ARENSON & ARENSON

[2019] FCCA 3305

FEDERAL CIRCUIT COURT OF AUSTRALIA

ARENSON & ARENSON [2019] FCCA 3305

Catchwords:
FAMILY LAW – Property dispute over very small pool – long relationship – party’s contributions and future needs equal – pool divided equally between the parties.

Legislation:

Family Law Act 1975 (Cth), s.75(2)(o)

Cases:

Stanford v Stanford [2012] HCA 52

Applicant: MR ARENSON

Respondent: MS ARENSON

File Number: DGC 1262 of 2019

Judgment of: Judge Burchardt

Hearing date: 25 October 2019

Date of Last Submission: 25 October 2019

Delivered at: Dandenong

Delivered on: 22 November 2019

REPRESENTATION

Counsel for the Applicant: Mr Moisidis

Solicitors for the Applicant: Michael Smith & Associates

The Respondent: In person

ORDERS

1. The wife pay the husband $4,500 (“the payment”) within 60 days.

2. That in the event that the whole of the payment has not been made by the date, the real property situate at A Street, Suburb B, Victoria be forthwith sold together out of Court (“the sale”) and upon completion of the sale, the proceeds of the sale be applied:

   (a)Firstly to pay all costs, commissions and expenses of the sale;

   (b)Secondly to discharge the mortgage and any other encumbrance affecting the real property;

   (c)Thirdly so much of the payment as is then outstanding together with interest thereon at the rate of 7.5 per centum per annum adjusted monthly from the date to the husband.

   (d)Fourthly the balance to the wife.

3. That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:

   (a)Each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) owned by or in the possession of such party as at the date of these orders (the furniture, personal possessions, and like chattels in the property being deemed to be in the possession of the Husband/Wife).

   (b)Monies standing to the credit of the parties in any joint bank account are to become the property of the Husband/Wife.

   (c)Insurance policies remain the sole property of the owner/beneficiary named thereon/in.

   (d)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.

   (e)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.

IT IS NOTED that publication of this judgment under the pseudonym Arenson & Arenson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

DGC 1262 of 2019

MR ARENSON

Applicant

And

MS ARENSON

Respondent

REASONS FOR JUDGMENT

Introductory

1. This is a property dispute over a very small pool.  The applicant husband seeks to retain his superannuation ($33,000) and that the respondent pay him a sum that is to be determined as just and equitable by the Court to purchase out his interest in the former matrimonial home.  The respondent seeks to retain the matrimonial home in its entirety and that there be a superannuation adjustment of $10,000 in her favour out of the husband’s superannuation.

2. In my view, and for the reasons that follow, the just and equitable disposition of this matter is that the wife pays the husband $4,500 and retains the matrimonial home, together with its mortgage, and the husband retains his superannuation.

Agreed or Uncontroversial Matters

1. The applicant was born on … 1968 and the respondent was born on … 1968.  They do not agree as to the date of their cohabitation and marriage, the latter of which is surprising, but on any view of the matter the least lengthy assertion as to the length of the relationship is from … 1996 to May 2016 (wife’s affidavit, 7 July 2019).  Although divorced on 22 April 2018 it is still convenient to refer to them as husband and wife.

2. The parties have four children whose dates of birth do not appear to be denoted with precision anywhere but it would seem that Ms E is aged 24, twins Mr F and Mr G are aged 22, and Mr H is 18.  Ms E lives with her mother, and there is also in the house Ms E’s child.  Ms E pays $75 per week to her mother to cover all her expenses albeit that she has an income of some $500 per week. 

3. Both the parties are wholly supported by disability support Centrelink payments.  The husband has not worked for 18 years and the wife, who has the misfortune to suffer from fibromyalgia has not worked throughout the relationship or subsequently. 

4. Both parties are in poor health and face a number of not insignificant ongoing health difficulties. 

Stanford v Stanford

1. Despite the small size of the pool, both parties seek that there be a property adjustment.  In a pool of this size there might be something to be said for taking a global approach and making no adjustments.  Nonetheless, it would not, in my opinion, be just and equitable that there not be a property adjustment as indicated for the reasons that will be set out. 

The Pool

1. The non-superannuation pool consists of:

   a)The former matrimonial home, $195,000 (despite being bought for $200,000 in 2009).

2. The mortgage on the property is $152,300.

3. For reasons discussed during the hearing with counsel for the applicant, I do not propose to allot a value to the parties’ cars.  The husband desires to retain an unregistered Motor Vehicle J which is presently on the matrimonial home and the wife has no objection to his collecting it.  Its nominal value is $2,000.  The wife has a Motor Vehicle C alleged to be worth $8,500 upon which some $2,000 or thereabouts is still owing in joint names finance.

