AP & ENP
[2002] FMCAfam 164
•27 June 2002
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| AP & ENP | [2002] FMCAfam 164 |
| FAMILY LAW — Property settlement — husband Vietnam war veteran — effect of wife’s psychological or emotional condition — wife suffering from untreated clinical depression — application of s.75(2) factors. |
| Applicant: | A P |
| Respondent: | E N P |
| File No: | (P)MLM 8705 of 2001 |
| Delivered on: | 27 June 2002 |
| Delivered at: | Melbourne (via telephone link) |
| Hearing Date: | 2 May 2002, 4 June 2002 |
| Judgment of: | WALTERS FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Paterson |
| Solicitors for the Applicant: | Kim Paterson & Associate |
| Counsel for the Respondent: | Mr Wood |
| Solicitors for the Respondent: | Rogers & Gaylard |
ORDERS
ENP (hereinafter referred to as “the wife”) pay to AP (herein after referred to as “the husband”) by way of payment to the husband’s solicitors, Messrs. Kim Paterson & Associate for and on behalf of the husband the sum of $27,481.00 (“the payment”) as follows:
(a)the sum of $10,000.00 on or before 31 August 2002;
(b)the sum of $10,000.00 on or before 31 December 2002;
(c)the balance of $7,481.00 on or before 30 June 2003, together with interest on the balance owing at the rate equivalent to that allocated by the ANZ Bank to short term overdraft facilities — such rate of interest to be calculated from 1 January 2003 to 30 June 2003 or the date of payment if earlier
Penalty interest calculated in accordance with the Family Law Rules will apply to late payment of any instalment.
Upon the wife paying to the husband’s solicitors, Messrs. Kim Paterson & Associate for and on behalf of the husband the totality of the monies specified in paragraph 1 hereof (including all interest, if appropriate) the husband do all acts and things and sign all documents necessary to transfer to the wife the whole of his right title and interest in and to the property situated at Carrum Downs in the State of Victoria (“the real property”).
Contemporaneously with the husband’s compliance with paragraph 2 hereof, the wife effect a release of a discharge of any liability the husband may have to any mortgage currently encumbering the property and thereafter indemnify the husband and keep him safe from all claims, actions, suits or demands that may arise out of or in relation to the said property.
The wife do make available to the husband for his collection at his own cost the following items:
4.1 the Pieter Gasson paintings
4.2 the husband’s bank note and coin collection
4.3 the husband’s Omega watch
4.4 the husband’s opal ring
4.5 the bar and bar stools
4.6 the Queen Anne table
4.7 the husband’s Australian passport (if available)
4.8the husband’s war service medals issued as a result of active service in the Vietnam conflict
4.9the husband’s birth certificate (if available)
The husband forthwith do all necessary acts and things and sign all necessary documents to transfer to the wife (at the expense of the wife) all his right, title and interest in the Mazda motor vehicle currently in the possession of the wife.
The wife forthwith do all necessary acts and things and sign all necessary documents to transfer to the husband (at the expense of the husband) all her right, title and interest in the Holden motor vehicle, currently in the possession of the husband.
In the event that the whole of the payment has not been made in compliance with the particulars set out in paragraph 1 hereof, the real property be forthwith sold altogether out of court (“the sale”) and upon completion of the sale the proceeds of the sale be applied:
7.1 firstly to pay all costs, commissions and expenses of the sale;
7.2 secondly to discharge any other encumbrances affecting the real property;
7.3 thirdly so much of the payment as is then outstanding together with interest thereon at the rate prescribed in paragraph 1 hereof to be paid to the husband;
7.4 fourthly the balance to be paid to the wife.
Pending the payment or completion of the sale:
8.1 the wife have the sole right to occupy the real property and during such right of occupation the wife pay all rates and like apportionable outgoings of the real property as they fall due;
8.2 the parties hold their respective interests in the real property upon trust pursuant to these orders;
8.3 neither party encumber the real property without the consent in writing of the other party.
Unless otherwise specified in these orders and save and except for the purpose of enforcing the payment of any monies due under these or any subsequent orders:
9.1 each party being solely entitled to all other property (including choses-in-action) in the possession of such party as at the date of these orders save and except that the chattels in the home being deemed to be in the possession of the wife;
9.2 monies held by the parties in any joint bank account (if any) are to become the property of the wife;
9.3 each party forego any claims they may have to any superannuation benefits belonging to or earned by the other;
9.4 insurance policies (if any) remain the sole property of the owner named therein;
9.5 each party be solely liable for and indemnify the other against any liability encumbering any item of property to which the that party is entitled pursuant to these orders;
9.6 any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
Pursuant to rule 21.15 of the Federal Magistrates Court Rules 2001, the Court certifies that it was reasonable for the parties to employ an advocate.
IT IS DIRECTED THAT:
The proceedings be removed from the Pending Cases List.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
(P)MLM 8705 of 2001
| A P |
Applicant
And
| E N P |
Respondent
REASONS FOR JUDGMENT
Introduction
Before the Court are the parties’ competing applications for property settlement.
Neither party sought any orders in relation to spousal maintenance.
The orders sought by the husband are those set out (under the heading “Applications — Different Orders”) on pages 1 and 2 of his outline of case document (filed 2 May 2002), as amended by the re-calculation included within his supplementary outline of case document (which was faxed to the court on 4 June 2002).
The orders sought by the wife are those set out on pages 10 and 11 of her outline of case document (filed 20 November 2001).
The principal difference between the parties relates to the wife’s retention of the former matrimonial home. Both parties agree that the husband’s interest in the former matrimonial home should be transferred to the wife. The husband proposes that his interest in the home be transferred to the wife upon payment to him of the sum of $54,312.60. The wife’s case is that she should not have to pay any moneys to the husband.
Documents Relied Upon
The husband relied upon the following documents:
a) his application filed 17 August 2002;
b) affidavit of the witness T (sworn 18 October 2001);
c) affidavit of the witness S (sworn 18 October 2001);
d) affidavit of the witness C (sworn 18 October 2001);
e) his affidavit sworn 19 October 2001;
f) affidavit of the witness W (sworn 29 October 2001);
g) further affidavit of the witness W (sworn 19 November 2001); and
h) his further affidavit sworn 26 April 2002.
The wife relied upon the following documents:
a)her response filed 20 September 2000;
b)affidavit of the witness Lamb (sworn 22 October 2001);
c)further affidavit of the witness Lamb (sworn 21 November 2001);
d)affidavit of her next friend (the witness D — sworn 7 March 2002);
e)her affidavit sworn 7 March 2002;
f)her financial statement sworn 7 March 2002; and
g)affidavit of the witness Crewdson (sworn 7 March 2002).
