Albert & Albert & Anor
[2012] FMCAfam 324
•24 April 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ALBERT & ALBERT & ANOR | [2012] FMCAfam 324 |
| FAMILY LAW – Property – application for property orders – binding financial agreement – whether agreement between the parties is a binding financial agreement – just and equitable. |
| Family Law Act 1975, ss.71A, 75, 79, 81, 90C, 90D, 90G, 106A |
| Black v Black [2008] FamCAFC 7; (2008) 38 Fam LR 503; FLC 93-357 In the Marriage of Hickey [2003] FamCA 395; (2003) 30 Fam LR 355; FLC 93-143 In the Marriage of W (1980) 6 Fam LR 538; FLC 90-872 |
| Applicant: | MS ALBERT |
| First Respondent: | MR ALBERT |
| Second Respondent: | MR C ALBERT |
| File Number: | WOC 172 of 2010 |
| Judgment of: | Scarlett FM |
| Hearing date: | 15 October 2010 |
| Date of Last Submission: | 15 October 2010 |
| Delivered at: | Sydney |
| Delivered on: | 24 April 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr Alexander |
| Solicitors for the Applicant: | Verekers Lawyers Wollongong |
| Solicitor for the Respondents: | Mr Fong |
| Solicitors for the Respondents: | Just in Case Legal |
ORDERS
Within forty-two (42) days from the date of these Orders the First and Second Respondent must do all acts and things necessary to discharge the mortgage over the property at Property H in the State of New South Wales to the effect that the sums loaned to the Second Respondent are repaid to the first Respondent.
Within fifty-six (56) days the First Respondent is to pay to the Applicant by way of settlement of property the sum of $131,448.50.
The Applicant is declared to be the sole legal and beneficial owner of all her right title and interest in:
(a)Toyota Rav 4 motor vehicle registered number [omitted];
(b)Her caravan and annex;
(c)All cash at bank and moneys invested by her in her sole name;
(d)Any superannuation entitlements received by her and invested by her or on her behalf; and
(e)All furniture, furnishings and items of personal use and adornment in her possession.
The Respondent is declared to be the sole legal and beneficial owner of all his right title and interest in:
(a)Ford Falcon motor vehicle registered number [omitted];
(b)All cash at bank and moneys invested by him in his sole name including all his Telstra shares;
(c)Any superannuation entitlements received by him and invested by him or on his behalf; and
(d)All furniture, furnishings and items of personal use and adornment in his possession.
In the event of either party neglecting or refusing to sign all or any necessary instruments to give effect to these orders or any of them, either party is at liberty to apply under the provisions of section 106A of the Family Law Act 1975 to the Court to seek the appointment of a Registrar or Deputy Registrar of the Court to execute the deed or instrument in the name of the person to whom the direction was given and to do all acts and things necessary to give validity and operation to the said deed or instrument.
The above Orders are intended to determine finally the financial relationship between the parties under section 81 of the Family Law Act 1975 in so far as it is practicable to do so.
IT IS NOTED that publication of this judgment under the pseudonym Albert & Albert & Anor is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
WOC 172 of 2010
| MS ALBERT |
Applicant
And
| MR ALBERT |
First Respondent
| MR C ALBERT |
Second Respondent
REASONS FOR JUDGMENT
Application
This is an application for settlement of matrimonial property brought by the Wife. The First Respondent is the Husband and the Second Respondent is their son.
The Wife seeks orders that the assets be divided equally between the Husband and herself.
The Husband opposes the application, seeking an order that a Financial Agreement between the parties is binding on them under the provisions of subsection 90G(1B) of the Family Law Act 1975 and that he should be entitled to all of the proceeds of sale of the former matrimonial home at Property K, New South Wales.
The Second Respondent has, curiously, filed a Response that does not seek any order at all.
Background
The parties commenced living together from “approximately 1984”[1] and were married [in] 1989. They finally separated in February 2009.