4. As I indicated to counsel, these vehicles are of no real realisable value.  They simply represent an asset that the parties use to get from A to B and if they were to sell them they would simply have to buy another.  It is inappropriate to include them in the pool. 

5. Likewise, there is asserted to be a diamond ring in the wife’s possession worth $2,000.  There is no valuation of it.  Although it is specified to be worth $2,000 in the wife’s Financial Statement and in theory it could be taken as an admission against interest, there is nothing to suggest that this represents a chattel of any meaningful value in terms of resale and likewise I would exclude this from the pool also, especially since the only evidence suggests that the wife paid for it herself (see chronology to the wife’s affidavit).

6. The only other matter in the pool is the husband’s superannuation of some $33,000.  He has also had to access some of that on hardship grounds to meet other payments.

Contribution

1. The parties’ affidavit material is sparse indeed.  Doing the best one can in a somewhat arid evidential desert, and given the length of the relationship, I would have no hesitation, as counsel for the applicant submitted, in assessing contributions as equal.

Future Needs

1. Both these parties are in equally difficult health and have, it would seem to me, poor prognoses both as to their health.  Future employment seems inconceivable for either of them.  Ordinarily, once again, it would be inappropriate to make any adjustment. 

What Was Said at Court

1. In order to understand the dispute as it was actually articulated, it is more appropriate to set to one side the parties’ affidavit material, paraphrased in the broadest terms above, and concentrate on what was put.

2. Counsel for the applicant opened the case on the footing that it was a 22-year relationship with a modest pool.  He referred to the valuation of the house and its value and its purchase price and covered the mortgage liabilities and the two and a half thousand dollars owing on the wife’s car.  Counsel traversed a number of chattels such as a caravan, canoe, and other matters.  It had originally been proposed that the wife sell these and the proceeds be divided equally but the wife says she cannot sell.  The husband would like to take them but cannot.  They should be excluded from the pool accordingly.

3. Counsel noted that of the four children, Mr H lives with the mother, that the others are independent (the mother’s evidence later contradicted this in relation to Ms E).  Counsel referred to the husband’s depression and anxiety.  The wife has paid the mortgage since separation in 2016 and the husband lives with his parents, albeit his most recent affidavit shows that this is becoming fractious.

4. Counsel submitted that the difficulty in the case was that the husband says the wife has a house in Suburb K built in 2000.  The husband was retrenched, and his $30,000 redundancy pay was applied to building the house.  The wife’s parents are the registered owners.  The husband and wife lived there till 2009 when they moved out following an assault by the wife’s brother.  It was open to the wife to seek redress from her parents.  The mortgage on the matrimonial home was in joint names, and the wife would need to re-mortgage to remove this liability.

5. The husband was called and adopted his affidavits as true and correct.  He does not now want the chattels that were in dispute because his father has denied him permission to have them.

6. Under cross-examination, it was put to the husband that he could rent an appropriate place to store the caravan and boat and other matters for $5 a week.  The husband agreed that this was the case, but said he could not afford it.  He did not want the chattels.

7. The wife, in opening address, said that the parties would never have been able to obtain the loan which enabled them to buy the former matrimonial home if she was not aboriginal.  Her daughter lives with her and has a heart condition.  Her grandchild has just turned five and is in the process of being diagnosed for autism.  The house is in disrepair.  She has paid for the solar panels, water rates, electricity and all bills.  She would like to fix the property up.  She would like the husband to pay the three and a-half years of the joint loan (I understood this to mean that she seeks that he pay half the monies that she has expended on the mortgage since separation).  She, herself, has suffered a mini stroke in April 2019.  (It should be noted there is no medical evidence to support this, but as with the husband’s asserted difficulties, I am prepared to accept in their favour that they do, indeed, exist).

8. The wife was called and adopted her affidavits and Financial Statement.  Under cross-examination, she confirmed that Ms E has been living with her for 18 months, and that Ms E receives $501 per week.  Of this, she pays $75 to the wife for everything.  This was an agreed figure, and Ms E cannot pay more.  (It is not apparent to me why Ms E would be unable to do so).  The wife confirmed that it was a joint mortgage and she had been in contact with the financers.  She was in a position to refinance the mortgage to remove the husband as a joint mortgagor.  She can also refinance the $2,500 car loan, but needs a Court order to do so.  She has no idea how long repaying that debt will take.  The car is a Motor Vehicle C which is financed through a Motor Vehicle D Finance loan by the parties jointly.  There is only $2,500 owing, and she can continue to repay.  She is paying a minimum of $20 per week, but can indemnify the husband against this loan.  She cannot, however, further encumber the house as you can only take out a loan for the house itself from the relevant Aboriginal lending entity.  You can seek $20,000 for further renovations, but not otherwise draw upon the loan.