Both parties filed case outlines. The husband’s case outline was filed on 2 May 2002. A supplementary case outline was provided to the Court on 4 June 2002. The wife’s case outline was filed on 20 November 2001.
Next Friend
As indicated above, these proceedings commenced on 17 August 2000 — with the filing of the husband’s application.
On 20 September 2000, a response was filed on behalf of the wife. The response included an application for an order that the wife’s brother, D, be appointed to act as her Next Friend in the proceedings. D filed a brief affidavit and a consent to act as Next Friend.
The application for appointment of a Next Friend was supported by an affidavit sworn by Dr Sharon Lamb on 12 September 2000. In paragraph 3 of her affidavit, Dr Lamb stated:
…in my capacity as treating practitioner for (the wife), I am of the opinion that she is suffering extreme anxiety and depression, particularly relating to family law matters and as a consequence of her present state of health that she is not presently capable of adequately conducting or giving adequate instructions for the conduct of these proceedings.
On 28 November 2000, orders were made — by consent — appointing D to act as Next Friend for the wife in these proceedings.
I shall refer to the wife’s state of health (and, in particular, her psychiatric/psychological or emotional health) later in these Reasons.
Background
The husband and the wife were married (in Melbourne) on 15 November 1980. They had commenced co-habitation in 1973 or 1974. They separated on 1 May 1996.
There are no children of the marriage.
In paragraph 4 of her affidavit sworn 7 March 2002 (which I shall refer to as her trial affidavit), the wife deposed to the following:
…I have two children to a previous marriage, who, during the course of my marriage to the husband herein, resided with their father. My son died in 1982 at the age of 14 years as a consequence of an unfortunate trail bike accident. My daughter is now aged approximately 32 years and is self supporting. The children had contact with me following separation from my former husband and during my marriage to the husband herein.
The husband did not take issue with the paragraph quoted above.
The husband is aged 57 years. He was born in May 1945. The wife is aged 55 years. She was born in December 1946.
The husband served with the Australian Army in Vietnam. His first tour of duty was in or about 1967/8. His second tour of duty was in or about 1970/1. His military service profoundly affected him. He was later assessed as having various “impairments”, the most significant of which appears to be post traumatic stress disorder. In paragraph 23 of his affidavit sworn 19 October 2001, the husband deposes to the fact “…for all practical purposes throughout the period of co-habitation (he) was in receipt of a part TPI pension.” In paragraph 22 of the same affidavit, the husband states that he was “granted a 100 percent TPI pension” in approximately 1991. From the date of commencement of co-habitation until that time, the husband had been engaged in full time employment as a printer.
The wife had various jobs until the loss of her son in 1982. Thereafter, and understandably, she found that she could not work. After a period which is less than clear from the documents filed on behalf of the wife, but which I understand to be approximately 18 months to two years, she returned to work with the ANZ Bank on a part time basis. She continued to work for the bank until October 1996 (approximately 6 months after the date of separation), when she was made redundant. According to the wife, she suffered a nervous breakdown at around that time. In or about November 1997 she returned to work for the ANZ Bank — on a full time basis. She has continued to work for the bank on a full time basis.[1]
[1] See paragraph 36 below.
There appear to have been various stresses in the relationship between the parties from a very early stage. For example, in paragraph 25 of her trial affidavit, the wife deposed to the following:
From about 1981 until the date we separated and whilst we were living at Carrum Downs, (the husband) slept on the loungeroom floor. He only slept in the matrimonial bed, perhaps on a maximum of five occasions during that entire period.
The husband’s response to this paragraph is contained in paragraph 27 of his affidavit sworn 26 April 2002 (which I shall refer to as his trial affidavit). The husband deposed to the following:
As to paragraph 25 of (the wife’s trial affidavit) the reason I did not sleep in the matrimonial bed was because (the wife) would say that I would have a nightmare during the night and thereby I was keeping her awake at night.
It was the wife’s case that the husband abused alcohol throughout the period of their relationship, and that the abuse of alcohol was a financial drain upon the couple. In paragraph 30 of her trial affidavit, the wife asserted that “…were it not for my employment and my management of the family finances, the property acquired during the marriage may not have been so acquired”. In response, the husband did not dispute that his consumption of alcohol involved an expenditure of money. He stated, however, that the wife “…was a compulsory acquirer of odds and ends of a household nature that she rarely displayed but stored in spare rooms until those rooms were literally full of such chattels” and that she “…expended a considerable amount of money otherwise available for savings on such acquisitions…”.
To the extent that it may be relevant to my determination in this matter, I find that the wife was not a compulsive acquirer of odds and ends. No corroborative evidence was presented to support this assertion — which I find to be exaggerated. In any event, the identity of the assets comprising the “pool” of assets available for division between the parties (and the value of those assets) was agreed at the commencement of the trial. If the wife is indeed in possession of “odds and ends” then it would appear that they are now of little value.
After initially residing in rental accommodation, the parties purchased the home at Carrum Downs (“the former matrimonial home”). The former matrimonial home was purchased in 1979 for approximately $45,000. Approximately $38,000 or $39,000 was borrowed from a financial institution in order to supplement the deposit paid by the parties. The loan was later transferred to the ANZ bank — where the wife was an employee.
According to the wife[2], her mother provided the amount of approximately $1,000 towards the purchase of the former matrimonial home — by way of loan. According to the wife, the loan from her mother remains unpaid. The husband has no recollection of a loan from the wife’s mother[3]. No evidence was presented to support the wife’s assertion that moneys had been borrowed from her mother and the alleged loan does not appear as a liability in the schedule of assets and liabilities that was agreed between the parties. I do not accept that such a loan exists.
[2] See the wife’s trial affidavit, paragraph 32
[3] See the husband’s trial affidavit, paragraph 30
The parties resided in the former matrimonial home from early 1979 until the date of separation. The wife has continued to reside in the former matrimonial home since separation.
The moneys secured by the mortgage registered over the former matrimonial home were re-paid by the parties’ joint efforts between 1979 and 1993 (some three years prior to the date of separation). During that period, the wife received income from her (part time) employment with the ANZ Bank and the husband received income from his employment as a printer and from his pension benefits.
In paragraph 32 of her trial affidavit, the wife asserts that, because she was an employee of the ANZ Bank, she was able to arrange for the original loan obtained for the purchase of the former matrimonial home to be re-financed through the ANZ Bank. According to the wife, this involved “significantly lower interest” or a “significantly lower interest rate”. The wife asserts that “…as a consequence, (she) was able to meet the mortgage commitments and discharge the loan far earlier than (she) would have otherwise been able to do”.