[1] Affidavit of Ms Albert 25.2.2010 at paragraph [4]
The Wife was born [in] 1960 and is currently 51 years of age. The Husband was born [in] 1942 and is therefore 69 years of age.
There is one child of the marriage, Mr C Albert, [C], who is an adult, having been born [in] 1989. He is the Second Respondent.
The Wife commenced proceedings in this Court by filing an Application for property orders and supporting documents on 8th March 2010. The Application was filed in circumstances of some urgency, as the Wife was seeking an injunction against the Husband:
a)restraining him from dealing with or disposing of the proceeds of the sale of the former matrimonial home at Property K; and
b)requiring the Husband to deposit the proceeds of sale into the trust account of the Wife’s solicitors for investment in the joint names of the Husband and Wife.
There was no appearance by or on behalf of the Husband on 15th March 2010. Orders for substituted service were made and the application was adjourned to 2nd March 2010.
The Husband filed a Response and supporting documents on 14th April 2010.
The Wife filed an Amended Application on 20th April 2010, joining the parties’ son Mr C Albert as the Second Respondent.
Mr C Albert subsequently filed his Response, in which he sought no orders, along with a Financial Statement and an affidavit.
On 15th June 2010 the Court made the following interim orders:
1. NOTING that the proceeds of sale of the parties’ matrimonial home at Property K, in the State of New South Wales were received in their entirety by the Husband, and,
2. ALSO NOTING that the Respondent Husband has stated that he has loaned the entirety of the net proceeds of sale to the Second Respondent by way of a Registered Mortgage number [omitted], the Court hereby orders that:
3.a. The First Respondent be restrained from dealing with or disposing of any funds payable to him as the Mortgagee under the said Mortgage agreement, other than in accordance with these Orders.
b. That the First Respondent be restrained from dealing with or disposing of the said Mortgage.
c. That the First Respondent deposit the said proceeds or funds payable to him and also received by him or his nominees, into the Trust Account of the Applicant Wife’s solicitors for investment in the joint names of the parties.
d. That the Second Named Respondent be restrained from dealing with or disposing of the amount of funds constituting the Mortgage loan obtained from the First Respondent, other than in accordance with these Orders.
The parties attended a Conciliation Conference before a Registrar. No settlement was reached. The application was listed for final hearing on 15th October 2010.
Orders Sought
The Wife, in a document entitled “Wife’s Hearing Compliance” seeks the following Orders:
1. That within forty two (42) days the first and second named Respondent do all acts and things necessary to discharge the mortgage with the effect that the sums loaned to the second Respondent be repaid to the first Respondent.
2. That by way of settlement of property the funds remitted under Order 1 above be equally divided between the parties.
3. That by way of settlement of property the proceeds of sale of the property at Property K be divided %0% as to the Applicant wife, and 50% to the Respondent husband.
4. That unless otherwise specified in these orders:-
4.1Each party be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders and that for this purpose bank accounts be deemed to be in the possession of the beneficiary thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements, and any other item of personalty and effects in their respective possession of either party;
4.2Each party be solely liable for and indemnify the other party against liability encumbering any item of property to which that party is entitled pursuant to these orders.
5. That in the event of either party neglecting or refusing to sign all or any necessary instruments to give effect to these orders or any of them, either party is at liberty to apply, pursuant to Section 106A of the Family Law Act, to the Court to seek the appointment of an Officer of the Court or other person to execute the deed or instrument in the name of the person to whom the direction was given and to do all acts and things necessary to give validity and operation to the said deed or instrument.
6. That the above Orders are intended to finally determine the financial relationship between the parties pursuant to section 81 of the Family Law Act 1975 as amended in so far as it is practicable to do so.
7. That the first named and second named Respondents be jointly and severally liable for the costs of the Applicant wife in the proceedings herein.
The Husband, in his Amended Response filed on 4th June 2010, seeks the following orders:
1. Pursuant to s. 90G(1B) of the Family Law Act 1975 an Order declaring that the Financial Agreement is binding on the parties.
