ARGYLE & ARGYLE
[2021] FCCA 505
•22 March 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ARGYLE & ARGYLE | [2021] FCCA 505 |
| Catchwords: FAMILY LAW – Property – contributions – s.75(4) factors |
| Legislation: Family Law Act 1975 (Cth), ss.75(2), 79(2), (4) |
| Cases cited: Stanford v Stanford (2012) 247 CLR 108 AJO & GRO (2005) FLC 93-218 C & C [1998] FamCA 143 Townsend & Townsend (1995) FLC 92-569 Jones v Dunkel [1959] HCA 8 Miller v Miller [2009] FamCAFC 121 Griffith v Kerkemeyer [1977] HCA 45 Robb v Robb (1995) FLC 92-555 |
| Applicant: | MS ARGYLE |
| Respondent: | MR ARGYLE |
| File Number: | LNC 470 of 2020 |
| Judgment of: | Judge McGuire |
| Hearing date: | 2 March 2021 |
| Date of Last Submission: | 2 March 2021 |
| Delivered at: | Launceston |
| Delivered on: | 22 March 2021 |
REPRESENTATION
| Counsel for the Applicant: | Mr J Petersen |
| Solicitors for the Applicant: | Petersen Legal |
| Counsel for the Respondent: | Mr M Trezise |
| Solicitors for the Respondent: | McVeity Dean |
ORDERS
That within forty-two (42) days of the date of these Orders the wife pay to the husband the lump sum of $3,354.59.
That contemporaneously with the payment at Order No. 1 above the wife transfer her right, title and interest in the property at B Street, Town C in Tasmania to the husband absolutely.
That contemporaneously with the transfer referred to in Order No. 2 hereof, the husband provide the wife with a discharge of her liability under the mortgage registered and secured by the property situate at B Street, Town C in Tasmania.
That the husband forthwith transfer to the wife the Motor Vehicle 1 and all items of personalty, chattels, bank accounts and superannuation entitlements in the possession of or under the control of the wife as at the date of these Orders.
That the wife forthwith transfer to the husband all motor vehicles, motorcycles, personalty, chattels, bank accounts and superannuation entitlements currently in the possession of or under the control of the husband as at the date of these Orders.
That each party be solely responsible for and indemnify the other in respect of the following liabilities:
(a)Any and all liabilities attaching to any of the assets retained by that party pursuant to these Orders;
(b)Any and all liabilities incurred by that party since separation in either that party’s name alone or in joint names.
That pursuant to Section 81 of the Family Law Act 1975 the parties intend that these Orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.
IT IS NOTED that publication of this judgment under the pseudonym Argyle & Argyle is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BURNIE |
LNC 470 of 2020
| MS ARGYLE |
Applicant
And
| MR ARGYLE |
Respondent
REASONS FOR JUDGMENT
Applications
These are proceedings for property settlement. The wife is the applicant. Her case summary document asks for an order that she receive 55% of the net property pool inclusive of superannuation and on a one pool basis with the husband to receive 45%. By the time of final addresses her Counsel was asking for an order whereby there be a cash adjustment from the husband to the wife of $34,000 and in return she would transfer her interest in the former matrimonial home at B Street, Town C to the husband.
The respondent husband argued for orders whereby he retain the B Street, Suburb C property and assume its mortgage but with a cash adjustment to him from the wife of $17,500.
Background
The wife is 47 years of age and the husband is 45 years.
The parties commenced cohabitation in 2010. They married in 2012. Separation occurred on 16 August 2019. Consequently, cohabitation was for a period of approximately nine years.
The wife works as a tradesperson with an income of approximately $35,600 per annum. There is no evidence that she has re-partnered.
The husband receives a disability pension. He was formerly employed in his trade as a tradesperson. He does some casual work around the business and perhaps for his father. He discloses an income of $559 per week of which $459 is disability support pension and therefore an annual income of E$29,000 per annum.
There is no evidence that the husband has re-partnered.
There are no children of the relationship. Each have adult children from previous relationships. The wife's son, Mr E, lived with the parties for the duration of their relationship. Two of the husband's children spent sporadic time with the parties.
The husband suffered a cancer diagnosis in about 2009. He underwent surgery to remove the cancer. He had previously owned his own business franchise which was subsequently sold.
Soon after the parties commenced cohabiting they jointly applied for the wife to receive a Carers pension in respect of the husband's disability. That application was successful. The evidence suggests that the wife continued to work albeit not on a full-time basis.
The parties purchased the former matrimonial home at B Street, Town C in 2014 for a purchase price of $185,000.
The Evidence
Both parties provided affidavits and sworn financial statements. They both gave evidence and were cross-examined by Counsel for the other party. Each presented as relatively unsophisticated but honest in their evidence. It is clear that they remain on poor terms and that issues of family violence may have been prevalent during the relationship but in this matter no Kennon claim or damages claims are raised. Essentially, each gave evidence in the terms of their affidavits and retreated little, if at all, in cross-examination. Each was essentially a witness of the truth but with emphasis on the positive traits of their arguments.
