Acheson and Acheson
[2018] FCCA 2431
•31 August 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ACHESON & ACHESON | [2018] FCCA 2431 |
| Catchwords: FAMILY LAW – Undefended de facto property proceedings – matters to be considered in respect of determining proceeding in absence of one party – relationship of approximately 28 years in duration – adult children – assessment of contributions – weight to be given to disparity of financial contributions during the marriage - contents of property pool – satisfy requirements of section 79(2) - assessment of section 79(4) factors – just and equitable. |
| Legislation: Family Law Act 1975, ss.4(1); 75(2); 79(1); 79(2); 79(4) Federal Circuit Court Rules, 13.03A(2); 13.03B(2)(d) |
| Cases cited: Bevan & Bevan [2013] FamCAFC 116 Kane & Kane [2013] FamCAFC 205 |
| Applicant: | MS ACHESON |
| Respondent: | MR ACHESON |
| File Number: | ADC 3446 of 2016 |
| Judgment of: | Judge Brown |
| Hearing date: | 20 August 2018 |
| Date of Last Submission: | 20 August 2018 |
| Delivered at: | Adelaide |
| Delivered on: | 31 August 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Jordan |
| Solicitors for the Applicant: | Jordan & Fowler |
| Counsel for the Respondent: | No appearance |
ORDERS
In full and final settlement of all claims for the settlement of marital property between the parties:-
It is ordered as follows:
Within sixty (60) days of today’s date the husband do transfer to the wife, at her expense, all his interest, both in law and in equity, in the former matrimonial home situate at Property A, Certificate of Title Register Book Volume in the State of South Australia.
Upon the transfer of the former matrimonial home the wife shall forthwith discharge the Mortgage No to Bank 1 secured against the former matrimonial home and the wife shall keep the husband indemnified in respect of such mortgage and all other outgoings and liabilities in respect of the former matrimonial home.
The applicant shall retain for her sole use and benefit absolutely, free from any other claim or demand of the respondent:
(a)The Motor Vehicle A currently in her possession;
(b)Her personal affects and other furniture and furnishings in her possession power and control;
(c)Any other property and or financial resources in the applicant’s name and/or possession (including superannuation and bank accounts) standing in her name not otherwise specified herein.
The respondent shall retain for his sole use and benefit absolutely, free from any other claim or demand of the applicant:
(a)The Workcover payment of $73,000.00.
(b)The proceeds of the sale of the Motor Vehicle B of $5000.00.
(c)The furniture and furnishings currently in his possession, power and control;
(d)Any superannuation standing in his name not otherwise specified herein.
In the event that either party refuses or neglects to execute any deed or instrument having been directed to do so by these orders than the Registrar of this court at Adelaide shall have the power as prescribed by section 106A of the Family Law Act 1975 to execute such deed or instrument on his or her behalf and to do all acts and things necessary to give validity and operation to such deed or instrument.
A copy of the orders made this day and these reasons for judgment be personally served on the respondent.
All applications be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Acheson & Acheson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC3446 of 2016
| MS ACHESON |
Applicant
And
| MR ACHESON |
Respondent
REASONS FOR JUDGMENT
Introduction
These reasons for judgment relate to undefended property proceedings. Ms Acheson “the applicant” or “the wife” and Mr Acheson “the respondent” or “the husband” were married in Sydney on 1988 and were divorced on 14 November 2016.
The parties separated, under the same roof in March of 2012. However the father left the matrimonial home in September 2016 and travelled to (country omitted), where he has remained. There are four adult children of the relationship – Ms A aged 28; Mr F aged 27; Ms G aged 21; and Mr O aged 18.
Accordingly the marriage was a lengthy one. From Ms Acheson’s perspective, the relationship between the parties has been characterised by her being the major contributor to the family’s finances, with the husband having long periods of unemployment and significant periods of absence from the family in his travels to (country omitted).
In addition, it is her case that her homemaking and parenting contributions have been more significant than those of Mr Acheson. Given he is currently in (country omitted), he has not taken part in these proceedings, which has, of itself, occasioned the wife significant expense, which she can ill afford.