2. An Order that the respondent husband is entitled to 100% of the proceeds of sale of the property located at Property K.
3. Pursuant to s. 81 of the Family Law Act an Order that financial relationships between the parties have been finally determined.
The Second Respondent filed a Response in which he did not seek any orders at all.
Evidence
The Wife relied on her affidavits of:
a)25th February 2010 (filed on 8th March 2010); and
b)30th September 2010 (filed on 1st October 2010).
She also relied on her Financial Statement filed on 8th March 2010.
It was the Wife’s evidence that the husband brought into the marriage land at [S] that he had obtained by way of settlement of property with his first wife, which he later sold for between $40,000.00 and $50,000.00. She had no significant assets at the commencement of the marriage.
The parties purchased a house at [omitted] in about 1985 or 1986, which was sold after about twelve or fifteen months. They then purchased land at [H] and built a house on it. The real estate was purchased in the Husband’s name.
The Wife deposed that during the marriage she was the primary carer for the parties’ son [C] and she did all the cooking, cleaning and washing. She was employed as a [occupation omitted] from the time that [C] was in Year 10 and she remained in that employment until she moved to Wollongong in January 2010.
The parties separated in 1991 and remained living apart for about four or five years, when they reconciled and recommenced cohabitation. During the period of separation the Husband had purchased the home at Property K, and when the parties reconciled the Wife moved into that home with the Husband.
The Wife said in evidence that when she worked she had always handed her pay packet to the Husband and he had looked after the finances.
The Wife stated in her affidavit that the parties’ assets at the time of separation (in about February 2009) were:
a)a caravan and annex worth between $15,000.00 and $20,000.00;
b)2003 Toyota Rav 4 registered no. [omitted], valued at $15,000.0;
c)2007 Ford Falcon Turbo registered no. [omitted] valued at $40,000.00;
d)Husband’s bank accounts at CBA, IMB and Community First;
e)Furniture and effects in former matrimonial home;
f)Telstra shares;
g)Husband’s superannuation; and
h)The former matrimonial home at Property K, unencumbered, which she valued at $322,000.00.
The title to the former matrimonial home was solely in the name of the Husband.
The Wife stated that:
After separation the Respondent husband paid to me a total amount of $15,000.00 in different sums over a 12 month period. I retained the caravan and annex and my Rav 4 motor vehicle. The Respondent Husband got me to sign pieces of paper that I was accepting the caravan and annex, the motor vehicle and $15,000.00 as a property settlement between us. He did not provide me with copies of those signed pieces of paper.[2]
[2] Affidavit of Ms Albert 25.2.2010 at [9]
The Wife later consulted a solicitor about property settlement and some correspondence ensued.
After separation, the Wife retained the caravan and annex and the Rav 4.
The Wife was charged with a drink-driving offence on 24th October 2009 and, as a result, was disqualified from holding a driver’s licence for two years. Her sister used the car during the wife’s period of disqualification.
The Wife deposed that she lives in the caravan and annex at Warilla.
The Wife gave oral evidence and was cross-examined by the Husband’s solicitor, Mr Fong. She said that she had been the primary caregiver for the parties’ son [C] and had stayed home until [C] left school, in 2005. She said that when she and the Husband separated she asked for the caravan, the Rav 4 car and $50,000.00. The Husband had said she could have “$15,000.00 or nothing”. She accepted because she thought she had no choice. She wrote out an agreement between them because the Husband cannot spell very well.
In re-examination the Wife said that she had not had any independent legal advice about the agreement that she signed.
The Husband relied on his affidavit of 12th April 2010 (filed on 14th April 2010). He also relied on his Financial Statement of the same date.
The Husband’s evidence differed from that of the Wife in a number of respects. It was his evidence that between 1984 he attended to most of the household chores such as cooking and cleaning. The Wife did the washing but she did not iron the clothes. He deposed that the Wife “had income but she kept it to herself”.[3]
[3] Affidavit of Mr Albert 12.4.2010 at paragraph [5]
The Husband claimed that he was always the one to attend to the child [C] when he cried at night.