According to the husband, the parties chose to meet accelerated mortgage payments — which allowed for the mortgage to be discharged significantly ahead of time. Whilst I accept that the wife’s employment may have lead to the parties receiving more favourable terms or conditions in relation to the mortgage that might otherwise have been the case, I do not accept the wife’s assertion that the reason why the relevant loan was discharged earlier than might otherwise have been the case was due — in some way — to her efforts only. I find that both parties made a financial contribution (whether directly or indirectly) to the payment of the mortgage. As no evidence was presented regarding the actual or approximate benefit to the parties of re-financing the loan through the wife’s employer, I am not prepared to conclude — other than in a very general sense — that the wife’s indirect financial contribution in this regard was of any significance in the context of these proceedings.
The wife remained in the former matrimonial home after the parties separated in 1996. In paragraph 34 of her trial affidavit, she asserts that she “continued to maintain and care for the property” after the date of separation. In response, the husband accepts that the wife has done some maintenance and that, for example, the hot water system has been replaced. He states in paragraph 31 of his trial affidavit, however, that he provided her with $2,000 to help defray costs associated with the replacement of the hot water system — and I accept his evidence in that regard.
Although the wife has maintained the former matrimonial home since the date of separation, she has had the benefit of being able to reside in it at minimal cost. The debt secured by the mortgage over the property had been paid out by the date of separation, and I accept the husband’s evidence that the wife’s “…only obligation as and by way of an outgoing/rent type payment on the subject home in almost six years has been the payment of rates and taxes at the rate of $9 per week…”. The husband has had to provide his own accommodation since the date of separation. He asserts, and I accept, that the cost of providing such accommodation has averaged out at not less than $100 per week over the period of approximately six years.
It would appear that the former matrimonial home has gradually deteriorated, and that certain work is now due to be carried out. In paragraph 36 of her trial affidavit, the wife states that the front gate and toilet cistern are due for replacement, that the property needs to be painted and that various other repairs are necessary.
The fact that certain repair or maintenance work needs to be carried out on the home is of little relevance in these proceedings. That is so because the value of the former matrimonial home was agreed between the parties. In other words, the present value of the former matrimonial home in its current condition was not a matter in issue in the proceedings.
According to the wife, the husband left the home without warning for a week in 1985 and for two weeks in 1991. The husband denies that he left without warning (but apparently does not deny that he left for those periods). During the course of the marriage the husband attended a variety of functions or reunions for Vietnam Veterans. In 1995 he travelled to Washington in the United States of America with a group of his Vietnam Veteran friends. According to the husband, the total cost of the trip was $3,800. The husband concedes that the wife contributed approximately half of this amount. The husband contributed the other half from his savings. At that time, the wife was employed (on a part time basis), and the funds utilised by her to help pay for the husband’s trip to the United States would have had their genesis in her earnings. The funds “saved” by the husband, however, would have been sourced in his pension entitlements.
In paragraph 41 of her trial affidavit, the wife deposed to the following:
Prior to the marriage, I was employed…In about 1980/1981, around the time of our marriage, I left that employ and was then employed on a part time basis with the ANZ Bank. From that time until our separation in May 1996, I continued in part time employment notwithstanding offers having been made to me for full time employment in years prior to that. (The husband) refused to allow me to have any full time occupation as that would impact negatively against his TPI pension. In 1993, an opportunity arose for me wherein I was offered full time employment with the ANZ Bank. (The husband) became very angry and refused to allow me to take up that opportunity. In about October 1996, following our separation, I became unemployed. At about that time, I suffered a nervous breakdown…
The husband denied that he refused to allow the wife to obtain or maintain full time occupation (whether because of his TPI Pension or for any other reason). He also denied that he refused to allow the wife to take up the employment opportunity described by her. In relation to this subject, I prefer the evidence of the husband. I find that the wife worked on a part time basis because of her commitment to the relationship and her desire to provide a supportive environment for the husband[4].
[4] See, in this regard, the report of the witness Crewdson
After the parties had been separated for approximately 11 months, the husband moved to Tasmania. The affidavit material filed on his behalf provides no clue as to the details of his life since that time. It was only as a result of cross examination of the husband (based upon certain comments made by the wife in her material) that the Court was advised — from the husband’s side — that he presently lives with his
“girlfriend”. They have been living together for approximately 12 months. One of his girlfriend’s children (aged 12 years) lives with them.
The Court was provided with very little information regarding the husband’s present financial circumstances, and a financial statement was not one of the documents relied upon by the husband in support of his case. It would appear, however, that his only source of income is the pension entitlements to which reference has already been made. As at 10 January 2001, the husband received a Disability Pension (amounting to $694.60 per fortnight), Service Pension (amounting to $394.10 per fortnight) and a Pharmaceutical Allowance (amounting to $5.80 per fortnight) — all from the Commonwealth Department of Veterans’ Affairs. Those entitlements then totalled $1094.50 per fortnight (or $28,457 per annum). During the course of his oral evidence, the husband said that he had recently received an increase in those entitlements — which now total $1,128 per fortnight (or $29,328 per annum).
The wife is employed on a full time basis as a receptionist. She works for the ANZ Bank in the central business district of Melbourne. Her gross income (from her wages) is in the order of $665 per week (or $34,580 per annum). In addition, she receives interest from an investment in her name. The moneys comprising the investment were sourced in payments received by the wife at the time that she was made redundant from her employment with the same bank in approximately October 1996. At that time she received $5,889 in respect of unused long service leave and holiday pay, together with a “tax free bona fide redundancy payment of $16,793.36”.
Between leaving the bank in late 1996 and re-commencing with it in late 1997, the wife did some “temp work”[5].
[5] See appendix C to Mr Crewdson’s report, at page 35
Apart from her psychological or emotional problems, the wife has suffered various injuries and illnesses since the date of separation. In January 1997 she injured her knee as a result of a fall and was unable to work for a period of approximately 6 weeks. She injured her foot as a result of another fall in June 1998. Once again, she was unable to work for approximately 6 weeks.
It is clear that the wife has been deeply affected by the breakdown of the marriage and its consequences. That is not to say that the wife’s present psychological or emotional condition is referable in its entirety to the marriage, the circumstances of its breakdown and the husband’s behaviour generally. The wife’s first marriage was — in her words — “not a pleasant experience”. In this regard, I find that the wife has significantly understated the position. Her first husband was violent, and physically assaulted her on frequent occasions. The domestic violence to which she was subjected was serious and, understandably, the wife has chosen to do her best to put that aspect of her life out of her mind.
The death of the wife’s son, R, in 1982 also deeply affected her. On page 34 of appendix C to Mr Crewdson’s affidavit, the wife said:
…I knew I was having real difficulties in everything I touched after losing R…I became extremely ill — one thing after another, after his accident, and I did not realise that it was my grief and depression catching up with me.
