
- 500 Shares from the 2006 RS award;
- 500 Shares from the 2007 RS award;
- 250 Shares from the 2008 RS award;
- 250 Shares from the 2009 RS award.
- In August 2009, Mr. [Kasiopoulos] sold 8,998 [F Corporation] Shares in an arm’s length transaction. Based on the schedule prepared by Mr. [Kasiopoulos], the 8,998 Shares sold comprised:
(Footnote omitted).
- Counsel for the wife asserted that the evidence of the husband was that his income went into his savings account, as was a bonus received by the husband in March 2009 which related to the financial year ended 2008, and relied upon the following exchange:
HIS HONOUR: So the bulk of the reductions were caused by the savings?
MR [KASIOPOULOS]: No, the bulk of the reductions were caused by – so I would get – at the end of the year, you would get allocated a bonus based on performance for the previous year.
- Counsel for the wife also relied upon the following exchange:
MR GIVNEY: I see. So do you remember how much you received in the hand out of the 127,000?
MR [KASIOPOULOS]: I don’t remember that exact amount because when it was paid, it was paid in as a normal payroll month. So my normal pay went through as well as the bonus payment going through. So it was a lump sum and I think it was – with my income and the bonus, it was around the $76,000 mark, seventy something thousand dollars.
MR GIVNEY: Now, when you were paid that month, did it go into a particular account that your pay went into?
MR [KASIOPOULOS]: It just goes into my savings account, yes.
MR GIVNEY: Into your savings account?
MR [KASIOPOULOS]: I only have the one account.
MR GIVNEY: Thank you.
...
MR GIVNEY: Okay. So it might have been the case, might it, that there was already $15,000 to the credit of your savings account when the 70,000-odd hit it from the bonus and your wages that month?
MR [KASIOPOULOS]: Look, I wouldn’t know what the balance was at that time.
MR GIVNEY: You wouldn’t know?
MR [KASIOPOULOS]: Sorry.
MR GIVNEY: Okay. Anyway, it’s an account, isn’t it, that you just draw out of from time to time to pay all your expenses?
MR [KASIOPOULOS]: It’s my only account.
- It was accordingly submitted by Counsel for the wife that:
- ... monies received by the Appellant from the sale of assets accumulated during the course of cohabitation were paid into the savings account, the home loan facility, withdrawn from the home loan facility and paid bills. The Appellant does not differentiate particular funds being allocated from “income” for the payment of legal fees. The Respondent submits that the Appellant cannot maintain a position where legal fees were paid from income post separation.
- Whilst, as we have earlier recorded, the trial Judge misdirected himself in relation to this issue, we are not persuaded, having regard to the evidence to which we have been referred, that his Honour was necessarily thereby led into error, and “plainly wrong” in principle in adding back the husband’s paid legal fees. That is particularly so given that his Honour added back the wife’s paid legal fees, on the basis that “the source of the funds (from which they were paid) was the sale of joint assets” (par 117). That however is not the end of this issue.
- Counsel for the husband submitted that the husband’s assertion that the legal fees were paid from his income had not been challenged at trial. The cross-examination of the husband, upon which his Counsel relied, reveals:
MR GIVNEY: Mr [Kasiopoulos], could you look at this document for me. It’s a document you may not have seen before, but do you see that it purports to be a notification of the moneys that you have been billed for costs and how much you have paid?
MR [KASIOPOULOS]: Legal fees, yes.
MR GIVNEY: Yes, and you will see that there’s some figures that are highlighted. If you could look on the first page, I think it’s a figure of about 46-odd thousand - - -?
MR [KASIOPOULOS]: 55, yes.
MR GIVNEY: Yes, and is it the case that you have paid that amount to your solicitors?
MR [KASIOPOULOS]: That’s correct.
MR GIVNEY: And then there’s a – further down the page, I think, to my memory, it’s a figure of about 19-odd thousand dollars?
MR [KASIOPOULOS]: That’s correct.
MR GIVNEY: And you paid those moneys to your solicitors?
MR [KASIOPOULOS]: Yes, I have.
MR GIVNEY: And then over the page, there’s a figure highlighted which I can’t remember. I think it’s about 11,000; is that right?