It was the Husband’s evidence that when the parties separated it was the wife made a proposal to settle her property claim in writing and also drafted the final agreement:
35.On or around 11 March 2009, Ms Albert and I agreed to separate and end all financial relationship between us.
36.She drafted her proposal on a piece of paper. A copy of the proposal is annexed herewith and marked with Annexure “A”.
37. I said, “I will agree to that”.
38.She drafted an agreement. A copy of the Agreement is annexed herewith and marked with Annexure “B”.
39.Both Ms Albert and I signed the Agreement and it was witnessed by our son Mr C Albert.[4]
[4] Affidavit of Mr Albert 12.4.2010 at [[35]-[39]
The Husband described his sale of the former matrimonial home and purchase of another property in this way:
56.On 25 January 2010, I signed the Contract to sell me[5] house (“Property K”).
57.On 30 January 2010, I signed a contract to buy another property.
58.On 3 February 2010 I nominated my son Mr C Albert as the purchaser in the Contract signed on 30 January 2010.
59.On 1 March 2010, I agreed to lend Mr C Albert $320,000.00 top purchase the property and Mr C Albert agreed to mortgage the property to me as security for payment.
60.I was going to use the sale proceeds from Property K property to finance the loan advance to Mr C Albert.
61. On 17 March 2010, both properties were settled.[6]
[5] sic
[6] Affidavit of Mr Albert 12.4..2010 at [56]-[61]
The Husband gave oral evidence and was cross-examined by the Wife’s counsel, Mr Alexander.
The Husband said that his son Mr C Albert had not worked for seven months. He only earns about $600.00 per week. He has a few shares but not many. He conceded that he had controlled the money during the marriage.
The Husband said that he had loaned the money to his son to buy the house. His son owes him “heaps”. The son has not been working because he suffered a head injury.
The document that forms Annexure “A” to the Husband’s affidavit states:
I Ms Albert of sound mind am asking for the following things my Rav 4 but in my name the caravan put only in my name and money the sum of $50,000.00 (circled) $15.000 and leave everything else to Mr Albert that in clued house & contents and the Ford Falcon[7]
[7] Affidavit of Mr Albert 12.4.2010 Annexure “A”
The document described as the agreement is annexed to the Husband’s affidavit and marked “B”:
11.3.09 I Ms Albert of sound mind am asking the following things my car the Rav 4 the caravan and $15.000 dollars cash he retains the house & contents & the Ford Falcon at no cost to me.
Everything is accepted
Ms Albert Mr Albert
Signed Signed
(signature) (signature)
Mr C Albert
Witness
(signature[8])
[8] Ibid Annexure “B”
The Second Respondent, the parties’ son Mr C Albert was not required to give evidence. In his affidavit sworn on 4th June 2010 he deposed that he bought the property at Property M for $320,000.00. His father agreed to loan him the full purchase money. He annexed a copy of the mortgage that he signed to his affidavit. He went on to state:
5. After settlement, I have been making mortgage repayments to my father.
6. I understand that the interest rate is lower for the loan, however I allow my father to live in my property.[9]
[9] Affidavit of Mr C Albert 4.5.2010 at paragraphs [5] & [6]
The Relevant Law
The way a court approaches property matters has been authoritatively set out by the Full Court of the Family Court in its decision In the Marriage of Hickey[10] at paragraph [39]:
The case law reveals that there is a preferred approach to the determination brought pursuant to the provisions of s. 79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss. 79(4)(a),(b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the properties. Thirdly, the Court should identify and assess the relevant matters referred to in ss. 79(4)(d),(e),(f) and (g), (“the other factors”) including, because of s. 79(4)(e), the matters referred to in s. 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case…[11]
[10] [2003] FamCA 395; (2003) 30 Fam LR 355; FLC 93-143
[11] [2003] FamCA 395; (2003) 30 Fam LR 355; FLC 93-143 per Nicholson CJ, Ellis and O’Ryan JJ at [39]
The Respondent seeks an order declaring that the agreement entered into by the parties is a financial agreement that is binding upon them.