The husband adduced evidence from his father, Mr F. He affirmed an affidavit of 18 February 2020. He was very briefly cross-examined. The tenor of his evidence was that he had advanced $7,000 to his son towards the purchase of the B Street, Suburb C property in 2014. He gave evidence in a colloquial form of the advancement being a 'loan' but confirmed there was no document to evidence the asserted loan or that he has sought repayment. Mr F was a good and honest witness supportive of his son but objective in his evidence.
The husband also adduced evidence from his general practitioner, Dr H. He affirmed an affidavit of 21 January 2021 and gave evidence by telephone. He was brief briefly cross-examined.
Dr H deposes that Mr Argyle has been his patient since 2012 and frequently attends at his surgery. He confirms the cancer diagnosis and the surgery and also suggests that the husband has suffered lower back pain due to osteoarthritis as well as depressive anxiety disorder.
Dr H is aware that the husband works approximately four hours a week in a business but was pessimistic in respect of the husband's ability to work to any greater productive degree.
The Issues
From the documents filed by the parties and the nature of the evidence in cross-examination, I identify the following issues:
1)The husband argues that the $7,000 advancement from his father is a 'loan' and therefore to be included as a liability of the marriage. The wife argues that the advancement was a gift but through her Counsel then acknowledges that it would, in any event, be seen as a form of contribution by or behalf of the husband;
2)The husband says that he withdrew $15,000 from his super fund under hardship provisions to put towards the purchase of the former matrimonial home. The wife does not concede this contribution.
3)The wife contends that that her son, Mr E, advanced the parties $5,000 towards the purchase of the former matrimonial home. The husband does not make this concession.
4)The husband received a TPI payment from the insurance element of his superannuation in approximately 2017. It seems to be agreed that the greater majority of these monies was put towards the home mortgage. There is an issue as to the weight to be accorded these monies as a contribution by the husband.
5)The husband alleges that the wife removed approximately $24,000 from a redraw facility attached to the parties’ mortgage account and without the consent of the husband and that these monies were not used for mutual benefit and therefore should be 'added back' to the pool as monies received by the wife. The applicant wife disputes that she has had the beneficial use of these monies.
6)The wife claims a form of contribution to the husband's TPI payment referred to above.
7)The wife argues that the husband has the capacity for greater remunerative and productive employment than in which he currently engages.
8)There is an issue between the parties as to whether weight should be given to the husband’s contribution towards the emotional and financial support of the wife’s son, Mr E, who was habitually a member of their family unit.
9)The parties agree that the wife withdrew $10,000 from her superannuation entitlement during the ‘Covid release provisions’. The husband says that the withdrawal was not necessary or used on reasonable expenditure and should be added back to the pool.
Relevant Law
Matters of property alteration and settlement are dealt with by Part VIII of the Family Law Act 1975 ('the Act'). In my view, the course of consideration by trial judges is again reasonably well settled following the well-known decision of the High Court in Stanford v Stanford[1]. Importantly, notions of justice and equity permeate the entire process which is now a more fluid one than previously suggested by superior Courts which involved a more structured and staged process of consideration.
[1] (2012) 247 CLR 108
It is important for the Court firstly to establish the legal and equitable interests of the parties in property. 'Property' consists of assets, liabilities and financial resources. Superannuation is to be 'treated as property' for the purposes of this exercise although, of course, not strictly property in the form of an asset in that it usually cannot be crystallised.
S.79(2) obliges the Court to consider at an early stage whether or not it is just and equitable to make any orders altering the property interests of the parties given the particular circumstances of the parties. In the matter now before me, I am little troubled by this consideration. The parties are the joint registered proprietors of property at B Street, Suburb C. They separated as long ago as 2019. The husband remains in occupation and possession of the major asset being the home. There are significant issues of contributions to be considered and, in my view, it is proper to do so without falling into the error of simply conflating the consideration of contributions at s.79(4) with the obligation at s.79 (2).
The Court then considers the contributions by and on behalf of each of the parties to the attaining of, improvement of, and maintenance of the elements of the property pool. Contributions may be of a direct financial or indirect financial type or may be of a non-financial type including as homemaker or parent.
After considering any alteration of the property pool by reason of contributions, the Court then considers whether there should be any further adjustment to either of the parties on a consideration of the matters set out in s.79(4)(d) – (g) including any relevant factors under s.75(2) of the Act. Finally, but throughout the process, the Court should then consider whether the actual orders it proposes making after the above considerations in themselves give justice and equity outside of the simple percentage division.
The Property Pool
Subject to some of the issues listed above, there is general agreement by the parties as to the contents of the property pool and valuations thereof.
The husband argues that the parties are indebted in the sum of $7,000 to his father by reason of a loan made in 2014. There is no evidence of the advancement being documented as a loan. There is no evidence as to a repayment schedule. There is no evidence as to any interest component. There is no evidence that the husband's father has demanded repayment or indeed intends to do so. The evidence of Mr F himself was not consistent with the legal notion of a 'loan'. I prefer that the advancement of $7,000 was made as a form of gift, but perhaps to be repaid at some time in the indeterminate future and on conditions that are also without particulars. There will be no liability added back.