Mr Crewdson is a clinical psychologist. He is well qualified and properly credentialled. His qualifications and professional experience are described in his affidavit sworn 7 March 2002. I accept his status as an expert in the field of clinical psychology.
Using the DSM-IV categorisation system (being the categorisation system contained in the fourth edition of the Diagnostic & Statistical Manual of the American Psychiatric Association), Mr Crewdson diagnosed the wife as having a generalised anxiety disorder, and an extremely dependent and insecure personality.
On page 5 of his report, Mr Crewdson wrote (under the heading “Conclusion”):
This woman is extremely vulnerable, lacks confidence and has insufficient skills to handle her continuing anxieties. The danger is that she will decline further if placed under further financial pressure and jeopardise her employment. Although she is a basically pleasant and attractive woman, she had little in the way of a support network and the prospects of her even contemplating another relationship are virtually zero.
The loss of her home would be the ultimate “disaster” for her, and the prospect of an unanticipated court battle over it has left her psychologically paralysed.
Its loss would have overwhelming consequences for (the wife). She currently finds it difficult to maintain herself. In addition to an extra financial burden, it is the loss of security and the sense of ultimate rejection, abandonment and betrayal, which she feels has occurred. She is extremely dependent on this house, despite its negative associations.
In turn, a further deterioration in her psychological state may well threaten her capacity to work. If she were to lose her job, her chances of regaining employment would be most unlikely, given her condition, age and the foreseeable economic climate.
The reference to the loss of the wife’s home reflects the wife’s perception that any orders which this Court might make that could have the effect of placing her continued residence in the home in jeopardy would be “catastrophic”. For example, in paragraph 63 of her trial affidavit, the wife said:
…my need to retain the home in which I currently reside and to remove me from that (sic) will have a significant detrimental effect upon me, not only by way of my living circumstances but more particularly by reason of the impact that this will have on my already difficult health circumstances. (The husband), throughout the difficult times and after separation, swore to me that he would never take the house from me and that he did not want anything from inside the home. My financial circumstances are not strong. These proceedings have caused me to incur significant legal expenses which shall eat up all of my financial reserves. I am extremely concerned for my own future security and well being.
The husband’s response to paragraph 63 of the wife’s trial affidavit is contained in paragraph 51 of his trial affidavit. He does not deny the allegation that he swore to the wife that he would never take the house from her. He asserts, however, that “…it cannot be just and equitable that she retains the home without a contribution to me”.
It was not argued on behalf of the wife that the husband was in some way “estopped” from commencing or pursuing proceedings for property settlement. Quite apart from the fact that the wife does not appear to have acted to her detriment in reliance upon any relevant representation by the husband, the fact of the matter is that the Court’s jurisdiction to grant relief under section 79 can only be ousted by Court order, or by a relevant financial agreement. In this regard, I refer to the decision of the Full Court of the Family Court of Australia in Woodcock (1997) FLC 92-739, at 83,968.[6]
[6] I am well aware that Woodcock was decided prior to the amendments to the Family Law Act which introduced, inter alia, the provisions of Part VIIIA, dealing with financial agreements. In my view the thrust of the Woodcock decision remains unaffected. See, in this regard, G v G (2000) FAM LR 592.
The “psychological paralysis” referred to by Mr Crewdson reflected itself (at least partially) in a total inability on the part of the wife to be in the same court room as the husband. According to Mr Crewdson, she was “plainly terrified” of such a scenario. As a result, the trial was conducted by video link between Melbourne and Launceston. This flowed from a recommendation made by Mr Crewdson in the following terms:
Alternative facilities should be provided to enable (the wife) to give evidence in a supportive situation with no direct contact with (the husband). A video link would be appropriate. I would be able to assist her in handling the stress, which the hearing will produce. Without this, she is likely to become incoherent and be psychologically unfit to appropriately portray the facts and circumstances of her life in a way which would be relevant and meaningful to the Court.
Mr Crewdson was in fact present during the hearing to support the wife. She gave evidence and was cross examined. She did not become incoherent and was well able to appropriately portray the facts and circumstances of her life in a way which was relevant and meaningful to the Court.
The wife’s general practitioner, Dr Lamb, gave evidence. I accept her status as an expert in the field of general medical practice (family medicine). She confirmed the contents of her report dated 18 October 2001 (which report is annexed to her affidavit sworn on that day). According to Dr Lamb, the wife suffers from major depression and generalised anxiety disorder. Her symptoms which are consistent with major depression include low mood, insomnia, loss of appetite, agitation, loss of pleasure in activities, loss of energy, fatigue, feelings of worthlessness, reduced ability to concentrate and recurrent thoughts of death and suicide. Her symptoms which are consistent with generalised anxiety disorder include shaking, trembling, muscular tension, fatigue, sweating, palpitations, clamminess, dry mouth, dizziness, stomach upsets, diarrhoea, breathlessness, insomnia, poor concentration, irritability and impatience. The wife described (to Dr Lamb) feeling anxious, worried, fearful, anticipating misfortune and excessive rumination.
Dr Lamb’s evidence was to the following effect:
a)She sees the wife approximately two to three times per month, and likes to keep in contact with her because of the wife’s suicidal ideation.
b)The wife is presently on anti-depressant medication, but there has been a problem finding an appropriate and effective combination of anti-depressant medication.
c)The wife has spoken to her of a catastrophic series of consequences in the event of the loss of her home. The wife sees the loss of her home as the loss of everything that the wife’s life stands for.
d)Mr Crewdson’s report accurately reflects what Dr Lamb perceives the wife’s medical condition to be.
e)She does not anticipate that the wife’s medical/emotional/psychological condition will improve after the completion of these proceedings. The wife’s conditions involve deeper issues of loss and abandonment than those which are directly related to the current proceedings.
f)The wife’s symptoms of anxiety and depression became apparent when the issue of the fate of the former matrimonial home was raised.
g)She is of the view that the wife’s depression is “under treated”, and that she should properly be in the care of a psychiatrist.
h)It is “incredibly difficult”, however, to psychiatrically treat people (such as the wife) who are not “financially buoyant”. That (according to Dr Lamb) is “the nature of the public health system” in this country — and it may ultimately be the case that the wife will only receive the psychiatric treatment that she requires if she actually attempts suicide and is hospitalised as a result.
