AARON & JENKINS
[2017] FamCA 414
•4 May 2017
FAMILY COURT OF AUSTRALIA
| AARON & JENKINS | [2017] FamCA 414 |
| FAMILY LAW – PROPERTY – De facto - Application for an adjustment of property by applicant in circumstances where parties agree there was a de facto relationship for the purposes of Part VIIIAB of the Family Law Act 1975 (Cth) | |
| Family Law Act 1975 (Cth) ss 4AA(1),(2),(3),(4) and(5), 31(1)(a) and (aa), 90SB | |
Family Law Amendment (De Facto Financial Matters & Other Measures) Act 2008 (Cth) s 4(1)
| Stanford v Stanford [2012] HCA 52, (2012) 293 ALR 70 |
Bevan & Bevan (2013) FLC 93-545
Chapman and Chapman [2014] FamCAFC 91
| APPLICANT: | Mr Aaron |
| RESPONDENT: | Ms Jenkins |
| FILE NUMBER: | LNC | 653 | of | 2015 |
| DATE DELIVERED: | 4 May 2017 |
| PLACE DELIVERED: | Launceston |
| PLACE HEARD: | Launceston |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | 9 November 2016 and 15 February 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mrs Mooney |
| SOLICITOR FOR THE APPLICANT: | O'Rourke & Kelly |
| COUNSEL FOR THE RESPONDENT: | In person |
| SOLICITOR FOR THE RESPONDENT: |
Orders
Ms Jenkins (‘the respondent’) shall pay to Mr Aaron (‘the applicant’) the sum of $3,113 within ninety (90) days from the date of this order.
Upon such payment referred to above:-
a.the respondent is entitled against the applicant to retain the whole of her legal and equitable interest in B Street, Suburb C Queensland (‘the Queensland property’) subject to the mortgages to D Mortgage totalling about $213,520;
b.the respondent shall indemnify the applicant in relation to those mortgages; if there are any personal covenants given by the applicant in respect of those mortgages the respondent shall within the period of ninety (90) days provide a release to the applicant in regard to any such personal guarantees; and
c.in the event that the respondent does not pay to the applicant the sum of $3,113 within ninety (90) days from the date of this order and secure his release, if needed, from the mortgage/s secured over the Queensland property, then:-
i.The respondent shall sign all documents and authorities to list the Queensland property for sale within two weeks from the written request of the applicant.
ii.The Queensland property will be listed for sale through a real estate agent agreed by the parties and in the event that they are unable to agree then through a real estate agent nominated for the purpose of sale by the President of the Real Estate Institute of Queensland at the request of either party and the solicitor acting on the sale as agreed between the parties and in the event the parties are unable to agree then with a solicitor appointed for that purpose by the President of the Law Society Queensland at the request of either party.
iii.The Queensland property is to be sold by auction with a reserve price of $525,000 and on settlement of the sale of the Queensland property the proceeds to be paid as follows:-
1.in payment of real estate agents fees, legal costs and disbursements on the sale and any costs associated with nominating a solicitor and/or a real estate agent for that sale;
2.any adjustment of council rates and water rates;
3.the amount payable under the mortgage of $213,520 or thereabouts including any arrears of principal and interest;
4.the amount due to the applicant pursuant to the above orders together with interest on that sum in accordance with the Family Law Rules 2004 (Cth) calculated as and from ninety (90) days from the date of these orders; and
5.the balance to the respondent.
iv.In the event that the respondent is liable to capital gains tax on the proceeds of sale of the Queensland property and it is assessed as part of her income tax in the financial year in which the Queensland property is sold, the applicant shall pay to the respondent the sum of 10 per cent of such capital gains tax within one month of the respondent forwarding to him a declaration from her accountant attaching a copy of the taxation return, a copy of the assessment of the tax and the 10 per cent to be applied to the tax which the accountant reasonably certifies is attributable to the capital gain on the sale of the Queensland property.
As to the debt in of sum of $17,000 (the ‘$17,000 debt’) and the $10,000 debt due by the applicant to Ms Jenkins (‘the respondent’s mother’):-
a.within three (3) months from the date of this order the respondent shall pay and be responsible to pay the $27,000 debt to her mother and/or shall otherwise secure a release of that debt in favour of the applicant; and
b.the respondent shall indemnify the applicant in relation to any claim that the respondent’s mother shall make against him in relation to both the $17,000 debt and $10,000 debt.
A declaration is made that the business partnership as between the applicant and the respondent was terminated as and from 24 November 2014.
Save as has been ordered in these orders, the applicant shall indemnify the respondent in relation to any other liabilities incurred by the partnership between 26 January 2014 and 1 January 2015.
The Order made by Judge McGuire on 6 June 2016 as remains in force regarding a Motorcycle 1 is discharged by virtue of this order.
Within twenty one (21) days from the date of this order the applicant and respondent will sign all documents and authorities to direct the payment of the funds totalling about $2,653 with Bendigo Bank (joint account ending in number 6224) to pay 90 per cent to the respondent and 10 per cent to the applicant.
As against the respondent the applicant shall be declared as the sole owner of the property referred to below and he shall be liable for the debts referred below and shall indemnify the respondent in respect of such debts namely:-
Applicant’s property
a.Motorcycle 2;
b.Motorcycle 3;
c.Motorcycle 4;
d.Motorcycle 5;
e.Motorcycle 6;
f.Motorcycle 7;
g.Motorcycle 1;
h.Tools in his possession with a the value of about $1,000;
i.Welder;
j.The applicant’s current car in his possession;
k.The applicant’s household contents in his possession;
l.Motorcycle 8; and
m.Bendigo bank accounts ending with numbers…97 and …48.
Applicant’s debts
n.MyState overdraft of about $1,980;
o.Loan from applicant’s father of about $10,000;
p.Loan Mr E of about $5,000;
q.Upholstery debt of about $154;
r.Mr F alleged debt of about $1,500; and
s.Mr G alleged debt of about $3,500.
As against the respondent, the applicant shall be entitled to his interest in his Q Superannuation entitlements with an accumulated value of about $88,979.
Except as otherwise provided in these orders the respondent shall be entitled as against the applicant to the property referred to as ‘the respondent’s [named] possessions’ in Exhibit A3 in these proceedings, namely:-
a.Utility;
b.Vintage car;
c.Beach buggy;
Motorcycles:-
d.Motorcycle 9
e.Motorcycle 10
f.Motorcycle 11
g.Motorcycle 12
h.Motorcycle 13
i.Motorcycle 14
j.Motorcycle 15
k.Motorcycle 16
l.Motorcycle 17
m.Motorcycle 18
n.Motorcycle 19
o.Motorcycle 20
p.Motorcycle 21
q.Motorcycle 22
r.Motorcycle 23
s.Motorcycle 24
t.Motorcycle 25
Other property
u.Forklift [sic];
v.Tools in the respondent’s possession;
w.Credit Union Australia account ending with numbers 8180 Bendigo Bank account ending with numbers 8431; and
x.Household contents in the possession of the respondent.
As against the applicant, the respondent shall be entitled to her interest in superannuation entitlements totalling the agreed sum of about $123,619.
The respondent shall be responsible for the amount due in respect of the mortgages over the Queensland property totalling about $213,520 and shall indemnify and keep indemnified the applicant in respect of same.