MR [KASIOPOULOS]: Yes, 11,050.
MR GIVNEY: Is that an amount that you have paid to your solicitors?
MR [KASIOPOULOS]: That probably is correct as a total of those numbers, yes. I think the fees for Thos Hodgson is – was in two parts. So I don’t recognise the 3977, but it was probably in total.
MR GIVNEY: And further down the page, you will see that there’s an estimate of legal fees?
MR [KASIOPOULOS]: Yes.
MR GIVNEY: For the trial?
MR [KASIOPOULOS]: Yes.
MR GIVNEY: Do you remember if you have paid any moneys in the last seven days to your solicitors?
MR [KASIOPOULOS]: I haven’t paid any moneys to my solicitors in the last seven days.
MR GIVNEY: Right. Is it the case then that your understanding is that the three payments that I have taken you to that are highlighted are the moneys that you have paid to your lawyers?
MR [KASIOPOULOS]: That’s correct.
MR GIVNEY: I seek to tender that document, your Honour.
MR HODGSON: No objection.
HIS HONOUR: Exhibit 1.
EXHIBIT #1 NOTIFICATION OF MONEYS PAID FOR LEGAL COSTS
- The re-examination of the husband upon which his Counsel also relied, reveals:
MR HODGSON: Sir, I think you agreed with my learned friend that you had now, having a look at that document, paid legal costs of some $77,292.15, right?
MR [KASIOPOULOS]: Yes, that’s correct.
MR HODGSON: Can you tell us what the source – where did the money come from to pay those legal fees?
MR [KASIOPOULOS]: That was my income and sometimes the bonuses that I got paid.
MR HODGSON: And the bonuses you got paid?
MR [KASIOPOULOS]: Potentially. I mean, it just depended. They all went into one account so it would come from whatever income I earned.
MR HODGSON: I see and when were those bonuses paid? Before or after separation?
MR [KASIOPOULOS]: No, this is all after separation.
MR HODGSON: Thank you. So if that document can go back to his Honour now. Thank you.
- We are satisfied that, notwithstanding the matters to which Counsel for the wife referred us, the husband’s allegations with respect to the source of the $77,292.15 paid by him in legal fees does not seem to have been challenged. The trial Judge did not add-back those monies on the basis which Counsel for the wife submitted that his Honour had, or could have added them back. Although the trial Judge could have added back the husband’s paid legal fees, notwithstanding that they were paid out of income, having not done so on that basis, we feel obliged to uphold this complaint.
Ground 9
- Ground 9 provided:
- That the Trial Judge was in error on the evidence in failing to add back the entirety of the legal costs paid by the Wife in circumstances where the source of payment of such costs was assets which were in her possession or under her control at the time of separation.
- It was fairly conceded by Counsel for the wife, that the trial Judge having added back the totality of the husband’s paid legal fees, his Honour should have added back $47,206.06 with respect to the wife’s paid legal fees.
- We need not address this ground any further.
Ground 10
- Ground 10 provided:
- That the Trial Judge was in error on the evidence in finding that the Wife used a sum of $18,000 to buy furniture and in failing to add back this sum of money which was withdrawn by the Wife from various mortgage loan accounts post-separation thereby increasing the liabilities of the parties.
- The submission of Counsel for the husband in support of this Ground was:
It is submitted that as the Wife had withdrawn the total amount of $18,000.00 by drawing down $13,000.00 on the home loan and drawing down $5,000.00 on the investment account to purchase furniture after the time of separation, that this amount should be added back on the Wife’s side of the ledger. There has not been a corresponding credit to offset the increased liability. It is submitted that this amount has not been included as “Furniture” in the net asset pool.
- In oral submissions, Counsel for the husband referred to the trial Judge’s reasons with respect to this topic, which recorded:
- The wife says she drew $13,000 on the home loan and applied those moneys to the purchase of furniture. It is the husband’s case that that advance should be treated as an advance to the wife and added back to the pool as a notional asset. In the context of a case whereby the husband has had the use of much of the parties funds after separation and seeks that the Court take an approach whereby the relevant pool is fixed as at the date of the hearing, it is at least, inconsistent, that he asks that this amount be added back. The wife says she spent those moneys of [sic] furniture. The wife brings her furniture to account in the proposed balance sheet. Consistently with the overall approach I have indicated, I will not include this item in the list of assets on the wife’s side of the ledger.