In these circumstances, it is her position that her various contributions, made during a lengthy marriage, far exceed those of the husband and call for her to receive the majority of the matrimonial estate. She also seeks that the proceedings be determined in the absence of the husband.
At this juncture, the parties’ most significant asset is the home in which Ms Acheson currently lives, which is located at Property A, “the Property A property”. It is registered in the parties’ joint names and was purchased in 2003.
The property is not only Ms Acheson’s home but also that of her three of her adult children. She is a modest income earner and, from her perspective, it would be grossly unfair if the home has to be sold in order for monies to be paid to Mr Acheson, particularly given his lack of involvement in these proceedings and what she would characterise as her over whelming level of contribution.
The home provides a huge degree of security to not only Ms Acheson but also her children. It would be difficult for Ms Acheson to purchase another home if the Property A property is required to be sold. Accordingly, one of the issues before the court is whether it is just and equitable for any order to be made in respect of the property, other than its transfer to Ms Acheson.
Background
The Property A property is currently worth $500,000.00 and is subject to a mortgage, in favour of Bank 1, standing currently at $294,873.00. Ms Acheson also owns a car of modest value ($6,000.00); furniture and household effects ($2,500.00); and has limited superannuation ($60,078).
Ms Acheson is fifty-six years of age. She is employed as a (occupation omitted) by (employer omitted). She is employed on a casual basis and works on average two to three shifts per week, at $28.00 per hour. She receives an average of $289.00 per week.
Ms Acheson currently meets all the expenses with respect to the Property A property. Ms Acheson also indicates that three of her adult children still live at home and “contribute substantially to household expenses[1]”.
[1] See applicant’s affidavit filed 14 August 2018 at paragraph 32(g).
The parties purchased the Property A property in 2003 for $235,000.00 with Ms Acheson receiving $5,000.00 from her mother and $5,600.00 from her brother as a deposit and borrowing the balance from the Bank 1. The property has appreciated in value, but at the same time, the borrowings secured against it have also increased.
It is Ms Acheson’s case that, the parties’ extended the borrowings secured against the Property A property in order to purchase a business for the husband to operate, purchase a Motor Vehicle B for the husband and to undertake renovations to the family home.
In 2005, the parties both completed (course omitted). The wife commenced weekend work as a (occupation omitted), and the husband worked a few shifts per week as a (occupation omitted).
In 2006, the parties purchased a business for $25,000. Both the husband and wife worked in the business, whilst the wife continued working as a (occupation omitted). This purchase was funded by a refinance of the Property A home. The business was not successful and was subsequently sold in 2007 for the amount of $12,000.00.
The parties separated in 2012, after the husband returned from a visit to (country omitted), but remained living under the same roof. The husband left the home in September 2016 and has remained in (country omitted) since that time. Since the husband’s departure from Australia, Ms Acheson has paid the mortgage payments and all household expenses, with assistance from the adult children still living in the home.
Those advising Ms Acheson have obtained a professional valuation of the Property A property of $500,000.00. At present, the mortgage secured against the property stands at $294,873.00.
Ms Acheson believes that the husband’s financial circumstances in (country omitted) are likely to be better than hers, given it is probable that the cost of living there is less than in this country. It is her case that her various contributions made during the parties’ relationship were significantly greater than those of the respondent.
Neither party has a substantial superannuation holding. The applicant has superannuation to the value of $60,078.00, whilst the respondent has superannuation of around $38,001.00, as consequence of a work history characterised by low wages and intermittent casual employment.
Accordingly, neither party is well placed in a financial sense for retirement. However, once again, the wife contends the husband’s holdings will go further in (country omitted) than hers will in Australia.
Ms Acheson now wishes to terminate her financial relationship with Mr Acheson. It is her case that considerations of justice and equity dictate at least a 70/30 per cent division of the parties’ assets being made in her favour. This outcome is based on what she would assert are her superior contributions made during the parties’ relationship.