That unless otherwise specified in these orders:-
a.each party be solely entitled to the exclusion of the other to all property, including choses-in-action, in the possession of such party as at this date;
b.each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other;
c.all insurance policies to become the sole property of the beneficiary named therein; and
d.each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
All extant applications be dismissed.
All subpoenaed documents be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same.
All extant applications be dismissed except costs applications, if any, which are to be dealt with in accordance with the Family Law Rules 2004 (Cth).
IT IS CERTIFIED
Pursuant to Rule 19.50 of the Family Law Rules 2004 (Cth) it was reasonable to engage counsel to attend.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Aaron & Jenkins has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT LAUNCESTON |
FILE NUMBER: LNC 653 of 2015
| Mr Aaron |
Applicant
And
| Ms Jenkins |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
This is a property dispute between Mr Aaron (‘the applicant’) and Ms Jenkins (‘the respondent’). It arises out of their relationship, which commenced in about 2002/2003 and ended in January 2014. The parties concede they were in a de facto relationship over that period of time and such de facto relationship was within the definition contained in the Family Law Act 1975 (Cth) (‘the Act’).
The parties agree that the relationship broke down in January 2014 and consequently this Court has jurisdiction to entertain the applicant’s property application.
The parties have a modest pool of assets totalling well under $500,000. In addition there are superannuation assets, which were primarily accumulated in terms of contributions shortly after they commenced cohabitation.
There were significant issues in relation to their business and the circumstances of the business at around and following the break-up of their relationship. Neither party sought to value the business and each of them retained assets from the business. As I will detail later, very little hinges on this issue except in terms of contributions to which I have had regard and with which I have dealt later.
The primary issue is how the property should be divided where there were overwhelmingly larger contributions by the respondent at the commencement of the relationship and where, as can be seen later, I have determined that there have been far greater contributions by her during the course of the relationship. Given the circumstances of these parties, I have made a small adjustment for the other factors.
It was the applicant’s case that the property ought to be divided as to 40 per cent to the applicant and 60 per cent to the respondent. The respondent’s initial position was as to 90 per cent to her and 10 per cent to the applicant, and then later as to 100 per cent to her.
BACKGROUND
The applicant is aged 56 and nominates his occupation as a driver. He is currently not in full time paid employment. He has some health difficulties to which I have had regard, although no objective medical evidence was adduced. He has re-married and lives with his present wife and her adult son in Victoria.
The respondent is aged 53 and she runs a business, which is substantially that business which has been run by the parties prior to their separation.
There is an issue as to the date of commencement of cohabitation. It commenced in either December 2002 or August 2003. At about that time the respondent owned B Street, Suburb C, Queensland (‘the Queensland property’) and the parties lived in that property until their move to Tasmania.
Each of the parties brought into the relationship their accumulated superannuation funds. They added little to it subsequent to cohabitation apart from the ordinary growth of such funds. Each party has retained their individual funds.
The parties lived in the respondent’s home in Queensland until late 2003 or early 2004 and then they moved to Tasmania where they started a business. This business provided a modest income for the parties, although over the years it needed assistance of loans secured against the Queensland property.
In Tasmania, the parties lived in the house owned by Ms Jenkins Snr (‘the respondent’s mother’) and I am satisfied that this provision of accommodation was a significant support for the parties over many years. I have had regard to that in the assessment of contribution. At the end of the relationship the business was operated out of a property owned by the respondent’s mother.
These proceedings were initially commenced in the Federal Circuit Court and were listed for hearing before a Judge of the Federal Circuit Court in October 2016.
Unfortunately, the matter could not be reached in that court but there was a gap in my list and the matter was transferred for me to hear and determine.
At one stage the respondent’s mother was a party to the proceedings, however, there was no issue that there were two debts due to her. The issue was which of the parties ought to be responsible for all or parts of the debts. As such the respondent’s mother was removed as a party before the trial commenced. On the first day of hearing the respondent’s mother gave evidence and was cross-examined and her evidence was completed.
The applicant gave evidence and was cross-examined on the same day. By that time it was late in the evening and the proceedings were adjourned part heard to December 2016.
Due to health issues of the respondent the December 2016 date was abandoned and the proceedings were completed on the 15 February 2017.
The respondent was given leave to adduce evidence in relation to her medical condition.
It was an agreed position that neither party sought a splitting order in relation to their respective superannuation funds and that each party would retain their superannuation accounts. These funds were primarily accumulated by them prior to cohabitation save the capital and interest growth since that time.
In these reasons any statement of fact is to be regarded as a finding of fact unless the contrary is clear from the context.
THE EVIDENCE
The applicant tendered in evidence the following:-
(a)Exhibit A1 - his case outline;
(b)Exhibit A2 – the annexures to his affidavit; and
(c)Exhibit A3 - the agreed list of assets and liabilities with the exception of the liabilities to the respondent’s mother and the items allegedly not available and referred to as ‘other’ in Exhibit A3.
The respondent tendered in evidence the following:-
(a)Exhibit R1 - her case outline;
(b)Exhibit R2 - the statement of Ms H;
(c)Exhibit R3 – the report of a counsellor Mr I. He is the respondent’s clinical social worker in relation to treatment provided to her. It serves to support other evidence contained in other affidavits that the respondent suffers from depression and has been treated for it from time to time.
(d)Exhibit R4 – the report from Dr J dated the 19 December 2016 as to the respondent’s health;
(e)Exhibit R5 - the report from Dr K dated 6 January 2017. He is an Obstetrics and Gynaecological Registrar at Launceston Hospital. He reviewed the respondent in January 2017 and reviewed biopsy of the respondent noting it showed clear margins.
(f)Exhibit R6 - a referral by the respondent’s treating medical practitioner to an ear nose and throat specialist, Mr L dated 13 February 2017.
I had indicated during the hearing that I would be treating the annexures to the respondent's affidavit as an exhibit. I did not label it during the course of trial, and I have now labelled it as Exhibit R7.
Exhibit R8 is the copy of the wife’s affidavit of 2 February 2017 showing deletions.
Exhibit R9 is the affidavit of Mr M sworn the 21 October 2016.
THE WITNESSES
The applicant
The applicant gave evidence in accordance with his affidavit filed 26 October 2016 (‘the applicant’s trial affidavit’) and financial statement also filed 26 October 2016. He made concessions in relation to liabilities cleared by the respondent at the time of cohabitation amounting to about $9,000. He also made concessions about rent.
When he was endeavouring to run the parties’ business and/or set up another business around the time of separation, the applicant spent money on items in the business without informing or consulting with the respondent. This included his business dealings with Mr N and extensions to the leased business property. He conceded that the respondent did not participate in these decisions.
There was some cross-examination about borrowings on a truck, which was sold and the borrowings were repaid. It makes little difference to this determination.
The applicant was cross-examined by the respondent. He was not a good witness. He was not forthright and he dissembled from time to time. An example of this was in terms of equipment of which he disposed when he sold part of the business. This was during the time when he was running the business by himself.
He did concede that respondent did not consent to the loan of $10,000 for the business and he raised it anyway at a time when he was endeavouring to set up a business in his own name.
In terms of work he said he worked with O Group and earnt some income, although this was of a limited basis, and he assisted his present wife in terms of her work from time to time.
He was not a particularly impressive witness and I will treat his evidence cautiously.