- Counsel for the husband submitted that, in her financial statement sworn 16 July 2009, the wife disclosed household contents of $15,000. It was submitted that statement was sworn prior to the wife drawing down the $13,000 on the mortgage over the former matrimonial home. In fact, the wife had drawn down the funds in May or June 2008. Her financial statement was not inconsistent with having purchased the household contents from the monies drawn down by her.
- Counsel for the husband submitted that in her August 2010 financial statement that the wife also disclosed household contents of $15,000. In her affidavit sworn 17 July 2009 the wife deposed:
- I had also withdrawn $5000 cash from [a bank] Term Deposit that I had on 6 August 2009 [sic] as I needed to purchase a new bedroom suite for [P]. I had a conversation with the [sic] [P] and said words to the effect “I’m going to buy you a new bed, does dad need your single bed as I wont need it and it will help him out?”. [P] informed me that she asked the Applicant and he responded “No I don’t need it”. [P] and I subsequently arranged to go and buy a new bed together.
- On 14 August 2008 the Applicant took the $5,000 cash that I had at home as well as [P’s] bedroom suite. He also removed a lot of the furniture and our house looked as though someone had broken into it. [P] was left without a bedroom suite for 4 weeks. I was left with no other choice but to go and replace some of the furniture taken, as well as a new bedroom suit [sic] for her at a cost of $8,000. The children were extremely distressed about the Applicant leaving us with no furniture.
- The balance of the Term Deposit, being $15,000 has since been spent on $8,000 to replace the furniture and the remainder on living expenses.
...
- In around September 2008 as indicated in paragraph 97 above, the Applicant sold the Resmed shares and placed approximately $17,000 into our investment loan. I withdrew $5,000 from the investment loan to replace the $5,000 that the Applicant took from the home on 14 August 2008. The balance of the money I took from the loan was $13,000.
- The wife annexed to her affidavit sworn 16 July 2010 the transcript of the proceedings before the Court on 29 October 2009. During cross-examination of the wife the following was revealed:
MR FERMANIS: Sorry, I apologise for that. You say in your affidavit:
As I was in a difficult financial position I withdrew $13,000 from our mortgage account which we had made extra payment towards.
That’s correct, isn’t it?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: Okay. Now, you had $7000 in your personal savings?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: And you had $13,000?
MS [GARAPIPERIS]: That’s right.
MR FERMANIS: And you say that you were in a difficult financial position; that’s correct, isn’t it?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: And you needed to pay for household bills?
MS [GARAPIPERIS]: That’s right.
MR FERMANIS: And you needed other expenditures for the children?
MS [GARAPIPERIS]: Mm.
MR FERMANIS: This is after my client had left you?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: Now, you then say in your affidavit:
I put these funds into [a bank] term deposit with the balance of $20,000 for 90 days.
MS [GARAPIPERIS]: Yes.
MR FERMANIS: So you needed the money?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: At the time, it’s correct to say?
MS [GARAPIPERIS]: I didn’t need them specifically at that moment. I just knew that I – I forecasted that I would need them in the future and, as an astute accountant, I just thought if I put them in the term deposit as opposed to having them in my account, I would earn some interest as well.
MR FERMANIS: But at the time when you said, “I was in a difficult financial position” when you withdrew the $13,000?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: that’s not entirely accurate now, is it?
MS [GARAPIPERIS]: Well, no, because I was actually working full-time but I was just thinking long term.
MR FERMANIS: But at the time you weren’t in a difficult financial position, were you?
MS [GARAPIPERIS]: No.
MR FERMANIS: I see, and subsequently you have now given evidence that you work part-time?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: In your affidavit you say that – I will read it out.
THE J.REGISTRAR: Which paragraph?
MR FERMANIS: Paragraph 94, Judicial Registrar.
MR FERMANIS: You say that:
Upon separation the applicant immediately removed [J] and [C] from our insurance policy.
MS [GARAPIPERIS]: Our health insurance, yes.