I accept the evidence of Dr Lamb and Mr Crewdson as it relates to the wife’s psychological, psychiatric and emotional state. I can do little more than express my incredulity at the extraordinary state of affairs described by Dr Lamb. The wife suffers from a serious medical illness (namely clinical depression). It is an illness which can be serious enough to lead to suicide — and yet it is a very treatable medical illness. Dr Lamb confirmed that the likelihood is that the wife can be treated successfully with medication, psychotherapy or a combination of both. That she is unable to obtain the best treatment available is frustrating and distressing for the wife and for those responsible for her care. On an entirely different plane, it insinuates into the proceedings currently before the Court a dimension with which the law as it relates to the division of property between spouses is ill equipped to deal. I shall return to this subject later in these Reasons.
Credibility
Before proceeding further in these Reasons, it is appropriate that I comment upon the credibility of each of the parties.
I observed both parties carefully as they gave their evidence (albeit that the husband gave his evidence by video link from Launceston).
The husband did his best to be frank and open, and he gave a more balanced account of the history of the relationship than did the wife. In general terms, he was willing to “give credit where it was due”, whereas the wife was not. The wife’s trial affidavit was relentlessly critical of the husband. It is apparent to me that she bears resentment towards him and is embittered by what she perceives to be an unfair situation. As both Mr Crewdson and Dr Lamb observed, the wife feels “betrayed and abandoned” by the husband, but her feelings for him remain complex.
I am of the view, however, that the negativity of the wife’s case is likely to be a manifestation of her under treated clinical depression and generalised anxiety disorder — and I refer, in particular, to the symptoms of those conditions set out in paragraph 55 above. She has done her best to provide evidence which is accurate in every respect, but I am of the view that her perception of relevant events has been distorted by the overlay that adheres as a result of her under treated conditions. I find that she was simply unable to provide an objective, unbiased account of the broad scope of the parties’ relationship and their respective roles within it.
It follows that I have found it appropriate to discount certain of the wife’s evidence where it has been directly refuted or otherwise placed in issue by the husband. That is not to say that I have accepted the husband’s evidence in its entirety. Where I have preferred the wife’s evidence to that of the husband, I have said so.
The Law
The general approach that should be adopted by the court in relation to a property settlement application has been described in a great many cases (see, for example, Pastrikos (1980) FLC 91-987, Lee-Steere (1985) FLC 91-626, Ferraro (1993) FLC 92-335, Clauson (1995) FLC 92-595 and Whitely (1996) FLC 92-684). The court must first identify the assets of the parties. It must then attribute a value to each of those assets — usually as at the date of the hearing. Thereafter, it must assess the extent of each party’s contributions under the various subheadings described in section 79(4) of the Family Law Act 1975. Finally, the court must consider the financial resources, means and needs of the parties, and the other matters set out in section 75(2) so far as they are relevant. An adjustment of the amount due to each party by way of contribution is then made by reference to the section 75(2) factors. It is not essential, however, that such an adjustment take place. Generally speaking, an adjustment is made because one party has greater needs and the other has stronger means.
In relation to the contribution of the parties under section 79(4) generally, it has been held that a “global” approach will usually be more convenient than an “asset by asset” approach — although the application of an asset by asset approach does not (of itself) amount to an error of law (see Norbis (1986) FLC 91-712).
Section 75(2) is concerned with the process of arriving at a just and equitable result. It follows that there may be circumstances in which the justice and equity of the case, and the specific provisions of section 75(2), support an adjustment in a party’s favour for matters which cannot comfortably be described as being of financial or economic significance (see McMahon (1995) FLC 92-606 at 82,043).
Under section 79(2), the court is required to be satisfied that the order to be made is just and equitable — not simply that the underlying percentage division of the net value of the parties’ assets is appropriate. In other words, in the consideration of whether the overall result of property settlement proceedings is just and equitable, it is the justice and equity of the actual orders, and not of the percentage distribution, which must be considered (see Russell (1999) FLC 92-877).
Property of the Parties at Trial
During the course of the trial, the identity and value of each item of property was agreed. Thus, the parties’ assets and liabilities at trial are as follows:
Former matrimonial home $
145,000.00
Wife’s savings account
$
561.00
Wife’s managed investment fund
$
24,893.00
Wife’s Mazda motor vehicle
$
1,600.00
Wife’s furniture, chattels and effects
$
3,978.00
Husband’s savings
$
105.00
Husband’s Holden motor vehicle
$
4,500.00
Husband’s furniture, chattels and effects
$ 2,500.00
Monies received by husband after separation (a) From Norwich Union:
$ 6,531.62
(b) From Mercantile Mutual:
$ 10,061.70
(c) From sale of motor vehicle:
$ 1,000.00
$
$
17,593.32
Wife’s visa card debt
$
($454.00)
Wife’s bank card debt
$
($247.00)
Debt in respect of husband’s motor vehicle
$
(4,502.00)
Total $ 195,527.32
Having regard to the concessions made by the parties, it is apparent that the total net value of the assets presently available for distribution between them is $195,527.32. I am conscious, of course, that certain of the figures set out above represent notional assets (being, in particular, the sums received by the husband from Norwich Union, Mercantile Mutual and the sale of his motor vehicle). I note, as well, that the evidence is to the effect that $2,000 from the $10,061.70 received by the husband from Mercantile Mutual — after the date of separation — was paid to or used for the benefit of the wife. Clearly, it is no longer in existence. It is certainly not within the husband’s control.
The reality in the case before me is that a concession has been made as to the size and composition of the “asset pool”. In my opinion it is not to the point that certain of the assets are no longer or may no longer be in existence. The position is analogous to the “adding back” of legal fees paid by the parties during the course of the proceedings (and I note that, in the current case, no attempt was made to re-introduce into the pool of assets the quantum of legal fees actually paid by each of the parties up to the date of the trial).
In Milankov & Milankov [2002] FamCA 195 (unreported decision of the Full Court of the Family Court of Australia, delivered 22 March 2002), the Full Court considered a scenario in which the orders made by the trial Judge granting the wife 90% of the notional pool of assets (which included legal costs already paid by the parties) had the real effect of giving the wife more than the total value of the assets actually available for distribution between the parties. It was argued that such an order was inappropriate and that the Court could not grant to one party assets the total value of which would exceed the actual (as opposed to the notional) value of the available assets.
Nicholson CJ and Buckley J said (at paragraphs 15ff):
…we consider it important to note that in property proceedings of this kind, it is convenient to make a finding as to the assets and liabilities of the parties as at a particular point in time, which is usually the date of the trial. This is in a sense a fiction, albeit a convenient one. It is a fiction because the parties’ financial affairs obviously vary from day to day, week to week and month to month.
No doubt by the time judgment is given after one or two months, the size of the pool will have altered, although not usually significantly enough, in the overall scheme of things, to warrant an application to re-open the case.