The respondent’s mother
The respondent’s mother was previously a party to these proceedings, but given that there was no dispute as to the recent debts due to her she was removed as a party.
She gave evidence in accordance with her affidavit filed 7 October 2016. This related to a loan of $10,000 made to the applicant in June 2014. I accept that it was a loan made to the applicant in circumstances as she outlined.
In his case outline[1] the applicant said that he and the respondent owed the respondent’s mother $17,000 and this was confirmed in the list of assets and liabilities tendered by counsel for the applicant.[2]
[1] Exhibit A1.
[2] Exhibit A3 – page 3.
In the agreed list of property and liabilities there was an item marked ‘Other – 3. Liability to [the respondent’s mother] for “unpaid rent” $42,000 – disputed’. The respondent’s mother did not refer to this alleged debt in her affidavit. I have ignored that alleged debt.
The respondent’s mother was not in any way seriously challenged in her evidence. I treat her evidence as being a reliable.
Ms H
Ms H gave evidence in accordance with her statement, although much of that was struck out as being either argumentative or otherwise irrelevant in terms of the determination to be made by me. As a consequence she provided evidence in a much redacted document.[3]
[3] Exhibit R2.
Ms H was cross-examined in relation to the business, which had no value. She asserted that Mr N had a special arrangement with Mr P in relation to the business records of the parties. She said when the files would return she noticed changes in allocations of some transactions and some anomalies in the accounting program. She believed that small amounts were being changed to offset goods and service tax (‘GST’) amounts owing. Further, she said that during the period she was involved the business was regularly financing the applicant’s personal expenses including electronics, bike parts, groceries, rent and power bills for his rental properties. This would sometimes leave the business struggling to pay bills, including wages. I have accepted that evidence.
Her evidence was not of great moment in the outcome of these proceedings and adds little to the proceedings.
Dr Q
Dr Q is the respondent’s general medical practitioner. In his report he said that he treated the respondent for depression in 2013 and again in 2015.[4] I accept that evidence and I am satisfied the respondent continues to suffer with depression from time to time.
[4] Exhibit R 7 at page 38.
The respondent recently reported to Dr Q, that she had an acute onset of vertigo in January 2017 and has had difficulties with tinnitus and reduced hearing at the low and high end frequencies[5] since that time. This general practitioner has referred her to an ear nose and throat specialist, for assessment and, if necessary, treatment.
[5] See Exhibit R6.
Dr J
Dr J is the gynaecological oncologist to whom the respondent was referred after a recent diagnosis of a Squamous cell carcinoma following a test in November 2016. Dr J and Associate Professor R undertook a procedure and concluded:-[6]
We [Dr J and Associate Professor R] had a long discussion with [the respondent] today [19 December 2016] regarding the most appropriate management of her going forward. We will perform a cone biopsy tomorrow to further evaluate the extent of her disease. It is quite likely that this procedure will cure her disease, however if we do find any invasive malignancy we will be directed towards further surgery management down the track.
[6] Exhibit R4.
As indicated earlier the report from Dr K of 6 January 2016 said that the biopsy was reported as CIN II_III with clear margins. They said they need only review the respondent in six month’s time. Accordingly, it seems that the concern raised by the tests have been overcome, at least for the time being.
Valuation evidence
Mr S provided a single expert report in respect of the value of the Queensland property in his report dated 2 December 2016. He valued the Queensland property at $525,000 as at 24 November 2016. This evidence was unchallenged.
Mr M
Mr M provided evidence in accordance with his affidavit[7] annexed to the respondent’s affidavit at paragraphs 1, and 6. He was employed by the business for a short period between April 2010 and September 2011 as an office manager. He gave evidence to the effect that the respondent put in more hours of work than did the applicant. He also said that he and the respondent undertook the bookkeeping. As it was not part of the filed affidavit I have marked that as Exhibit R9.
[7] Exhibit R9.
The Respondent
The respondent sought to rely on evidence of witness statements attached to her affidavits. Much of that was rejected, apart from the statement of Mr T,[8] which was read into evidence although the final two paragraphs of his affidavit were struck out.
[8] Annexure to respondent’s affidavit page 142.
The respondent gave evidence in terms of her affidavit filed 25 October 2016 (‘the respondent’s trial affidavit’) and her financial statement filed the following day. That material was read into evidence.
She said she supported the applicant, including arranging for him to apply for and obtain a public service pension. The respondent’s evidence, which I accept, was that the income from the rental on the Queensland property was a significant source of income to the parties up to 2011 and was a source of capital for them to run their business.
In her affidavit of 2 February 2017 the respondent sought to rely on a series of affidavits containing some fifteen typed pages and seventy to eighty pages of annexure. Some of this related to the medical circumstances of the respondent following the hearing. I permitted that evidence to be admitted. However, the vast majority that material was fresh material arising out of the examination and cross- examination of the applicant. Much of that material was rejected. I permitted into evidence parts of the affidavit, namely paragraph 2.1, paragraph 3 on page 4 of the affidavit in relation to a Tattslotto win of $4,660 and parts of paragraph 4.3 of her affidavit regarding her health.
The Tattslotto win was not the subject of any submissions and I have treated it, as asserted by the applicant, as property of his present wife. The attempt by the respondent to file this material must be seen the light of the extensive documentation which was already before the Court in relation to these proceedings, including about 400 pages of annexures to the trial affidavit of the respondent and about 500 pages of annexures to the trial affidavit of the applicant.
The respondent also wished to adduce further evidence from her mother through her affidavit filed 2 February 2017, which sought to provide further evidence in relation to matters, which were clearly available prior to the commencement of the hearing. I rejected that affidavit on the objection of counsel for the applicant.
The respondent sought to adduce an expert report from Mr U, who is a chartered accountant from V Town. Mr U swore an affidavit having reconstructed, at least in part, the financial statements of the businesses and entities, which were run by the parties. This material was rejected.
The respondent said, and I accept, that she worked harder at the business than did the applicant. She acknowledged that he undertook cooking at the home and they both worked hard, although she harder than did he.
The respondent complained that the applicant forced her to finance his brother coming from Western Australia to Tasmania and her need to finance them and their family over here. Given that this was simply part of the approach they adopted to family I give that no significant weight, although I give it some little weight. She said and I accept that the business practice was not huge as they only manufactured a limited number of units over the time the business was in place. She said, and I accept, that the remunerative part of their business was the transportation side.
The respondent said she at one stage received a sum of $5,000 in relation to part of the insurance claim on the contents of the Queensland property, which sum she applied for the purpose of the business.
At the end of a rather tortuous responses to questions on cross-examination, it seems the respondent suffers from:-
- continuing depression, although this has not prevented her from working the business;
- vertigo, on one occasion;
- tinnitus; and
- reduced hearing.
She accepted that the threat of cancer has been resolved.
In cross-examination the respondent said that her mother lent the parties $25,000 in 2012 for a purchase of a vehicle and that two amounts were paid reducing the loan to $17,000. I accept that evidence.
In terms of her relationship with the applicant the respondent said that they commenced living together under the same roof in December 2012, although he was away a lot and there was ‘no action’. However, it was an exclusive relationship and they shared the same bedroom. Given the different views I am satisfied that the relationship commenced in December 2002.