However the main focus of her application is on the Property A property, which she wants to retain to provide her and her children with financial and accommodation security for the future. It is her case that it would be fundamentally unfair if she is not able to retain the property.
In these circumstances, it is Ms Acheson’s proposal that the husband’s interest in the Property A property be transferred to her and that the husband retain the proceeds of the Workcover settlement, the proceeds of the sale of the Motor Vehicle B and his superannuation.
What is Mr Acheson’s response to this proposal is unclear. The only material provided to the court by the husband is a ‘Voluntary declaration’ emailed to the court registry on 15 August 2018. The document has not been accepted as a document for the court file.
The history of the proceedings to date
The applicant commenced these proceedings on 7 December 2017. The application sought an order for substituted service on the respondent as he is residing in (country omitted) and his address is unknown. The proceedings were listed for their first return, in Adelaide, on 12 February 2018.
On this occasion, the applicant was represented by her solicitor, Mr Jordan. There was no appearance by or on behalf of Mr Acheson, who had also not formally responded to Ms Acheson’s application. The proceedings were adjourned to 6 April 2018.
On 6 April 2018, the matter was adjourned to 18 May 2018 to allow for service on the respondent. An affidavit was filed on 18 May 2018. In this affidavit, Mr Jordan deposed that on 2 January 2018 he received a letter from Mr Saunders, solicitor for the husband advising him that he had no instructions to accept service but would forward Mr Jordan’s correspondence to the husband. Mr Jordan also deposed that on 3 January 2018, he sent a letter to the husband advising him of the proceedings and the orders sought by the wife via email but had received no response.
On 18 May 2018, I made orders for service of the application and order to be effected via email to Mr Acheson, his solicitor Mr Robert Saunders and notice of the application and the order dated 18 May 2018 to be forwarded via Messenger at the last Facebook address of Mr Acheson. The proceedings were adjourned to 18 June 2018 for directions noting that the court may set a date for hearing of the wife’s application on an undefended basis on the next occasion before the court.
In his affidavit sworn on 4 June 2018, Mr Jordan deposed that service had been affected pursuant to the orders dated 18 May 2018. On that basis, I made the following orders:
The matter be listed for an undefended hearing on 20 August 2018 at 3:15pm.
The applicant file any affidavit on which she proposes to rely on at the trial by 6 August 2018.
On 11 July 2018, the solicitors for the wife provided to the court by way of affidavit, a professional valuation of the Property A property. On 14 August 2018, also by way of affidavit, a current statement of the husband’s Super Fund 1 was supplied to the court. In a further affidavit sworn and filed on the same day, the wife provided an affidavit of her evidence to be relied on.
Ms Acheson’s application was called on for hearing at 3:26pm on 20 August 2018. There was no appearance by or on behalf of Mr Acheson. I note that on 15 August 2018 Mr Acheson had forwarded to the court a document via email indicating it was for the final hearing, confirming he was aware of the hearing. Mr Jordan made submissions on behalf of his client. This process took about 15 minutes and during it Mr Acheson did not appear.
The nature of an undefended hearing
It is a significant thing for proceedings to be determined in the absence of one of the parties. The court has an obligation to ensure that the parties to proceedings before it have an opportunity to participate in those proceedings.
Before a person can be adversely affected by judicial order, he or she must be afforded an adequate opportunity to be heard.[2] I am satisfied that Mr Acheson has been given an adequate opportunity to appear in these proceedings and put his position before the court.
[2] See Taylor v Taylor (1979) 143 CLR 1
Ms Acheson is entitled to have her application for settlement of property matters determined within a reasonable period of time, pursuant to the applicable principles of law.
As such, she needs neither Mr Acheson’s formal imprimatur nor his cooperation to have her application determined. Rather, there is an obligation on Mr Acheson’s part if he wishes to be involved in the proceedings, for him to attend at court as required and pursue any application put by him or on his behalf with due diligence.
The Federal Circuit Court is a court of private law. It determines disputes, between parties, according to law. In this case, according to the provisions of Part VIII of the Family Law Act 1975, which relate to the division of property following the breakdown of a marriage relationship.