Financial agreements during a marriage are covered by s.90C of the Family Law Act. Financial agreements after a divorce order is made are covered by s.90C of the Act.
Section 90G sets out the conditions required for a financial agreement to be binding on the parties:
(1)Subject to subsection 1A, a financial agreement is binding on the parties to the agreement if, and only if:
(a) the agreement is signed by all parties; and
(b)before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement; and
(c)either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in paragraph (b) was provided to that party (whether or not the statement is annexed to the agreement); and
(ca)a copy of the statement referred to in paragraph (c) that was provided to a spouse party is given to the other spouse party or to a legal practitioner for the other spouse party; and
(d)the agreement has not been terminated and has not been set aside by a court.
(1A)A financial agreement is binding on the parties to the agreement if:
(a) the agreement is signed by all parties; and
(b)one or more of paragraphs (1)(b),(c) and (ca) are not satisfied in relation to the agreement; and
(c)a court is satisfied that it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made); and
(d)the court makes an order under subsection (1B) declaring that the agreement is binding on the parties to the agreement; and
(e)the agreement has not been terminated and has not been set aside by a court.
(1B)For the purposes of paragraph (1A)(d), a court may make an order declaring that a financial agreement is binding on the parties to the agreement, upon application (the enforcement application) by a spouse party seeking to enforce the agreement.
If there is a binding financial agreement in existence, it will have the effect of ousting the jurisdiction of the court (see s.71A of the Act). Subsection 71A(1) provides:
(1) This Part does not apply to:
(a)financial matters to which a financial agreement that is binding on the parties to the agreement applies; or
(b)financial resources to which a financial agreement that is binding on the parties to the agreement applies.
It was held in Black v Black[12] that, as a binding financial agreement removes the jurisdiction of the Court to determine those matters covered by the agreement:
Care must be taken in interpreting any provision of the Act that has the effect of ousting the jurisdiction of the Court.[13]
[12] [2008] FamCAFC 7; (2008) 38 Fam LR 503; FLC 93-357
[13] [2008] FamCAFC 7: (2008) 38 Fam LR 503; FLC 93-357 per Faulks DCJ, Kay and Penny JJ at [40]
Consequently, their Honours held that “strict compliance with the statutory requirements is necessary to oust the court’s jurisdiction to make adjustive orders under s.79”.[14]
[14] [2008] FamCAFC 7; (2008) 38 Fam LR 503; FLC 93-357 at [45]
Conclusions
Clearly, the first matter to be dealt with is the Respondent’s claim that there is a binding financial agreement between the parties which would effectively oust the Court’s jurisdiction to deal with property issues under s.79 of the Act.
The short answer is that the agreement signed by the parties is not a binding financial agreement. It is clear that the parties had no independent legal advice from a legal practitioner about the effect of the agreement on the rights of each party or at all. Independent legal advice is an important requirement under s.90G and a divergence from this requirement would lead to the inevitable conclusion that the agreement is not a binding financial agreement.
I am not satisfied, in all the circumstances, that it would be unjust and inequitable if the agreement were not binding on the parties.
Consequently, the Court has jurisdiction to determine the Wife’s application for an adjustment of property under the provisions of s.79 of the Act.
The Parties’ Property
The parties did not agree on the value of the assets. There was a paucity of valuations provided and the Court has had to do the best it can with the valuations of the assets. The Wife’s estimate of the values of the respective motor cars comes from the Red Book site, which is a recognised guide to the values of used motor vehicles.