The respondent has tertiary qualifications, although many of those are some years ago and she has been involved in the business the last twelve or thirteen years. She struggles with the accounting aspect of the business. She rarely missed an opportunity to talk negatively about the applicant. She seemed to blame all of the woes of life upon him. At some levels this undermined the veracity of her evidence.
The respondent was cross-examined as to why the income from the Queensland property was treated as joint income. She said she was not aware of this. Either way it makes little difference as the income clearly came from the Queensland property, which was owned by her and acquired by her before the relationship commenced. The Queensland property was substantially paid off at the time of commencement of the relationship.
In terms of the insurance claims on the Queensland property following the flooding, the respondent received two other insurance payments: one for about $90,000 of which she used about $43,000 for the building and the balance was paid into that against the loan; and she received another $24,000 where she applied $8,500 towards building approvals and the balance towards the loan. I accept that evidence.
Counsel for the applicant cross-examined the respondent in relation to her spending habits during the first half of 2014, a period after separation. Both parties took a modest drawing of $400 per week from the business and in addition they were paying interest on the loans for the business. Not much swings on this evidence.
The problem for the parties was the marginal nature of their business and following separation the business was not operating profitably. The parties agree that the respondent ran the business and that the applicant did not know she was unable to do so profitably. The respondent said that the applicant had wasted assets and gave some evidence, but none of it in the form upon which I could conclude that there was positive wasting or that he had embarked on the course to which the respondent asserted.
The respondent was asked questions about the $10,000 advance from her mother, of which she was unaware at the time. The respondent was clearly upset and wrote to at least one provider of credit to the business saying that she was no longer involved which meant that the credit which that business had otherwise provided was not available. She complained on at least one occasion about the Centrelink benefits which the applicant was receiving.
The respondent was cross-examined in relation to the business which she now operates. The parties’ business was a different entity, the parties having been in a partnership until at least the end of June 2014. Such was the conflict between the parties that the applicant set up his own business albeit in premises owned by the respondent’s mother. He then operated the business in his own name until the end of the year when the respondent’s mother required him to vacate her premises.
The evidence was that the applicant abandoned one of the business names. The respondent then moved into the business and set it up again using the customer lists, and she applied for the old business name. This business provides the respondent with an income of about $300 per week.
The respondent was not an impressive witness. She was argumentative and non-responsive. I treat her evidence with great caution, given the comments I have made elsewhere.
Generally
The parties moved to Tasmania in 2004 and set up a business. I accept on the evidence that the business was not entirely successful, but had assistance from the Tasmanian Government in terms of a business in that State and acquired significant assets in the form of motors cycles. To fund their business they arranged to draw monies against a housing loan on the Queensland property and from an overdraft account. The amount currently outstanding in respect of those loans is $213,520.
At the time of commencement of cohabitation the respondent owned the Queensland property, which she had acquired for just over $200,000 prior to the parties commencing cohabitation. By the time the parties commenced their relationship the mortgage had been reduced by the respondent to about $35,000.
The respondent asserts, and I accept, that she had lent her mother $20,000. That loan has been repaid. The respondent was working for a State government instrument earning a good income. The applicant was working for the Commonwealth public service.
When the parties moved to Tasmania the Queensland property was rented to tenants from shortly after the 2003 date of that move until the floods in Queensland in January 2011. The tenants paid significant rent on the Queensland property, although there was a period where a tenant did not pay rent and went into arrears of some $10,000.
Notwithstanding that short period of time of non-payment, I am satisfied that the income on the Queensland property was substantially greater than the cost of insurance, council water rates, and mortgage instalments on the smaller mortgage over that period of time. I am satisfied that it is likely that the mortgage of $35,000 would have been wholly extinguished but for the advances the parties drew to operate their business.
The Queensland property provided a source of capital for the business and provided income to meet the significant costs of that capital up to February 2011.
After the floods it was still necessary to pay the mortgage. There was an amnesty for some period of time, although interest presumably still continued to be charged. The respondent received three lots of insurance payments: one of about $90,000, one of the $24,000 and another of $5,000. These were in part paid against the mortgage and in part paid to try to repair the home, without success. The Queensland property has been vacant since that time. On the evidence before me I am satisfied that the mortgage repayments for the home were funded in three ways over a period of about three and a half years from January 2011 until June 2014: capital payments of at least $70,000 were made against the mortgage in respect of the insurance claims; deduction from the payments made in advance on the loans; and contributions from the business. There is some evidence that this was paid out at around $250 a week in the latter years at least totalling some $13,000 per year. Those repayments came out of a joint enterprise of the parties.
From June 2014 to the date of the hearing, a period of about two and a half years, the respondent had paid all of the expenses in relation to the Queensland property.
I have had regard to that in terms of the adjustment of property.
The applicant now lives in Victoria and married his current wife in March 2016. He is in receipt of Centrelink benefits and undertakes some part time work. He asserts that he has a limited earning capacity and no current formal qualifications and is currently unemployed. In terms of his health he says that he is depressed although no objective evidence was provided in that regard. His present wife is in receipt of a disability pension and works part time.
THE LAW REGARDING DE FACTO RELATIONSHIPS
This Court has both the power and obligation to determine jurisdiction in terms of whether there is a relationship within the meaning of the Act.
The Family Law Amendment (De Facto Financial Matters & Other Measures) Act 2008 (Cth) introduced the concept of “de facto financial cause” to the legislation. Sections 4(1) of the Act, relevantly defines a de facto financial cause to mean:-
(a)proceedings between the parties to a de facto relationship with respect to the maintenance of one of them after the breakdown of their de facto relationship; or ….
(b)proceedings between the parties to a de facto relationship with respect to the distribution, after the breakdown of the de facto relationship, of the property of the parties or either of them; or …
Section 4AA (1) of the Act provides:-
(1) A person is in a de facto relationship with another person if:
(a) the persons are not legally married to each other; and
(b) the persons are not related by family (see subsection (6)); and
(c)having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.
Paragraph (c) has effect subject to subsection (5).
Working out if persons have a relationship as a couple
(2) Those circumstances may include any or all of the following:
(a) the duration of the relationship;
(b) the nature and extent of their common residence;
(c) whether a sexual relationship exists;
(d)the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e) the ownership, use and acquisition of their property;
(f) the degree of mutual commitment to a shared life;
(g)whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h) the care and support of children;
(i) the reputation and public aspects of the relationship.
(3)No particular finding in relation to any circumstance is to be regarded as necessary in deciding whether the persons have a de facto relationship.
(4)A court determining whether a de facto relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.
(5) For the purposes of this Act:
(a)a de facto relationship can exist between 2 persons of different sexes and between 2 persons of the same sex; and
(b)a de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship.
Once there is found to be a de facto relationship with the meaning provided under the Act this Court may make an order or a declaration in relation to a de facto relationship only if the Court is satisfied that one of the four criteria set out in that section has been met, s 90SB provides:-
A court may make an order under s 90SE, s 90SG, or s 90SM, or a declaration under s 90SL, in relation to a de facto relationship only if the court is satisfied:-
(a)that the period, or the total of the periods, of the de facto relationship is at least 2 years; or
(b)that there is a child of the de facto relationship; or
(c)that:
(i)the party to the de facto relationship who applies for the order or declaration made substantial contributions of a kind mentioned in paragraph 90SM(4)(a), (b) or (c); and
(ii)a failure to make the order or declaration would result in serious injustice to the applicant; or
(d)that the relationship is or was registered under a prescribed law of a State or Territory.