The court cannot compel a respondent to engage with litigation. It is however obliged to give a respondent the opportunity to put evidence before the court and, if he or she wishes to do so, contest any evidence relied upon by the applicant.
However, a respondent, whether by intransigence, disinterest or manipulation cannot succeed in denying an applicant a just resolution, according to law, to his or her application, by choosing not to take part in proceedings because they do not proceed in the manner of his or her preference.
Order 13.1A of the Federal Circuit Court Rules deals with the court’s authority to enter judgment against a respondent if that respondent defaults in complying with a court order or fails to prosecute any proceedings with due diligence.
Pursuant to Rule 13.03A(2) a respondent is in default if, amongst other things, he or she has failed to:
·Comply with an order of the court in the proceedings;
·Produce a document as required; or
·Defend the proceedings with due diligence.
I am satisfied that Mr Acheson has not defended the proceedings with due diligence. In these circumstances, pursuant to the provisions of Rule 13.03B(2)(d) Ms Acheson is entitled to judgment in default and it is appropriate that the court exercise its discretion to enter judgment, for the wife, in the proceedings.
I reach this conclusion because I am satisfied that Mr Acheson has been given adequate notice of these proceedings, particularly that they were listed for undefended hearing on 20 August 2018 and has not appeared in respect of them, nor given any explanation as to his conduct, up to this point.
However, the applicant is not entitled, as of right, to the orders which she seeks. Rather, the onus remains on her to establish to the court that the orders which she seeks, are just and equitable, according to law.
Essentially, Ms Acheson must lead sufficient evidence to establish her case to the court and persuade it that the result she proposes is a just and equitable one. Otherwise, the court should impose the result, in the case, it considers fair according to the law and the evidence available to it.
The court’s pre-eminent responsibility is to ensure a just result between the parties, notwithstanding the failure of Mr Acheson to participate properly in the proceedings. However, in the absence of satisfactory rebutting evidence, the applicant’s affidavit material is to be accepted by the court, unless it appears inherently unreliable or otherwise unsatisfactory.
The formal affidavit material, on which Ms Acheson relies, is as follows:
i)An affidavit of Mr Acheson filed 14 August 2018;
ii)Statement of her financial circumstances filed 7 December 2017;
iii)An affidavit of Andrew Ley Jordan filed on 14 August 2018.
The legal principles applicable
The process to be followed for the division of the parties’ property is well established by law.[3] The relevant legal principles are primarily contained in sections 79 and 75(2) of the Family Law Act 1975. I am required to follow a number of specific steps.
[3] See Lee Steere v Lee Steere (1998) FLC 91-626; Ferraro v Ferraro (1993) FLC 92-335;
In the first step, I must ascertain what are the parties’ assets and liabilities available to be divided between them. The normal rule is that those assets are to be determined as at the date of trial.[4]
[4] See Wardman & Hudson (1978) FLC 90-466; and Biltoft & Biltoft (1995) FLC 92-614
In the second step, I must ascertain the contributions, which each party has made towards the matrimonial pool of assets, as I have found them, following the first step. Contributions fall into two broad categories.
The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property.
The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage, including any contribution made in the capacity of home maker or parent.”[5]
[5] See Family Law Act s79(4)(c)
It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.
The third step involves the assessment of the parties’ prospective needs, by reference to the factors set out in section 75(2) of the Family Law Act 1975. Pursuant to section 75(2)(o), the Court is entitled to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
Finally in determining what order the court should make under section 79, the court must be satisfied that in all the circumstances, it is just and equitable to make the relevant orders. Overall, it is the justice and equity of the actual orders that the court must consider.[6]
[6] See Russell v Russell (1999) FamCA 187
Accordingly the fourth step is for the court to take a step back and examine whether the orders it proposes are just and equitable. These considerations must also inform each of the preceding steps. [7]
[7] See Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39] and Bevan & Bevan [2013] FamCAFC 116 at [60]
The “overriding requirement” of section 79 is that considerations of justice and equity should inform each step of the process. The exercise I must undertake is not a “process of social engineering”[8] or of equalisation of assets or financial resources.