9. The wife was cross-examined about the Suburb K property, and confirmed that it was built by the parties.  The husband put in $30,000 which paid for the builder.  She did not know how much the exact amount of the additional funds expended, but everything was done using second hand goods.  It was all done on the cheap.  It has only one and a-half floors, having a mezzanine floor.  They did, indeed, leave in 2009 because of an assault by her brother, but she is now on good terms with her brother and parents.  Her brother and father were in Court.  Her father owns the property.  She has not sought money from him.  She has discussed it with her father.  The wife described it as “it is null and void.”  They lived there rent-free for 10 and a-half years before the property was built.  Her parents had paid insurance upon the Suburb K property when it was built for the last 10 years.  She had calculated that she and the husband owed her parents over $100,000.

10. I would interpolate and say that this assertion is plainly incorrect.  The wife confirmed that there was never any agreement that they would pay rent to her parents prior to moving into the Suburb K property.  When pressed, the wife said that if all else fails, she could probably move back to the Suburb K property, but did not know where her daughter would go, as her son has a scholarship to the school he presently attends. 

11. In final submissions, Counsel submitted that normally this would be a fifty-fifty case.  The husband has his superannuation and the car.  He sought the orders in his amended application, and that the wife refinance the home.  He sought default orders for sale if the sum the Court ordered the wife to pay was not paid.

12. In final submissions, the wife indicated she wanted the husband’s caveat on the property removed (something that would plainly have to occur).  She wanted out of the husband’s superannuation her share of the bills.  She would be happy with $10,000.  This figure, as I understand it, represents half of the utilities and the like which the wife has paid since separation.

Consideration of the Matters in Dispute

1. While the husband must have generated some of his superannuation during the relationship, he has not worked since 2001, if I understand it correctly, and as a matter of common sense, only part of his superannuation can have accrued during the relationship.  Much of it will have come by increases in the superannuation fund’s returns, more generally, over the last 18 years.  There is a fundamental methodological fault in the mother’s reasoning.  She is seeking that the husband repay her, in effect, for the money she has paid on the mortgage and the utilities since separation.  She appeared to regard this as being on the footing that the mortgage was a joint debt.  This reasoning leaves wholly to one side the fact that she has been in sole occupation of the properties throughout the relevant period.  It is plainly unjust and inappropriate to require that the husband contribute from his superannuation to the mortgage costs and associated utility costs that have been solely to the benefit of the wife since separation.

2. So far as the chattels are concerned, the husband has made it plain that he does not want any of them.  As I indicated to the parties during the course of the hearing, it will be open to the person in whose possession any particular chattels presently are to deal with them as they wish.  If the wife, contrary to her asserted present position is sufficiently recovered in health to be able to sell any of them, then she can keep the monetary gains realised thereby.  Given the sort of chattels we are talking about, I suspect any such monies would be extremely limited.  If neither party wants them, then so be it.  I do not propose to include them in the pool either as a future resource or a present asset.  Where both parties say they simply do not want them, this seems to me the only possible outcome.

3. This brings us to the overarching position.  There appears to be something of the order of $42,000 worth of equity in the matrimonial home.  It is, however, held on what appear to be very generous repayment terms from the mortgagee.  I accept, because it was not challenged that the parties were only able to buy the property because of the wife’s aboriginal heritage, but the property was bought in effect through the first home owners grant to which in a sense, they both contributed.

4. This is the only real property of any moment that the parties possess.

5. Otherwise, the husband has his superannuation in the sum of $33,000.

6. The wife also plainly does have some sort of beneficial interest in the Suburb K property. As she says herself, she could, if it really came to it, move there herself. This must be correct because at least from its construction in 2003 until 2009, the entire family was able to live there. All four children were presumably, for at least part of the time, living there together with their parents. This is a resource, albeit inchoate, that the Court can properly pay regard to pursuant to s.75(2)(o) of the Family Law Act 1975 (Cth).

7. In my view, the benefit to the wife in this regard, however, is offset by her continuing care of Mr H and, more particularly, Ms E and her grandchild.  In the end, in my view, these matters all just about balance each other out.

Conclusion

1. In my opinion, the just and equitable outcome of this lengthy relationship is a division of the parties’ assets as I have found them to be.  The total value of the pool is some $75,000.  An equal division of that pool will give each of the parties $37,500.  I am going to direct the wife to pay the husband four and a-half thousand dollars, and that he retain his superannuation.  In my view, this is a just and equitable outcome in all the circumstances. 

2. It should be noted that it is little short of heart wrenching to be adjudicating a dispute of this character.  Both of these parties have fared poorly in the material advancement of their affairs.  I would only wish that there was more money to divide, but the result I am imposing does the best I can in these stricken circumstances.

I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Judge Burchardt.

Date: 22 November 2019