…In the (Milankov) case, it is common ground that the (approximately $97,000) expended by the appellant husband and the (approximately $5,000) expended by the respondent wife in legal costs were taken from the pool and then added back for the purposes of constituting the property pool in the proceedings before the trial judge…
…the authorities do not demonstrate an error by the trial judge that this Court is required to correct.
Kay J (dissenting as to this issue) said (at paragraphs 112ff):
The process to be followed in section 79 proceedings is well settled…it generally involves the Court first determining what the parties’ property consists of before determining whether it is appropriate and just and equitable to make an order altering the parties’ interest in it.
In several circumstances, well identified by the cases, this first step often involves including in the ‘pool of assets’ items which no longer exist but which in order to do justice and equity to the parties need to be notionally considered in determining what a fair share of the existing pool of assets should be…Frequently this involves a notional consideration of assets which have been in the possession of one of the parties at some time after separation but which have been dispersed for that party’s own use. It often includes adding back moneys that each party has spent in respect of their legal costs. Not to do so would be to offend the principles of section 117 of the Family Law Act which require that each party to proceedings should bear their own costs unless the Court otherwise orders.
The inclusion of these notional add-backs to the pool of assets ought not to be seen as a method of increasing the size of the pool but merely assists the Court in determining what should be a fair share of the pool that is available for distribution.
In my view, the law is well settled. The Court cannot make an order for the alteration of property interests that extends beyond the available assets of the parties…However this restriction does not require the Court to be able to clearly identify those assets…
In an appropriate case, where moneys have been removed from the pool of assets by expenditure or otherwise, it may be appropriate to bring an action under section 106B of the Family Law Act (formerly section 85) in order to set aside a disposition which has the effect of defeating an order. This would have the effect of bringing the assets dealt with by that disposition back into the pool of assets to be made available for division between the parties.
In the present case, the orders which I propose to make will not “extend beyond the available assets of the parties”, and hence the second part of Justice Kay’s discussion of the relevant principles in Milankov is not directly in point. In any event, Justice Kay’s view in this regard was not shared by the majority. In my opinion, the concept of the “convenient fiction” is a logical and appropriate one, and may well be the only just and practical method of approaching the property settlement “exercise”. With the greatest of respect to his honour Justice Kay, it seems to me that the “shoe should be on the other foot” — particularly where a concession has been made as to the size of the asset pool. In other words, instead of a party who has not removed assets from the available pool by expenditure or otherwise having to make an application under section 106B of the Act to bring those assets back into the pool, the party who removed them should have the obligation of demonstrating that they should not properly form part of the pool (whether notionally or otherwise).
Nicholson CJ and Buckley J formed a similar view in the following passages (at paragraphs 18ff):
It was submitted on behalf of the respondent wife that the appellant husband had acceded at trial to the inclusion of the legal costs paid back to the pool of assets…and that he could not now argue that her Honour should have made findings as to the size of the pool of assets that was any different to the concession made. This submission was based upon the Vakauta v Kelly (1989) 167 CLR 568.
The appellant husband’s answer to this argument is essentially reflected in the view that has been taken in the reasons of Kay J dealing with this ground of appeal. In our view, even if we are wrong in taking the view that the pool was not limited to the available assets, this concession provides an unanswerable argument to the husband’s contention on appeal.
…counsel (for the husband)was given ample opportunity to seek to re-visit the concession and was perfectly content to make the concession that he did and…we further consider that it was a proper concession, since the husband had in fact expended what were clearly assets from the pool on his legal costs.
We consider that it would make a mockery of property proceedings in this Court if parties were able to approbate and reprobate as the husband seeks to do here, after the event, having clearly conceded a fact situation before the trial judge.
As I understand the evidence, the husband has no superannuation entitlements. According to the wife’s financial statement, her superannuation entitlements with the ANZ Australian Staff Superannuation Scheme have a present value of approximately $9,536.
The husband has the pension entitlements to which I have already made reference. Neither party has any other financial resources of which I am aware.
Contribution
It was argued by Mr Paterson on behalf of the husband that the parties’ contributions (in all their various guises) should be regarded as equal from the date of commencement of co-habitation to the date of trial. Mr Wood on behalf of the wife argued that an appropriate split on the basis of contribution alone (in respect of the same period) is 40% to the husband and 60% to the wife.
For much of the parties’ relationship the wife was working on a part time basis. She has worked on a full time basis since approximately 18 months after the date of separation. During the course of her evidence, the wife conceded that the husband’s income exceeded hers over the period of the relationship. The husband’s source of income was from his earnings as supplemented by his pension entitlements. From 1993 (at least) his only income was from his pension entitlements.
Both parties contributed their income to the acquisition of the former matrimonial home, and I find that it was due to the efforts of both that the mortgage encumbering the property was discharged earlier than it would otherwise have been.
Amongst the assets conceded as being available for distribution between the parities are the funds now held by the wife in a managed investment fund[7] and the amounts paid to the husband by Norwich Union and Mercantile Mutual. I find that these amounts (or, perhaps more accurately, the parties’ entitlements to these amounts) were accumulated — or substantially accumulated — during the course of the parties’ relationship. Although the primary, direct contribution to these items was made by the party to whom the benefit was ultimately paid, “offsetting” contributions were made — in an indirect manner, or otherwise to the welfare of the family — by the other party. I note that in paragraph 39 of the wife’s trial affidavit, she asserts that she made all payments in respect of the Mercantile Mutual policy. In response, the husband asserts that the premiums were “effectively paid from joint funds”. I accept the husband’s evidence in this regard, and find that the parties effectively pooled their funds during the period of their relationship. It follows that little turns on a formal analysis of the accounts from which amounts were paid.
[7] As to the history of these moneys, see paragraph 51 of the wife’s trial affidavit.
The husband denied that the wife had been offered a full time job during the period of cohabitation and that he had prevailed upon her to reject it. I accept his evidence in this regard. Further, the husband said that he had never been angry with any position that the wife had taken up. I accept his evidence in this regard as well.
The wife asserted that she assisted the husband with his applications for the pensions which he has now received. Clearly, more than one such application was made. The husband did not dispute that the wife was involved in the process and assisted him — and I accept that she did. The husband also said — and I accept — that he had an advocate assist him as well. In the overall context of the parties’ relationship, I find that the wife’s contribution in this regard was a minor one.
There were no children of the parties’ marriage. The wife’s two children of her first marriage did not live with the parties on a full time basis.
During his evidence, the husband conceded that he “possibly” demonstrated a drinking problem during the course of the relationship. He accepted that his consumption of alcohol had an economic effect upon the lives of the parties. Clearly, it had other effects as well.
The husband gave evidence that he would drink to excess approximately once per month, and he agreed that, on average, he spent approximately $70 per week on alcohol during the period of the relationship. He estimated that something between 10% and 20% of his income was spent on alcohol and cigarettes.