[8] See Waters & Jurek (1995) FLC 92-635
It is clear that this orthodox stepped approach remains current, notwithstanding the High Court’s decision in Stanford v Stanford.[9] In Stanford the High Court placed significant emphasis on section 79(2), which actively prevents the court from making an order, in respect of property, unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing. This follows from the use of the prohibitive words “shall not” in the relevant section.
[9] Stanford v Stanford [2012] HCA 52
In Stanford the High Court warned of the potential danger of a court conflating its responsibilities arising under section 79(2) & 79(4). The court’s fundamental responsibility is to make a just and equitable order. The High Court said as follows:
“The expression ‘just and equitable’ is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.” [10]
[10] Ibid at [35] – [36]
In this case, it is abundantly clear that the marriage between the parties has come to an end and, as such, there is no logical justification for them holding any joint community of property together. Their joint tenancy of the Property A property needs to be severed.
In addition, I am very conscious of the wife’s circumstances in respect of the property. It is her home and that of three of her children. It is an essential source of both her financial and emotional security. The husband has apparently gone to live in (country omitted). It would be fundamentally unfair, to the wife, for the property to have to be sold.
In these circumstances, I am satisfied that it is appropriate to adopt the four step process in this case. As was discussed by the Full Court in Bevan, whether it is just and equitable to make any particular property order is invariably inextricably interwoven with questions of contribution arising under section 79(4) and the parties’ financial and relationship history with one another.
Although the court must be careful not to combine issues arising under section 79(2) with the exercise arising under section 79(4), it is artificial to divorce them from each other. Section 79(2) does not, however, represent a formal threshold to be crossed prior to the undertaking of the section 79(4) exercise.
Rather, the overall task is a holistic one, to be informed by the idiosyncratic circumstances of each case concerned. However, in most cases, it will be readily apparent that it is just and equitable to make an order altering the property interests of the parties concerned because of their circumstances or the manner in which each has presented their case and the orders sought.
The evidence
Clearly, in this case, I have only received evidence from the wife, which is untested through any process of cross-examination. This is as a consequence of the husband not taking part in the proceedings. Notwithstanding the lack of scrutiny, in my view, I have no reason to consider that the wife is anything other than a credible and honest person.
The applicant was born on 1962. The respondent was born on 1962. Accordingly, both parties are in their mid-fifties. There are four adult children of the marriage.
Both parties were born in (country omitted), with the wife migrating to Australia with her family in 1979. The husband came to Australia in 1988 on a tourist visa. The parties met through the wife’s uncle and commenced a relationship. They were married in Sydney on 1988.
When the parties met, neither had any assets of significance. The parties moved to Adelaide in 1996, and in 2003 they purchased their first house, the former matrimonial home at Property A. The husband has been employed casually as a (occupation omitted), but the parties relied on social security payments to support the family.
In 2002, the wife obtained full time work as a (occupation omitted) at a (employer omitted). It is the wife’s case that her income fundamentally supported the family. The husband did care for the children while the wife worked, but she also contends that she contributed significantly to the care of the children.
The Property A home was purchased in 2003 by the parties. The purchase price was $235,000.00. The wife received $5,000.00 from her mother and $5,600.00 from her brother which was used as a deposit to purchase the home. The balance of the funds were obtained via high interest mortgage finance from (omitted) Finance.
In 2005, both the husband and wife obtained qualifications in (course omitted). The wife continued her full time position at the (employer omitted) and also worked part time as a (occupation omitted) on the weekends. The husband also commenced working part time as a (occupation omitted).
In 2006, the parties re-mortgaged the family home to purchase a business for $25,000.00. The husband and wife both worked in the business, and the wife also worked part time as a (occupation omitted). In October 2007, the business was sold at a loss for $12,000.00. After the business was sold, the parties resumed work as (occupations omitted) on a full time basis.
In 2010, the husband suffered a shoulder injury at work. He was off work for some time, but later resumed work on light duties. The husband made a Workcover claim which was ultimately resolved in 2015 with a payment to the husband of approximately $80,000.00 after paying legal fees and other related costs. An amount of $7,000.00 was given to the wife.