Note: For child of a de facto relationship, see section 90RB.
The jurisdiction to hear de facto property proceedings in the Family Court is provided by s 31(1)(a)(aa) of the Act which relevantly provides:-
Original jurisdiction of Family Court
s 31(1) Jurisdiction is conferred on the Family Court with respect to:(a)matters arising under this Act or under the repealed Act in respect of which matrimonial causes are instituted or continued under this Act; and
(aa)matters arising under this Act in respect of which de facto financial causes are instituted under this Act; and …
Section 39A of the Act provides jurisdiction for de facto financial proceedings to be instituted in the Family Court.
Section 4 of the Act implements the requirement that a de facto relationship must have existed between the parties and there has been a breakdown of that de facto relationship to enable the jurisdiction of the Court to be enlivened. These requirements are repeated in s 90SM(1) of the Act.
Section 4AA(a) of the Act also sets out the circumstances which give rise to a de facto relationship. If there is no de facto relationship then the Act will not apply as the Court has no jurisdiction.
The parties have conceded that they were in a relationship from about 2002/2003 until January 2014. I am satisfied their relationship subsisted as a genuine de facto relationship, having regard to the definition under the Act, from 2002/2003 until January 2014 and that that relationship has come to an end. As such, I am satisfied that the Court has jurisdiction to determine the contested applications.
THE LAW REGARDING PROPERTY
The law regarding the treatment of property is under some level of refocus and review following the High Court decision in Stanford v Stanford.[9] Prior to that decision the preferred (although not uncontroversial approach) was the four stage process reflected by the Full Court in cases such as Hickey v Hickey and the Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143.
[9] [2012] HCA 52, (2012) 293 ALR 70.
Following Stanford v Stanford (supra) the Court must firstly satisfy the requirement of s 79(2), that any order must be “just and equitable”, before then examining what orders should be made under s 79(4).
This approach was later adopted in Bevan & Bevan[10], where Bryant CJ and Thackray J noted that the Stanford v Stanford (supra):-
decision serves to refocus attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so.[11]
[10] (2013) FLC 93-545.
[11] Ibid at para 65.
In Chapman v Chapman[12]the Full Court considered the independence of ss 79(2) and 79(4) and agreed that Bevan v Bevan correctly stated the law in relation to the Courts consideration of s 79(2), whether the making of an order is just and equitable. At paragraph 19 of their joint reasons Strickland and Murphy JJ confirmed:-
Section 79 demands a consideration, separately, of all of its requirements without conflation.
[12] [2014] FamCAFC 91.
However, their Honours disagreed with any intention of plurality found in Bevan v Bevan, (supra) in that the Court must consider the matters in s 74(2) when addressing s 79(2) of the Family Law Act 1975 (Cth) (‘the Act’). This was in view of the opposite approach adopted by the High Court in Stanford. Bryant CJ in a separate judgment noted:-
Whatever differences may exist as to the meaning of [84] and [85] of Bevan, I am in agreement with Strickland and Murphy JJ that it is not a requirement to take account of the matters in s 79(4) when considering the question of whether it is just and equitable to make any order under s 79(2). But as long as they are seen as separate and not conflated, the factors in s 79(4) have the potential to inform the decision under s 79(2) …
Accordingly, there are tasks I will complete when determining a division of property. These are:-
1.identify, in the context of ordinary legal principles, the existing legal and equitable interest of the parties in the property;
2.consider whether in the circumstances of the parties it is appropriate and just and equitable for order to be made with regard to s 90SM of the Act; and
3.consider any relevant contribution and other matters that should be taken into account under s 90SM(4) of the Act.
I have adopted that approach.
Whether it is just and equitable to make orders?
It is s 90SM of the Act that deals with the division of property of parties to a de facto relationship. One of the preferred approaches used in determining such property disputes is a four step one which I set out earlier.
In Stanford v Stanford (supra) the High Court’s left in place the first step requiring the identification of the existing legal and equitable interests in property of the parties. Thereafter the Court must determine whether it is or is not just and equitable to make an order altering the parties’ property interests. Often, given the circumstances of the parties that step will be uncontroversial; as is the case each party seeks orders for an adjustment of existing property interests pursuant to s 90SM of the Act. In doing so the parties assert that it would be just and equitable for such orders to be made. These parties had ended their de facto marital relationship and consequently their common use of property. That separation ended their assumptions, which underpinned their property arrangements up to the date of separation. Albeit, the implementation of that approach took some time.
As a starting point and having regard to the parties’ existing legal and equitable interests in property as set out below. I considered, given all of the circumstances in this case, whether an order for adjustment of property ought to be made at all. The respondent owned the Queensland property at the commencement of co-habitation (almost unencumbered) and its value enabled the parties to commence their business and live their lifestyle. The income from that property met or assisted in meeting the loan repayments for the parties’ business. The insurance payments after the floods was partly applied to some repair of the improvement on the property, it was also used for other purposes such as the mortgage repayments. However, given the contributions and the other factors, I am satisfied that the just and equitable requirement in s 90SM(3) of the Act for the making of orders under s 90SM is met.
PROPERTY
The Queensland property
The respondent purchased the Queensland property for about $215,000 prior to the parties commencing to live together. The Queensland property was originally subject to a mortgage of $172,000, however, this mortgage was significantly reduced to about $35,000 at about the time at which the parties’ commenced cohabitation. That reduction came about by contributions made by the respondent.
Monies were subsequently secured against the house to set up the parties’ Tasmanian businesses and to maintain the parties’ businesses. The Queensland property was the house jointly occupied by the parties from December 2002 until about October 2003. Then the parties moved to Tasmania and lived at the respondent’s mother’s home at V Town.
That Queensland property provided rent to the respondent until about August 2008 when the tenant was evicted leaving significant arrears of rent.
In 2011 the Queensland property was inundated in the Brisbane floods and the building on the land was severely damaged. Work was undertaken on the building pursuant to the insurance claim. However, the house remains uninhabitable.
At the commencement of this hearing there was no valuation of the Queensland property. I ordered a single expert report to be obtained as the respondent wished to retain the Queensland property and there was an issue about its value.
Given that there was no valuation and the respondent wished to retain the Queensland property, I had directed that she meet the costs of the valuation of about $880. I do not intend to require the applicant to contribute to that valuation, given a broader analysis of the facts in this matter. Accordingly, for the purpose of the adjustment of property, I have treated the value of the Queensland property as $525,000.
The parties agreed to much of the property and its value.[13]
[13] Exhibit A3 pages 6, 7 and 8.
Other Property
The parties had commenced a business at the beginning of 2004. The Tasmanian Government supported this business which was a manufacturing business. The parties borrowed money against the respondent’s Queensland property and that has supported the business over the years. The parties prepared a business plan.
The respondent had three motor vehicles, being a Utility, a vintage car and a beach buggy, which had an agreed value of some $14,600. I have treated that as the property of the respondent.
The respondent also retained motorcycles and equipment from the business. That is listed in Exhibit A3.