MR FERMANIS: Your health insurance policy, and it’s fair to say that in or about that time you were having discussions with the Child Support Agency in relation to obtaining child support?
MS [GARAPIPERIS]: Around June, yes.
MR FERMANIS: And it’s fair to say that when you approached the Child Support Agency you notified an agent that you had primary care of [J] and [C]; that’s correct, isn’t it?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: So it’s fair to say then that the reason that the applicant removed [J] and [C] from your health insurance policy is because he no longer had primary care of the children?
MS [GARAPIPERIS]: But they’re still his children.
MR FERMANIS: But nevertheless he no longer had primary care of the children, you did?
MS [GARAPIPERIS]: So if they were to fall ill, is he not going to worry about it? I’m sorry. Yes, I did.
MR FERMANIS: At paragraph 97 of – I withdraw that. Excuse me one moment, Judicial Registrar.
MR FERMANIS: You received a text message from the applicant saying that:
You will need to start contributing for half of the interest on our investment loan which is approximately $1200 per month because I cannot afford to pay this on my own.
MS [GARAPIPERIS]: That’s right; that was about August 2008.
MR FERMANIS: That’s correct, and your view was that because you were paying all of the household expenses, you thought that this was fair?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: But you say that you couldn’t afford to pay for the interest?
MS [GARAPIPERIS]: No.
MR FERMANIS: You couldn’t afford the interest to help out?
MS [GARAPIPERIS]: That’s right.
MR FERMANIS: Thank you. Now, you’re aware that the applicant sold some shares in ResMed?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: And he put that money towards the $300,000 line of credit?
MS [GARAPIPERIS]: There was – he – I’m presuming he put that in an account and was using the funds to pay the interest monthly.
MR FERMANIS: And he did that because – I withdraw that. And that was to pay the interest, as you say, wasn’t it?
MS [GARAPIPERIS]: Yes, I presume.
MR FERMANIS: And did you withdraw any of the funds from that deposit?
MS [GARAPIPERIS]: I will have to explain that in length, if I may, your Honour.
THE J. REGISTRAR: Well, answer the question first?
MS [GARAPIPERIS]: Yes, I did.
MR FERMANIS: You did. How much did you withdraw?
MS [GARAPIPERIS]: Five thousand.
MR FERMANIS: So you withdrew $13,000 from the mortgage?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: And you’ve produced a document outlining what you spent that $13,000 on?
MS [GARAPIPERIS]: I actually only had a balance of eight because 5000 cash was taken from my house by the applicant, which is the reason why I state it’s only 13.
MR FERMANIS: So you say he took $5000 from you?
MS [GARAPIPERIS]: Yes. I actually went to the police and I have an outline of discussions with them as well.
MR FERMANIS: But no charges were laid, were there?
MS [GARAPIPERIS]: No, because it’s his home as well – his house, sorry.
MR FERMANIS: And his money?
MS [GARAPIPERIS]: And mine.
MR FERMANIS: Jointly?
MS [GARAPIPERIS]: Yes, jointly.
MR FERMANIS: Which you’d withdrawn?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: Or you say you withdrew. Now, this $5000, you kept it in cash on the property, you say?
MS [GARAPIPERIS]: I had just withdrawn it on the Thursday and I was going to use it to buy furniture for my eldest daughter, which I had a discussion with her.
MR FERMANIS: At the time, did you have a credit card?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: And I gather you had available credit on your credit card?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: Why didn’t you use your credit card to pay for the furniture?
MS [GARAPIPERIS]: Because I was going to purchase the furniture and then put the 5000 towards the credit card.
MR FERMANIS: But having 5000 – it’s fair to say that it’s not safe to have $5000 around the house, is it?
MS [GARAPIPERIS]: Well, we have an alarm.
...
MR FERMANIS: And you have the capacity to work, say, on a full-time basis?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: And on a full-time basis, being the office manager, what would your wage be if you worked full-time?
MS [GARAPIPERIS]: About 63,000.
MR FERMANIS: And that 63,000, that’s gross income?
MS [GARAPIPERIS]: Gross, yes.
MR FERMANIS: And there’s nine per cent superannuation on top?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: So that would take – it’s fair to say that you are able to earn $70,000?