At the time of the Workcover settlement, and despite being separated under the same roof, the parties again re-financed their mortgage to the amount of $300,000.00. These funds were used to pay of the wife’s car under finance and undertake renovations to the house. The husband also used these funds to purchase a motor vehicle.
It is the wife’s case that she was in paid employment consistently throughout the marriage whereas the husband has been employed intermittently. In these circumstances, it is her claim that she was reliable in her employment but Mr Acheson was not. It is the tenor of her evidence that he largely utilised his income for his own purposes.
Throughout the marriage, the husband returned to (country omitted) for extended periods of time. In 2003/2004 the husband spent six months in (country omitted). In 2015, he went to (country omitted) for a further four months. During these absences, the wife struggled financially and found it difficult to work and care for the children.
The wife asserts that when the husband left the home for good, he retained the balance of the Workcover settlement (approximately $73,000.00) and that he sold the Motor Vehicle B for approximately $5,000.00 and retained the proceeds.
It is Ms Acheson’s evidence, that the respondent has not made any financial contributions towards the Property A property since leaving Australia in September 2016. She asserts as follows:
“In early September 2016 the husband left the home for good. He went to a relative’s house at Suburb M before leaving Australia on or about 2016. He returned to (country omitted) and has resided there ever since as far as I am aware. Since the husband’s departure I have paid all of the mortgage payments and household outgoings without assistance from the husband. I have had some financial assistance with the bills from the children, which continues to be the case. Without their assistance I cannot pay the mortgage.”[11]
[11] See paragraph 26 - Affidavit of Mr Acheson filed 14 August 2018.
It is clear that Ms Acheson’s financial position is not strong. She is employed by (employer omitted) on a casual basis, and works on average two to three shifts per week. A recent salary payment was for two shifts and she received $289.00. It is also clear that she relies on the financial assistance provided by the adult children residing with her at the Property A property and that without this support, she would be unlikely to be able to afford to keep the home.
I understand her case, Ms Acheson’s claim for a weighting of contributions in her favour rest on her direct financial contributions were significantly greater than those of the respondent. In this context, it is necessary to set out what is the actual pool of property, against which those contributions must be levied.
The first step – the pool of property
For reasons already provided, I accept the valuations as calculated by Mr Jordan. In respect of the home, the value attributed to it is based on an expert valuation. On any view, the pool is a modest one. The most significant asset obviously being the Property A property, which the wife and children are occupying. I find that the relevant pool of assets and liabilities to be as follows:
Assets $ Property A Property 500,000.00 Husband’s net Workcover settlement 73,000.00 Proceeds of sale of Motor Vehicle B retained by the husband 5,000.00 Motor Vehicle A retained by wife 6,000.00 Furniture and Household effects 2,000.00 Wife’s jewellery and personal effects 500.00 Total 586,500.00 Liabilities Mortgage on Property A 294,873.00 Wife’s legal costs to 14/8/2018 12,519.00 Wife’s estimated costs of preparing for trial 4,950 Total Liabilities 312,342.00 Net Assets 274,158.00
Superannuation Wife’s superannuation 60,078.00 Husband’s superannuation 38,001.00 Total Superannuation 98,079.00
Ms Acheson has legal expenses in the amount of $17,469.00 of which only $1,900.00 has been paid by way of instalments. Her solicitors have allowed her to continue with the payment of fees by instalments due to her modest financial position.
In my view, the retention of the sum of $73,000.00, from the Workcover settlement and $5,000 from the sale of the Motor Vehicle B by Mr Acheson should be regarded as a premature distribution of assets made in his favour. Accordingly, notions of justice and equity dictate that this sum should be notionally added back into the parties’ pool of assets and be credited to the respondent.
In all the circumstances, I accept that the pool of assets, as I have calculated it, must be regarded as somewhat rough and ready. However, in my view, Mr Acheson is not well placed to complain about the pool’s short comings given his lack of involvement with the proceedings. In my view, what is significant is that the pool is modest and considerations of pragmatism dictate that the court should act to finalise the proprietorial interests between the parties.