At the conclusion of her evidence, the wife conceded that the husband did gardening, paving and landscaping at the former matrimonial home. She also conceded that he painted the external windows. She said that he would cook evening meals and that he would occasionally vacuum the home. She also said that he “fixed things” in the home.
In paragraph 49 of his trial affidavit, the husband stated that he “…would be churlish not to concede that living with a Vietnam Veteran who has been adjudged entitled to a TPI and Service Pension is ‘a piece of cake’”. I assume that the word “not” should appear before the words “a piece of cake”.
I do not accept that the husband’s behaviour during the parties’ relationship and his departure from the marriage (including the circumstances of the breakdown of the marriage) were the sole cause of the wife’s present psychiatric, psychological or emotional problems. They most certainly contributed to the difficulties that the wife now faces, but the wife’s desperately unhappy first marriage and the tragic loss of her son have also played a very significant part in bringing the wife to the point that she now finds herself.
The wife has had the exclusive occupation of the former matrimonial home since the parties separated in 1996. The only expenses that she has had in relation to the home comprised some repairs and the payment of rates. During the period since separation the husband has had to find other accommodation for himself, including rental accommodation.
The wife has been employed on a full time basis for the past four years.
I take into account, as well, that the husband provided the wife with $2,000 from the proceeds of the Mercantile Mutual policy. In the context of the present proceedings, this may be a relatively minor factor, but I take it into account nevertheless (because, after all, the whole of the Mercantile Mutual payment has been deemed to be a notional asset in the hands of the husband).
Had it not been for the husband’s problems with alcohol, I would have concluded that the parties’ contributions (in all their various guises) from the commencement of cohabitation to the date of trial were either equal or slightly in favour of the husband.
In Kennon v Kennon [1997] FLC 92-757, the Full Court said (at page 84, 294):
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within section 79. We prefer this approach to the concept of ‘negative contributions’ which is sometimes referred to in this discussion.
In the above formulation, we have referred only to domestic violence…but its application is not limited to that.
The Full Court continued (at page 84, 294):
It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect…
Taking into account the whole of the evidence before me, I am satisfied that the husband’s behaviour did indeed have “a discernible impact upon the contributions of the other party”. The wife’s ability to keep house (or assist the husband in keeping house), work efficiently and with focus in an attempt to improve the economic circumstances of the parties and to provide a happy, secure and supportive environment for this small family comprising the husband and herself was significantly affected by the husband’s at times selfish and thoughtless behaviour. Further, having regard to the amount of money spent by the husband on alcohol, I find that the husband’s behaviour had an adverse economic impact on the welfare of this small family. Overall, I find that the wife’s contributions were significantly more arduous than they ought to have been, had the husband behaved in a fair and responsible manner.
Taking into account the various aspects of the parties’ contributions discussed above (but bearing in mind that the information presented at trial was extremely limited), I conclude that an appropriate division of the parties’ assets available for distribution between them at the present time — on the basis on contribution alone — is approximately 55% to 60% to the wife, and the balance to the husband. I find that it would be intellectually dishonest for me to adopt one of the percentages to which I have referred in preference to the other, and therefore adopt a mid point position of 57.5%.
Section 75(2) Factors
So far, in considering the question of property settlement, I have addressed the question of contribution only. Quite clearly, the court is entitled to make an adjustment to a party’s property settlement entitlement on the basis, inter alia, of both parties’ respective means and needs.
The Family Court has been critical of “short hand terms” being used to describe the last step in the property settlement exercise — preferring to refer to it simply as “the section 75(2) factors” (see Clauson (1995) FLC 92-565). In essence, section 75(2) is concerned with the process of arriving at a just and equitable result (see Waters& Jurek (1995) FLC 92-635).
I have already recorded the age and state of health of each of the parties — although my knowledge of the husband’s state of health is extremely limited.
I have also recorded the income, property and financial resources of each of the parties. It would appear that the husband does not have the capacity for appropriate gainful employment. The wife is presently employed, and I find that she has the capacity to continue in her present employment for the foreseeable future.
I am disheartened by the evidence of Dr Lamb to the effect that the wife is in need of psychiatric treatment to enable her to deal with the depression with which she is presently suffering, that that illness is presently under treated and that it will eventually impact upon the wife’s capacity to maintain employment. The evidence does no more than allow me to hope that the resolution of these proceedings will enable the wife to move towards an improvement in her psychological and emotional state. The orders that I propose to make should enable her to retain the former matrimonial home and begin the slow process of dealing with those factors which have had such a profound effect upon her self esteem and her physical, psychological and emotional well being.
Put at its simplest, it appears to me that if the wife has been able to maintain her employment during the pendency of these proceedings, then she should be able to maintain it after the proceedings are concluded (provided, of course, that she retains her home).
There are no children of the marriage.
Both parties have modest commitments that are necessary to enable them to support themselves. They are not responsible for the support of any other person.
The husband is eligible for the pensions, allowances or benefits to which reference has already been made. I have already recorded that the pension benefits to which the husband is entitled currently amount to $29,328 per annum. These benefits are CPI indexed. The wife (whose present salary amounts to $665 per week) has no such benefits — although she is a member of a superannuation fund with a total present benefit of approximately $9,536.
According to the husband’s supplementary outline of case document provided to me on 4 June 2002, the wife’s superannuation entitlements were worth $10,431 as at 20 December 2000. In the context of these proceedings, however, I am of the view that the difference between the figures used by the husband and those used by the wife is insignificant and will make no difference to the overall result.
Notwithstanding certain comments that I had made during the course of the proceedings, the wife did not provide actuarial evidence of the value of the husband’s pension entitlements until the commencement of the final day of the trial. Having regard to the fact that the evidence was received so late, to the fact that the husband was unable to effectively respond to it and to the suggestion that it may contain substantial or significant errors, I refuse to allow the wife to rely upon the same.
In Perrett & Perrett (1990) FLC 92-101, the Full Court of the Family Court of Australia dealt with a pension entitlement similar in nature to that of the husband in the present proceedings. The husband’s pensions comprise an entitlement to receive a series of payments for the rest of his life. He is not able to capitalise them. The Full Court was of the view that the proper approach is to view the pension entitlements as “a continuing and permanent financial resource under section 75(2) and to treat (them) accordingly”.