Motor cycles
Motorcycle 9 $ 800
Motorcycle 10 $ 800
Motorcycle 11 $ 3,000
Motorcycle 12 $ 3,000
Motorcycle 13 $ 1,800
Motorcycle 14 $ 4,000
Motorcycle 15 $ 1,800
Motorcycle 16 $ 3,000
Motorcycle 17 $ 3,500
Motorcycle 18 $ 500
Motorcycle 19 $ 1,300
Motorcycle 20 $ 1,500
Motorcycle 21 $ 500
Motorcycle 22 $ 9,000
Motorcycle 23 $ 2,600
Motorcycle 24 $ 1,200
Motorcycle 25 $ 500
Forklift [sic] $ 8,000
Tools in the respondent’s
Possession ; $10,684
Business assets held by
Respondent; $57,484There were some changes giving rise to the above list. One change was that a Motor cycle 26 valued at $4,000 in the applicant’s case outline and $2,400 in Exhibit A3 was written off. Consequently, I have removed it that from the list of property.
The parties gave evidence that the Motorcycle 21, which was asserted to have a valuation of $6,500, was valued at much less an amount. The respondent asserted against her interests a value of $500 and the applicant asserted a value of $1,800. There being no independent valuation, I have treated that motor cycle as having a value of $500.
In addition there was a Motorcycle 24 listed as $3,200. The parties agreed that its valuation ought to be $1,200.
Adjusting the figure to the nearest dollar the value of these motor cycles, forklift and miscellaneous tools, with those amendments, is $57,484 in total.
The respondent had bank accounts totalling $10,931.
Additional property of the respondent included her household contents. It appeared to be agreed that the respondent’s household contents had a value of $7,000.
The respondent has credit card liabilities of $9,000, which were not challenged[14].
[14] Respondent’s financial statement filed 25 October 2016 - item 51.
Accordingly, the property owned or controlled by the respondent were:-
Queensland property
$525,000
Utility, Vintage Car and Beach buggy
$ 14,600
Motorcycles, forklift and tools
$ 57,484
Bank accounts
$ 10,931
Household contents
$ 7,000
Mortgage on the Queensland property
(-$213,520)
Credit card liabilities to BOQ - Visa
(-$ 9,000)
Total property
$392,495
The applicant’s superannuation has an agreed value of $88,979. The Respondent’s superannuation has an agreed value of $123, 619. I have not included the parties’ respective superannuation accumulation accounts in the list of property; this superannuation property should be treated in a separate pool of property. This determination has been made because of the providence of the parties’ respective superannuation, that each have essentially contributed to their own funds, albeit that the applicant contributed to his fund for a year or so after the parties commenced cohabitation. I have reflected upon the relevant other factors and I see no reason why there ought to be any change in the legal and equitable interest each of the parties has in their own superannuation funds.
The applicant asserted his household contents were valued at $500. The respondent asserted it may have been greater but in the absence of independent valuation evidence I have left it at $500. The applicant says his car has a value of $500. The applicant had $8 in bank accounts.[15] I accept those figures.
[15] Exhibit A3 Item 5 page 2.
The applicant retained the motor cycles, tools and equipment and the miscellaneous tools and a welding machine as set out in Exhibit A3 page numbered 2 - item 1 – namely:-
Motorcycle 2 $ 3,600
Motorcycle 3 $ 3,500
Motorcycle 4 $ 7,500
Motorcycle 5 $ 3,000
Motorcycle 6 $ 3,500
Motorcycle 7 $ 2,400
Motorcycle 1 $ 8,000
Misc tools $ 1,000
TIG welder $ 6,000
Total $38,500
There was a dispute about other motorcycles at a depot being ‘other valued motorbikes at depot or with third parties’ namely:-[16]
Motorcycle 27 $ 1,800
Motorcycle 28 $ 2,000
Motorcycle 29 $ 3,000
Motorcycle 30 $ 850
[16] Ibid – final page ‘other’.
It was not clear whom if either party retained these motorcycles with an asserted value of $7,650. The applicant asserted these were either lost or were in the possession of the respondent. The respondent denies the existence of those motorcycles. There being no evidence one way or the other I have treated them as being lost and not included them in the list.
There were a number of other motorcycles and items of property in that part of the Exhibit[17] which the applicant asserted was either lost or were in the possession of the respondent.
[17] Exhibit A3 Item 1 page 2.
The respondent denies the existence of those motorcycles. There being no evidence one way or the other I have treated them as being lost and have not included them in the list.
In terms of liabilities, the applicant has a MyState overdraft of $1,980. This liability was not seriously challenged.
There are loans to the applicant from his father of $10,000 and Mr E of $5,000 and a debt to W Pty Ltd of $154. These total $15,154. No serious challenge was made to those claims.
There are other debts, one of which to X Pty Ltd was $299.21, and I was informed that this had been paid. The others are to Y Accounting in the sum of $935 and Z Pty Ltd in the sum of $1,400.
I have not included the alleged debts of $3,500 to Mr G and of $1,500 to Mr F as there was a doubt as to whether the liability to one was still outstanding. They were challenged by the respondent and the veracity of these loans were not established.
As to the loan of $10,000 by the respondent’s mother to the applicant, I am satisfied it existed. The question is whether this is a joint liability or should be treated as joint. Shortly before 30 June 2014, after separation, the business was in some financial distress. The applicant was unable to meet expenses and he approached the respondent to seek an advance of $10,000 against the mortgage on her home. The respondent declined that request.
He then approached the respondent’s mother and made a similar request, but in the absence of the respondent’s knowledge or consent. The respondent’s mother asked how much was needed, the applicant said $10,000, and she made those funds available to him. This was at a time when the applicant was setting up his own business.
It was at a time when he was undertaking work on the existing business or in the existing business without the respondent’s knowledge or consent, including entering into business transactions.
Given all of those surrounding circumstances I am satisfied of that $10,000, $5,000 was applied by the applicant to the business and should be treated as a joint debt. The other $5,000 was used by him and he provided no evidence as to how it was used. I infer that it was not for the business, the onus being on him. Therefore the applicant will be liable for $7,500 and the respondent for $2,500.
The respondent asserted that there was money outstanding to her mother by way of rent. This was not dealt with by the respondent’s mother in her affidavit nor was it included in the respondent’s affidavit. The evidence of the applicant was that all outstanding rent had been paid. That debt having not been proved, I will not treat this as a liability of the parties.
It was agreed between the parties that they jointly owed $17,000 to the respondent’s mother. This apparently arose out of an advanced by her to purchase a truck for about $25,000 where some $17,000 remains outstanding. It was an agreed figure.
The respondent also asserted there was money outstanding to Ms H, a friend of the respondent. Ms H has been out of the business for almost two years and has, at this stage, made no claim. I am not satisfied that this is a liability of the parties and I will not have regard to that as yet to be determined amount, if it exists at all.
Consequently the applicant had the following property:-
Bikes tools and equipment
$ 38,500
Applicant’s car
$ 500
Household contents
$ 500
Bank account
$ 8
Loan from applicant’s father
(-$10,000)
Loan from Mr E
(-$ 5,000)
MyState Overdraft
(-$1,980)
Debt to W Pty Ltd
(-$154)
Total
$22,374
In terms of superannuation it was an agreed fact that the parties each had contributed to superannuation prior to the commencement of their relationship and have made no meaningful contributions since that time. As I have said elsewhere the applicant’s superannuation is about $88,979 and the Respondent’s is about $123, 619.