Step two – assessment of contributions
After a relationship in excess of twenty eight years, there is a modest amount of property available to the court to be distributed between the parties. In net terms, it is $291,627. The house deposit provided as gifts to the wife from her family in the sum of $10,600, along with the wife’s full time employment status must be regarded as being significant.
This enabled the purchase of the Property A property which was the parties’ home during a substantial part of their relationship. This property has appreciated in value over time and this appreciation enabled the purchase of the business, payment of debts and renovations to the home. Without this contribution, I accept that it is likely that there would be very little property available to be divided between the parties now.
In my view, notwithstanding the modest level of this contribution in 2018 dollar terms, it would result in a level of injustice to the applicant if significant weight was not given to her superior initial contribution of capital into their relationship.
In my view, it is a factor which considerations of justice and equity require that it should be accorded special recognition. Without this contribution the most significant asset – the Property A property – would not have been acquired. [12]
[12] See Pierce & Pierce (1999) FLC 92-844
I accept Ms Acheson’s evidence that she worked throughout the parties’ relationship and contributed the entirety of the wages received by her to joint family purposes. More significantly, I do not reject her untested assertion that Mr Acheson, when in employment, at times utilised his income as he saw fit.
It is also the wife’s evidence that she was the primary carer of the parties four children, during the marriage and was also the spouse principally responsible for homemaking. She discharged these responsibilities as well as being in the paid workforce.
In addition, since the parties separated she has met all outgoing in respect of the Property A property without any assistance from the husband, who has apparently moved overseas on a permanent basis.
In all these circumstances, it is my finding that factors relevant to contribution greatly favour the applicant and it would constitute a marked injustice to her if this was not recognised by the court.
However, I acknowledge that in the circumstances of a case like the present, it is highly artificial to speak of contributions in percentage terms. What matters to the parties is what any orders means to each of them, in dollar terms and in respect of which items of property each is able to retain.
The Full Court of the Family Court has recently pointed out that there is no requirement on a trial judge to allocate a specific percentage entitlement of property, following the exercise under section 79(4). Rather such allocations have been described as being a “sensible and valuable tool” but are not necessarily an objective in themselves.[13]
[13] See Kane & Kane [2013] FamCAFC 205 per Faulkes DCJ
As a consequence, in most cases, there will come a point where it is necessary to make the leap from words to figures and so move from a qualitative evaluation of contributions to one which is quantitative in nature. [14]
[14] See Steinbrenner & Steinbrenner [2008] Fam CAFC 193 at [234] per Coleman J
In this case, given the modest asset pool and the significance of the applicant’s contributions, I consider that the starting point for any consideration of contributions in percentage terms is one of 70/30 per cent, in Ms Acheson’s favour in respect of the non-superannuation assets.
In respect of the superannuation, which is modest in amount and which apparently represents the life time efforts of both parties in the workforce to date, that each party retain their respective superannuation entitlement appears to me to be appropriate.
Step 3 – the prospective needs of the parties – section 79(4)
In my assessment, both parties face a problematic financial future. They are both in their mid-fifties and so are each likely to have a decade in which to garner resources for retirement through on-going employment.
At this stage, both Ms Acheson and Mr Acheson have modest amounts of superannuation, which is likely to be inadequate to provide a comfortable retirement for either of them. Given this situation, a decade may not be a sufficient period to remedy this deficiency.
Ms Acheson has secure but casual employment. It is modestly paid and is physically demanding. She has also recently experienced allergy issues which has reduced her ability to work, therefore how much longer she can remain in employment must be uncertain. She will also have a significant level of debt, in respect of her home, regardless of the outcome of these proceedings.
As Ms Acheson, for understandable reasons, seeks the transfer of the husband’s interest in the Property A property to her. This will present her with a significant challenge as she presently relies heavily on financial assistance from the adult children living in the home to pay the mortgage and running expenses of the household. In addition, she has no financial buffer to protect herself from any future exigencies.