MS [GARAPIPERIS]: Well, the nine per cent I wouldn’t see until I’m 65.
MR FERMANIS: No, of course?
MS [GARAPIPERIS]: So 63,000, yes.
MR FERMANIS: Are there any benefits associated with working for your employer? Do they provide you with a car?
MS [GARAPIPERIS]: No.
MR FERMANIS: Do they provide you with a mobile phone?
MS [GARAPIPERIS]: No.
...
MR FERMANIS: I’ll turn to the $13,000 that you say you spent on [P’s] bed, [P’s] mattress, [P’s] bedside table. Now, you withdrew the money not long after you separated; that’s correct?
MS [GARAPIPERIS]: That’s right.
MR FERMANIS: And you spent some of the money on looking after the pool?
MS [GARAPIPERIS]: The pool had turned green, yes. It needed desperate resuscitation.
MR FERMANIS: Now, you bought a bed for – I presume it’s for – you spent $268.29
MS [GARAPIPERIS]: Yes, for
MR FERMANIS: from Sheridan. They’re bed sheets?
MS [GARAPIPERIS]: For [P], yes.
MR FERMANIS: For [P]. I see. When did you withdraw the money again, the $13,000?
MS [GARAPIPERIS]: I don’t recall the exact date.
MR FERMANIS: And it was in a bank account for 90 days; that’s correct, isn’t it?
MS [GARAPIPERIS]: It was in a – the 8000 was. I withdrew the 5000 earlier to buy [P] the furniture that she needed.
MR FERMANIS: And that’s the money you say that was in cash that the applicant took?
MS [GARAPIPERIS]: That’s right.
MR FERMANIS: And the other $5000 was from a subsequent withdrawal, wasn’t it?
MS [GARAPIPERIS]: Yes.
MR FERMANIS: From the line of credit. Just when you say that you needed this 13,000 immediately, I suggest to you that there was no urgency in you needing the $13,000, was there?
MS [GARAPIPERIS]: No. As I said, I was forecasting financial security for myself and my children.
MR FERMANIS: Now, you’ve given that evidence that you were forecasting financial security because of your background?
MS [GARAPIPERIS]: Yes. ...
- Although we accept that the issue is not entirely without uncertainty, we are not persuaded that it was not reasonably open to the trial Judge to conclude as he did in relation to the funds withdrawn or drawn by the wife subsequent to the parties’ separation.
- The complaint in relation to the $5,000 cash can be simply disposed of.
- The trial Judge found:
- In mid August 2008 the husband commenced renting a property at [K]. On 14 August 2008 the husband entered the [B property] home with his brother and removed furniture, including $5,000 in cash which the wife had hidden in a hall stand.
That finding of fact has not been challenged by the husband.
- This ground has not been established.
CONCLUSION
- The challenge of the husband with respect to the $77,292.15 add-back succeeds.
- Sensibly, the parties asked this Court to re-exercise the trial Judge’s discretion in relation to this topic.
- The evidence before the trial Judge in relation to the funds available to the husband in the post-separation period, from capital and income to which we have earlier referred is in our view sufficient to justify adding back the husband’s paid legal fees in the sum of $77,292.15. This is particularly so given that the wife’s paid legal fees of $47,206.06 should be added back. The evidence reveals the wife to have received materially less income or capital than the husband did in the post-separation period.
- We are able to re-exercise the trial Judge’s discretion. The effect of so doing is that the husband is entitled to 30 per cent of the difference between $47,206.06 and the sum of $39,157.18 upon which the trial Judge relied. The wife accordingly owes the husband $2,414.66 and we will so order, by varying the sum to which she is entitled from the husband pursuant to the trial Judge’s orders.
COSTS
- Counsel for the husband submitted that, if the appeal were allowed, the wife should pay the husband’s costs.
- We do not agree that the trial Judge’s error, to which the wife has not been shown to have caused or contributed to, should be visited upon the wife.
- A costs certificate for each party would be appropriate.
I certify that the preceding one hundred and eleven (111) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Coleman, Thackray & Stevenson JJ) delivered on 21 June 2012.
Associate:
Date: 21 June 2012