It is conceded by both parties that their superannuation had accumulated prior to or about the time of the commencement of their relationship, and as such it was submitted by both parties that there ought not to be any splitting order and the superannuation should remain as it presently stands. I accept that submission and I am satisfied that the superannuation ought not to be disturbed by any order made by this Court.
CONTRIBUTIONS
The parties concede, and I accept, that there ought to be division of property and financial arrangements arising from their cohabitation and contributions.
Considering the evidence of the applicant and respondent I am satisfied that this relationship commenced in about December 2002, but very little swings on this eight or so months difference.
The initial contributions of the respondent were overwhelming compared to those of the applicant. That contribution continued, at least up to the time of the Queensland floods, by providing security for loans to the businesses and the availability of loans themselves.
Housing was provided by the respondent’s mother as was, at least at the later stages, accommodation for the parties businesses.
The parties worked full time in the business. There was an issue as to the contribution each of the parties made to that business.
I am satisfied that the respondent worked long hours in the business and that the applicant worked in the business, but not to the same level as the respondent. This was the arrangement into which the parties had entered.
As the business grew the parties began purchasing motorcycles to repair and restore, and they started a business. They acquired plant and equipment for this purpose.
An inordinate amount of time during the hearing was spent on who did what and the arrangements for the business after separation in January 2014. It seems not to be in issue that the business was run by the applicant for the whole of that year and that there were financial problems in terms of the operating of the business. The applicant endeavoured to convert it to a business in his own name and eventually sold the business, or part of it, for $3,500. I am satisfied that the business partnership was dissolved by notice sent by the respondent to the applicant dated 24 November 2014.
In January 2015, the respondent’s mother, who was the landlord of the premises from where the business was operated, had given notice and the applicant vacated the premises. Since that time the respondent has conducted a similar business at that location.
This was a family business, which the parties, sensibly, decided not to have valued. The valuation was simply treated as the tools and equipment, which the parties had divided up.
As a result I have treated the business as a partnership and in the various iterations from that time as having a nil valuation.
At the commencement of the relationship the respondent had the Queensland property, to which I have earlier alluded. It had a modest mortgage on it, either at the time that the relationship commenced or shortly thereafter.
The respondent had furniture and furnishings. She also had a Motorcycle 31, the vintage car (which she retains), her beach buggy (which she retained) and other funds as set out in paragraph 6.4 of her trial affidavit.
It seems not to be in issue that the applicant owned a motorcycle or motorcycles of about $10,000. I accept that the respondent paid out a finance debt loan of $2,500 for the applicant. The applicant had debts and the respondent paid those debts of a few thousand dollars. In addition the respondent assisted the applicant’s brother with a mortgage and I accept that that amount was repaid. The respondent provided other assistance.
At the time the parties commenced cohabitation in December 2002 the applicant initially clearly paid some rent and then lived in the Queensland property provided by the respondent. The applicant was working as a postman although there was some issue as to his earnings over that time. I am satisfied he was in full time employment and contributed something towards the household expenses.
In October 2003 the parties moved to Tasmania and lived with the respondent’s mother at V Town. I am satisfied that the respondent undertook more of the home duties than did the applicant. I am satisfied that the applicant undertook some work in the gardens and outside.
The parties set up the business to which I have referred earlier, and this was funded out of monies borrowed against the respondent’s home. I reiterate what I said earlier in relation to the respondent’s contributions. I am satisfied that they were greater than that of the applicant and I am satisfied that they built up a partnership over a period of time.
The applicant seeks an adjustment of the non-superannuation property as to 40 per cent to him and as to 60 per cent to the respondent. He says that this is divided up as to 35 per cent to him and 65 per cent to the respondent on contribution of a 5 per cent adjustment for the other factors.
It was submitted on behalf of the applicant that in many ways the business supported the Queensland property over the years following the move to Tasmania. I disagree, I am satisfied on the evidence that the property was a constant and regular source of capital support and income to the parties for their business from 2004 until January 2014.
For the three and a half years following the Brisbane floods the Queensland property was funded out of insurance, access to capital which the parties had and some contributions from the business. Even the latter contributions were troubling in that drawings may have been made against the business to pay the loans and then those expenses would be applied against the liabilities of the business.
I accept that the business was not significantly profitable over the years which it operated. It was propped up and capital created by reason of the capital available to the parties through the Queensland property and from time to time through advances and assistance from the respondent’s mother.
Given all of the circumstances to which I have alluded in these reasons and after the considering the evidence I am satisfied that in terms of the non-superannuation property all of which, other than the respondent’s Queensland property, other than the Queensland property, were accumulated during the course of the relationship and were through the significant financial and non-financial contributions of the respondent.
I am not troubled by the failure of the business at the time of relationship breakup. The respondent placed the business in the hands of the applicant whom she knew was not a businessman and whom she knew was not as careful with funds as was she. That was the arrangement that she put into place and she can hardly complain about that now.
I am satisfied that the contributions of the respondent have been significantly greater than those of the applicant.
The respondent asserts that the property should be split at to 100 per cent to her and nothing to the applicant. I do not accept that this is an appropriate course given the matters to which I have alluded to elsewhere in these reasons.
I do not accept that there ought to be the split submitted by the applicant, that is 40 per cent to him and 60 per cent to the respondent, particularly given the overwhelming initial contributions, the additional contributions of the respondent throughout the relationship, including, for a period of time, income from the Queensland property, the use of that property to raise monies to run the business and presumably the parties’ lifestyles, and the occupation or residence provided by the respondent’s mother.
I am satisfied that there ought to be an adjustment in favour of the applicant to the extent of 5 per cent of the non-superannuation property.
Other factors pursuant to s 90SF(3) of the Act
Section 90SF(3)(a) the age and state of health of each of the parties to the defacto relationship (the subject de facto relationship); and
The applicant is aged 56 and asserts that he is suffers from depression and does not know when he can return to work. He adduced no expert medical evidence as to his health. He is in receipt of a public service pension of $99 per week and a Newstart allowance of $245 per week.
I am satisfied the applicant has the capacity to work; he has a drivers licence, qualifications on forklifts and the like. His present wife is unwell, although manages to hold down part-time employment.
The respondent is aged 53. She asserts that she has medical issues which impacts on her ability to work. Evidence is contained in the various medical reports. These health difficulties have not prevented her from working.
Accordingly, I am satisfied that the parties have the capacity to continue with the work which they were undertaking jointly until January 2014.
Section 90SF(3)(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
The applicant asserted that he undertook significant work in the business and that he solely ran the business through 2014. I am satisfied that he has a capacity to work.
I am satisfied, on the evidence before me, that the applicant has the capacity to work on a regular basis and has demonstrated that in terms of working with car dealerships and assisting his present wife in recent times.
The applicant’s present wife has an income of $591 per week and her son, Mr AA, earns $600 per week. They each pay a third of the rent on the rented property occupied by them.
The respondent earns $345 per week.
The respondent has the major share of the Queensland property and significantly larger superannuation and other assets. I have taken all of those into account.
Section 90SF(3)(c) whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and
This is not a relevant consideration in these proceedings as there are no dependent children.
Section 90SF(3)(d) commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain; and
The applicant has re-partnered and married. He has the responsibility to support his present wife. She is on a disability pension having suffered injuries in a motor vehicle accident some years ago, although the full details of those disabilities were not provided to the Court. The applicant’s present wife did not give evidence.