The asset pool appears to be:
a)Proceeds of sale of Property K: $320,000.00
b)Ford Falcon in the possession of the husband $21,200.00
c)Husband’s bank account $3,000.00
d)Husband’s superannuation $1,000.00
e)Husband’s furniture and furnishings $200.00
f)Husband’s shares $1,000.00
g)Wife’s bank account $3.00
h)Toyota Rav 4 in the possession of the wife $15,000.00
i)Caravan and annex in the possession of the wife $17,500.00
j)Wife’s superannuation NIL
TOTAL $378,903.00
As to the parties’ liabilities, I find that they are as follows:
a)Husband’s CBA Visa card debt $500.00
b)Wife’s personal loan from Westpac $17,000.00
c)Wife’s CBA MasterCard debt $3,500.00
TOTAL LIABILITIES $21,000.00
By subtracting the liabilities from the assets, I find the net total of the parties’ assets to be $357,903.00.
The Parties’ Contributions
Cohabitation commenced in 1984. The parties separated in 1991 and remained apart until about 1995. After reconciliation in 1995, they remained living together until February 2009. Thus, the parties were together for approximately 21 years.
The Husband brought assets into the marriage, whereas the Wife had very little in the way of possessions. The Husband worked throughout the marriage and was described by the Wife as “a good provider”. The Wife attended to the care of the parties’ child and performed domestic duties. The Husband denied the extent of the Wife’ contributions as a homemaker but I prefer the Wife’s evidence in that regard.
During the parties’ separation from 1991 to 1995 the child [C] lived with the Mother and she was his primary caregiver.
The Husband has submitted that he should be entitled to 70% of the asset pool because of the greater financial contribution that he has made and the significant contribution he has made to household duties. I am not persuaded that his financial contribution should be given such weight, noting the length of the period of cohabitation. I prefer the evidence of the Wife as to the significant of each party’s contribution to the household and homemaking duties.
Taking the long period of cohabitation into account, I find the parties’ contributions to be equal.
Matters to be taken into account under s.79(4)(d)-(g)
The orders proposed by the parties would not have any effect on the earning capacity of either party.
Subsection 79(4)(e) requires the Court to consider the matters referred to in subsection 75(2) so far as they are relevant.
The Husband was born [in] 1942. He is 69 years old.
The Wife was born [in] 1960, so she is currently 51 years old.
The Wife is in good health but the Husband is not. The Wife has a longer period of time to work than the Husband. The Husband is still working but on a limited income.
Neither party has the care of any child under the age of 18 years. The parties’ adult son lives with the Father. He has been incapacitated by an injury and has not been working for some months.
Neither party has formed a new relationship.
Then subsection 75(2) factors appear to be about equal and no adjustment either way is called for.
Thus, the assets should still be divided equally between the parties.
Just and Equitable
Subsection 79(2) of the Act provides that the Court shall not make an order under s.79 unless it is satisfied that, in all the circumstances, it is just and equitable to make the order. It has been held that subsection 79(2) should be read together with subsection 79(4) and it is not a condition precedent to a consideration of s.79(4):
What is just and equitable depends on a proper consideration of the factors set out in s. 79(4).[15]
[15] In the Marriage of W (1980) 6 Fam LR 538 at 549; FLC 90-872 per Nygh J
I have considered the matters in s.79(4) of the Act. There are no factors that would indicate that an order dividing the matrimonial assets equally between the parties would be other than just and equitable. As I consider that such an order would be just and equitable I propose to make orders accordingly.
The net total of the assets amounts to $357,903.00. Each party is entitled to 50%, which amounts to $178,951.50.
The Wife received assets to the following value:
a)Bank account $3.00
b)Toyota Rav 4 $15,000.00
c)Caravan and annex $17,500.00
d)Cash payment by Husband $15,000.00
e)Superannuation NIL
TOTAL $47,503.00
The amount payable by the Husband to the Wife should therefore be an amount calculated by subtracting the sum of $47,503.00 from $178,951.50, namely $131,448.50.
The parties should retain the assets that they currently hold.
I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of Scarlett FM
Date: 10 April 2012
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