In Morse & Morse & Esmore Pty Ltd (unreported decision of Holden CJ in the Family Court of Western Australia, number PT6639 of 1996 — judgment delivered 18 November 1997) the Chief Judge of the Family Court of Western Australia said:
It was urged upon me…that Perrett stood, if not as authority for, at least a guideline as to how one ought to adjust to take into account such a financial resource. In that case the Full Court determined that the appropriate way in which to take into account the financial resource of the pension was to make an adjustment in the wife’s favour of two years’ pension payments. In my view, Perrett’s case does not stand as authority for or even a guideline as to how this pension ought to be taken into account. The Full Court’s determination depended upon the facts of that particular case and one can imagine many cases where it would be appropriate to depart from the course of action which the Court took. As the Full Court said in Clauson (1995) FLC 92-595:
It has long been recognised that in most cases the most valuable “asset” which a party can take out of the marriage is a substantial, reliable, income earning capacity…
It is true in this case that the husband is not taking out of the marriage a substantial pension but it is nevertheless a significant one. Furthermore, he is not taking out an income earning capacity. He is taking out a guaranteed income for the rest of his life and which does not preclude him from otherwise exercising an income earning capacity.
My attention was also drawn to the decision of her honour Justice Brown in Elliott (ML3961 of 1998 — unreported, judgment delivered 4 February 2000) and the decision of the Full Court in Hein (appeal number SA13/95 — unreported, judgment delivered 28 June 1995). In the former case, her honour referred to Perrett and Hein as being “examples of cases where a similar approach was taken (namely to make an adjustment in the wife’s favour of two years’ pension entitlements), but neither is authority for the principle that that course must be followed”.
At the end of the day, none of the cases to which my attention has been drawn provides a complete answer to the manner in which I should deal with the husband’s on going, secure pension entitlements.
I take into account that each of the parties is entitled to a standard of living that is reasonable in all the circumstances. In this case, the wife will retain the former matrimonial home and the husband will have to continue in rental accommodation. That arrangement has adhered, of course, since separation.
Neither party seeks an order for spousal maintenance from the other.
The duration of the marriage has not, in itself, affected the earning capacity of either party.
I have already recorded that the husband is presently cohabiting with another person. The financial circumstances relating to the cohabitation are not apparent in the material made available to me. It would appear, however, that the husband’s partner supports herself and that this is a relatively insignificant factor in these proceedings.
Section 75(2)(o) requires me to take into account any fact or circumstance which, in my opinion, the justice of the case requires to be taken into account. The breadth of this provision is less than clear[8] but, in my opinion, it permits me to have regard to the wife’s psychiatric, psychological and emotional health and the likely impact upon her of any order that would have the effect of her losing the ability to reside in the former matrimonial home. Both Mr Crewdson and Dr Lamb described those consequences — from the point of view of the wife — as being “catastrophic”. This is a factor that I do take into account in these proceedings, and I have done my best to give appropriate weight to it. I am fully aware, however, of the provisions of section 79(2) which prohibit me from making an order under section 79 unless I am satisfied that, in all the circumstances, it is just and equitable to make the order. I am acutely and painfully aware that, in the circumstances of the present case, that which may be perceived as a just result from the point of view of the wife may well be perceived very differently from the point of view of the husband — and vice versa. In the end, I can do no more than take into account all the relevant factors and give them such weight as I consider appropriate.
[8] See, for example, the discussion of the provisions of s75(2)(o) in Butterworths Australian Family Law Service (Vol 1) at paragraphs [s75.48-52A] and Dickey “Family Law” (4th Edition – Lawbook Co. 2002) at pp 490-499
Clearly, the most significant of the section 75(2) factors are the wife’s state of health (in the broadest possible sense) and the husband’s pension entitlements. That is not to say that I have ignored the other factors. I am, of course, aware that the wife’s present earning capacity is greater than that of the husband (although the reality is that the husband does not have to “work” in gainful employment in order to receive the income to which he is presently entitled).
On the basis of the evidence before me, and having regard to the fact that the purpose of the section 75(2) adjustment is to assist the Court with the process of arriving at a just and equitable result, I conclude that an adjustment should be made to the wife’s entitlement (on the basis of contribution alone) by increasing that entitlement from 57.5% to 75%. On the basis of the figures set out in paragraphs 65 and 66 above, this means that the wife should receive by way of property settlement assets to the total value of $146,645.49 (being 75% of $195,527.32).
It has been agreed between the parties that certain items presently in the possession of the wife are to be delivered to the husband. These items have an agreed value of $1,200. It follows that the value of the furniture, chattels and effects to be retained by the wife is $2,778 (being $3,978 less $1,200). Overall, therefore, the total value of the assets and liabilities currently in the wife’s possession, or otherwise to be retained by her, is $174,131. If the wife is entitled to assets to the total value of $146,645.49 (which I shall round up to $146,650) then she should be obliged to pay to the husband the amount of $27,481 — in order to ensure that she retains or receives assets totalling 75% of the value of the asset pool as I have found it to be.
One of the most difficult aspects of the present case is the relatively modest size of the asset pool. The Full Court has cautioned against assessing section 75(2) factors in percentage terms without considering the real impact of any proposed adjustment. In other words, the real impact in money terms is “the critical issue” (see Clauson (1995) FLC 92-595). In the present case, the section 75(2) adjustment equates to just over $34,200 (being 17.5% of $195,527.32). Moreover, the difference between the value of the assets and liabilities to be retained by the wife and those to be retained by the husband equates to 50% of the asset pool (or $97,763.66). I am satisfied that, in the circumstances of the present case, the adjustment is proper.
I am satisfied that the orders which I propose will have no significant effect upon either parties’ earning capacity.
I am conscious of the fact that the wife has certain moneys available to her (being her investment) which could be paid to the husband in partial satisfaction of the amount to which reference has been made. During the course of her evidence, the wife said that she thought that she may be able to obtain a loan from her employers (the ANZ Bank) if it should become necessary for her to do so. Because of her psychological and emotional state, however, she had not found herself able to pursue her enquiries in this regard.
In the circumstances of the present case (and bearing in mind the period of time which has elapsed since the parties separated, and the husband’s representation to the effect that he would not make a claim against the former matrimonial home) I am of the view that the wife should be given time within which to pay the sum of $27,481 to the husband. I propose that the amount be paid as follows:
a)$10,000 on or before 31 August 2002;
b)$10,000 on or before 31 December 2002; and
c)$7,481 on or before 30 June 2003.
The final payment (being the amount of $7,481) will bear interest at an appropriate commercial rate, such interest to be calculated from 1 January 2003. Penalty interest (calculated in accordance with the Family Law Rules) will apply to late payment of any instalment.
I shall now hear Counsel as to the precise terms of the orders sought by the parties in order to give effect to the terms of this Judgment.
I certify that the preceding one hundred and twenty-three (123) paragraphs are a true copy of the reasons for judgment of Walters FM
Associate: Paul O’Halloran
Date: 27 June 2002
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