The applicant’s present wife works part time. On the evidence of the applicant, it is clear that she works to receive that amount which would not impact on her entitlements.
The respondent asserts she pays personal expenditure for her mother and a niece BB, being medical expenses and refers to details set out in “O” of her financial statement. However, she only sets out details of a recent operation for the niece, but does not provide a monetary amount. She does not provide a monetary amount for the medical expenses with which she assists her mother. The respondent has no responsibility to support her mother or niece, as such this is not a relevant consideration and I have treated it that way.
Section 90SF(3)(e) the responsibilities of either party to support any other person; and
Apart from the applicant’s wife, this is not a relevant factor.
Section 90SF(3)(f) subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
The applicant receives the pension and Centrelink benefits to which I have earlier referred. The Centrelink benefits are subject to s 90SF (4) and as such I have ignored them in terms of the applicant’s income. He has the capacity to earn income.
Section 90SF(3)(g) a standard of living that in all the circumstances is reasonable; and
The standard of living of both parties is likely to be reduced by these orders.
Section 90SF(3)(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
This is not a relevant consideration.
Section 90SF(3)(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
This is not a relevant consideration.
Section 90SF(3)(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
This is not a relevant consideration.
Section 90SF(3)(k) the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
This was a long relationship and each of the parties gave up secure and remunerative employment to work in their business. Each party’s earing capacity has been reduced by reason of this endeavour, although neither greater nor less than the other.
Section 90SF(3(l) the need to protect a party who wishes to continue that party’s role as a parent; and
This is not a relevant consideration.
Section 90SF(3)(m) if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
I have had regard to the applicant’s present marriage and his wife’s circumstances.
Section 90SF(3)(n) the terms of any order made or proposed to be made under section 90SM in relation to:
(i)the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
This is not a relevant consideration.
Section 90SF(3)(o) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i)a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii)a person who is a party to a de facto relationship with a party to the subject de facto relationship; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
This is not a relevant consideration.
Section 90SF(3)(q) any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
This is not a relevant consideration.
Section 90SF(3)(r) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
It was submitted to me that part of the factors to which I ought to have regard was the support the respondent receives from her mother. I have given some, but not much weight, to that factor and I have given some, but not much weight, in terms of modest business (which neither party thought warranted a valuation) from which she derives an income of about $300 per week.
Post separation was a time of great conflict between the parties and the applicant approached the respondent’s mother to borrow $10,000 to fund the parties business. The respondent’s mother believed that she was assisting her daughter with this advance, and I have had regard to it in terms of contributions in so far as the amount I have allowed. She lent to the applicant $10,000 for the business. This advance was made without the respondent's knowledge or consent, and has caused great consternation to her. The money was banked into an account of the business and $5,000 was immediately transferred by the applicant to himself. No satisfactory explanation was provided as to how this money was expended and I infer that it was expended for his own benefit and not for the benefit of the business or the respondent.
Accordingly, I will be leaving the applicant responsible for $5,000 of that debt and one half of the other $5,000.
I am satisfied that of the $27,000 owing to the respondent’s mother the applicant should contribute $7,500 in respect of the $10,000 loan and $8,500 in relation to the $17,000 loan making a total of $16,000 due by him to the respondent’s mother.
At least one of the loans has been the source of great controversy between the parties. At one stage the respondent’s mother commenced proceedings in a Magistrates Court and those proceedings were then apparently directed by the Magistrate to be heard in this Court. The respondent’s mother was a party to the proceedings but given that the debt was not in issue she was removed as party.
The process I will adopt is to order that the respondent pay to her mother or reach an agreement with her mother as to the extinguishment of the whole of those debts totalling $27,000. I will then provide that the amount payable by the respondent to the applicant is reduced by $16,000, being the applicant's share of that debt.
I have considered this in terms of the liabilities of the parties had and overall considered the need for each the parties to pay money back to the respondent’s mother. Given the generosity of the respondent’s mother in the past I anticipate that she is likely to relend those funds or readvance those funds to the respondent. I have taken that into account in coming to this conclusion.
Section 90SF(3)(s) the terms of any Part VIIIAB financial agreement that is binding on the parties to the subject de facto relationship; and
This is not a relevant consideration.
Section 90SF(3)(t) the terms of any financial agreement that is binding on a party to the subject de facto relationship.
This is not a relevant consideration.
Assessment
Given the modest amounts involved I have determined that there ought to be an adjustment to which I have referred above, given the contributions by the applicant and the respondent over the period of their relationship, namely 5 per cent.
The respondent will have the preponderance of the assets, as she did at the commencement of the relationship, and slightly more in superannuation. Given that factor and the other factors I propose to make an adjustment in favour of the applicant of 5 per cent.
I have concluded that an adjustment of 10 per cent in favour of the applicant and 90 per cent in favour of the respondent is the approach, which I should adopt.
Therefore I had considered an overall adjustment of 90 per cent to the respondent and 10 per cent to the applicant. The effect of that would be:-
The property owned or controlled by the respondent totals $392,495 and is:-
Queensland property
$525,000.00
Utility, Vintage Car and Beach Buggy
$ 14,600
Motorcycles, forklift and tools
$ 57,484
Bank accounts
$ 10,931
Household contents
$ 7,000
Mortgage on the Queensland property
(-$213,520)
Credit card liabilities to BOQ - Visa
(-$ 9,000)
Total property
$392,495
The applicant’s property totals $22,374 and is made up of:-
Bikes tools and equipment
$ 38,500
Applicant’s car
$ 500
Household contents
$ 500
Bank account
$ 8
Loan from applicant’s father
(-$10,000)
Loan from Mr E
(-$ 5,000)
MyState Overdraft
(-$ 1,980)
Debt to W Pty Ltd
($ 154)
Total
$22,374
The effect of a 90 per cent /10 per cent split is that the wife respondent would retain $373,382 and the applicant is entitled to $41,486. Given the current assets of the parties the respondent would need to pay $19,113 to the applicant.
As the applicant owes the respondent’s mother $16,000, as I discussed above, the respondent’s payment to him would be reduced by a further $16,000 and the respondent would then be liable to pay her mother that sum and indemnify the applicant.
This would leave an amount outstanding to the applicant of $3,113 to be paid by the respondent.
Accordingly, to give effect to these orders the respondent will need to pay to the applicant the sum of $3,113.
As I set out earlier, I have not included the parties’ superannuation in the adjustment of property.
This superannuation property should be treated in a separate pool of property. This because of the providence of the parties’ respective superannuation, that each have essentially contributed to their own funds, albeit that the applicant contributed to his fund for a year or so after the parties commenced cohabitation.
I have reflected upon the relevant other factors and I see no reason why there ought to be any change in the legal and equitable interest each of the parties has in their own superannuation funds.
For the reasons set out above I am satisfied that such division would be just and equitable and otherwise proper in the circumstances of these parties.
Notwithstanding that circumstance it is only right that the parties should be responsible for the debts which they incur and I have adopted the course that I have outlined elsewhere.
Accordingly I will so order.
I certify that the preceding two hundred and fourteen paragraphs (214) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 4 May 2017.
Associate:
Date: 4 May 2017
Key Legal Topics
Areas of Law
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Family Law
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Property Law
Legal Concepts
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Remedies
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Costs
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Jurisdiction
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