Neither party can be described as significantly qualified or likely to be particularly attractive to potential employers in a contracting job market. Ms Acheson is now a (occupation omitted). It seems she has a good reputation with (employer omitted), by whom she has been employed since 2011, but such positions are casual in nature.
The current circumstances of Mr Acheson are not known to me. I have no evidence regarding the cost of living in (country omitted) and whether he still has anything left of the Workcover settlement or is able to access his superannuation, given he is now over fifty five years of age and may be permanently retired. It is a matter of conjecture as to what sort of life these sums would fund in a country like (country omitted), which has a vastly different standard of living to a country such as Australia.
In all these circumstances, I do not think that it can be said that the various section 79(4) factors favour one party significantly more than the other, apart from the fact that the wife has made greater financial contributions towards the acquisition and maintenance of the former matrimonial home which is the most significant asset of the marriage.
This factor – direct financial contributions of the wife – is a factor which in my view, further justifies an equalisation being made in respect of the alteration of the property interests of the parties as sought by the wife.
Conclusions
This is a perplexing case by virtue of Mr Acheson’s lack of engagement with it. It would be preferable if the parties could have embarked upon a joint process of rationalising their financial affairs.
Mr Acheson has left Australia to return to (country omitted) to live. He and the wife are joint owners of the Property A property and have a substantial mortgage with Bank 1 with respect to this property. The husband left Australia without making any arrangements with the wife therefore she was compelled to bring proceedings to end her financial relationship with the husband. It is grossly unfair that Ms Acheson has the financial responsibility of the former matrimonial home without the security of sole ownership.
These factors, when coupled with the significant length of the relationship between the parties; Ms Acheson’s initial injection of capital to purchase the home; and her more substantial financial contributions during the relationship; dictate that there should be orders made adjusting the parties’ current proprietorial interests.
Seventy per cent of the parties’ current net assets ($274,158.00) is represented by the sum of $191,910.00. Ms Acheson has in her possession assets in the form of her motor vehicle and household and personal effects to the value of $8,500.00. Thirty per cent of the parties’ current net assets ($274,158.00) is represented by the sum of $82,248. Mr Acheson retained in his possession the balance of the Workcover settlement in the amount of $73,000 and the proceeds of the sale of the Motor Vehicle B in the amount of $5,000.00. This is a total of $78,000.00
The Property A property has been valued at $500,000.00 and is subject to a mortgage of $294,873.00. The equity of this property is $205,127.00. Accordingly, to achieve a 70/30 % division of the non-superannuation assets would require a transfer of funds, from Ms Acheson to Mr Acheson in an amount of $13,217.00. It could only be achieved, by Ms Acheson selling or increasing the borrowings against the Property A property.
In my assessment, a just and equitable outcome is a transfer of the Property A property to Ms Acheson, without any payment to the husband. Conversely, in my view, it would be plainly unjust if, in all the circumstances of this case, the property had to be sold. Such an outcome would necessitate the wife finding a new source of accommodation for herself.
I am satisfied that Ms Acheson will be able to continue to meet the expenses of the Property A property, which she has done since 2016 and therefore she will be also be able to re-finance and discharge the current mortgage in joint names with Mr Acheson.
Ultimately, in my view, the parties need to finalise their financial relationship with one another which necessitates the wife having the security of having this asset in her sole name. This is also, in my view, fair, given his lack of recent contribution to the property.
The husband’s circumstances are unknown as he has chosen not to respond to the wife’s application formally. Similarly, he has not expressed any opposition to the orders sought by her by way of responding documents.
If the husbands neglects to take the necessary steps to satisfy the payment order, I will direct the Registrar of the Court at Adelaide to sign all necessary documents to effect the transfer of the Property A property to the wife.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and fifteen (115) paragraphs are a true copy of the reasons for judgment of Judge Brown
Date: 31 August 2018
Clauson v Clauson (1995) FLC 92-595; Hickey v Hickey and Attorney General for Commonwealth of Australia (2003) FLC 93-143 at 78,386
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Jurisdiction
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Statutory Construction
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