The husband in turn asserts that the wife unilaterally removed some $24,000 from their mortgage redraw facility and that she did so unilaterally for her own benefit. He asks that these monies be added back to the pool.
The Full Court in AJO & GRO[2] made it clear that there are three clear categories where a Court may exercise its discretion to 'add- back' to a property pool. This might occur where a party has expended money on legal fees taken from the capital of the property pool. Secondly, where there has been a premature distribution of matrimonial assets such may properly be added back to the pool. Thirdly, where it is alleged that one or other of the parties has 'wasted' an asset or part thereof by wanton, negligent, or reckless dissipation of the property pool. It is this final element in which the husband asks the Court to exercise its discretion.
[2] (2005) FLC 93-218
Firstly, the same Full Court made it clear that the exercise is discretionary and that an add-back does not automatically or necessarily occur whenever a party 'has expended money realised from the disposition of assets'. Another and earlier Full Court made a similar point in emphasising that an add-back is 'the exception rather than the rule.'[3] In the matter now before me it is agreed that the parties had a mortgage redraw facility and that in the earlier days it seems that either party, independent of the other, could make withdrawals. The parties agreed that it was the wife who had the major responsibility for the payment of household accounts and hence the management of the bank accounts. The wife does not deny that withdrawals were made. At [33] of her affidavit sworn the 8 February 2021 the wife details expenditure relevant to the withdrawals.
[3] C & C [1998] FamCA 143
The husband's evidence is generalised although I accept that it would be difficult if not impossible for him to particularise the expenditure of those monies in circumstances where the wife unilaterally made the withdrawals. However, the wife's evidence is highly particularised and plausible in respect of the expenditure. She did not retreat under cross-examination. It is agreed that she was the party who had the primary financial responsibility within the relationship. As such, I am generally satisfied that the monies withdrawn from the account were utilised for the joint benefit of the parties as set out in [33] of the wife's affidavit and I will not 'add-back' those monies to the pool[4].
[4] Townsend & Townsend (1995) FLC 92-569
The wife withdrew $10,000 from her superannuation entitlement in 2020 and as available due to special Covid-19 withdrawal provisions. Unlike her evidence in respect of the drawdown of $24,000, the wife was unable to particularise the expenditure of these monies. In cross-examination, she conceded that her employment was little impacted by Covid. At [39] of her affidavit she says simply 'I utilised the COVID superannuation process to cash $10,000 to help pay off my bills and life expenses. These funds have been spent.' In all the circumstances, I am not satisfied that that these monies were expended on a 'reasonable' basis and should therefore be added back to the property pool.
There was one further issue between the parties in respect of the valuation of a backhoe and buckets. I stress that no proper valuation was provided to me. I have only the estimates of the parties who disclose no qualification. The husband says that the buckets were purchased with the backhoe as a one-lot for $5,000 a few years ago. The wife attempts to give a valuation of the buckets alone at $2,000. She is not qualified to do so. I accept the husband's evidence generally that the backhoe and buckets together have worth of $3,300.
Consequently, and with the above findings and the general agreement of the parties I am able to identify the property pool as follows:
ASSETS
B Street, Suburb C
$ 200,000
Motor Vehicle 2 (under repair)
$ 500
Motor Vehicle 3
$ 5,850
Utes (parts)
$ 500
Motorbike (4WD)
$ 2,500
Tandem Trailer
$ 2,000
Motor Vehicle 1 (wife)
$ 3,000
Wood splitter, chainsaws, slasher, whipper snipper
$ 1,000
Farm equipment – livestock
$ 2,000
Tractor
$ 1,500
Backhoe and buckets
$ 3,300
Wife’s bank account
$ 300
Husband’s bank account
$ 1,200
Wife’s superannuation drawdown (add-back)
$ 10,000
Total Assets
$ 233,650
LIABILITIES
Commonwealth Bank mortgage
$ 126,003
Total Liabilities
$ 126,003
TOTAL NET ASSETS
$ 107,647
SUPERANNUATION
Husband – Super Fund G
$ 15
Wife
$ 29,967
TOTAL NET PROPERTY POOL
$ 137,629
Neither party asks for orders for a superannuation split. Although, of course, I am not bound by the orders sought by the parties but only by justice and equity in the particular circumstances of the parties.
Contributions
The wife says that she came into this relationship with a motor vehicle and her personal possessions together with some superannuation, although 'not a great deal'.
The wife is silent as to any particulars of the husband's financial position as at the date of commencement of the relationship.
I am satisfied that the husband brought into this relationship a superannuation entitlement and $15,000 of that was utilised to pay the deposit on the home purchase.
I am also satisfied that the husband received an advancement from his parents of $7,000 in cash which went towards that purchase.
Conversely, the wife argues that her son Mr E put in $5,000 – $6,000 towards the purchase of the B Street, Suburb C property. She said he did so from the proceeds of sale of cattle which he conducted as a hobby. The husband denies the assertion. Mr E was 15 years of age at the relevant time. More significantly, Mr E sat through these proceedings as an observer. He did not provide an affidavit and was not called to give rebuttal evidence after hearing the husband's denials. The principles in Jones v Dunkel[5] permit me to draw an inference that Mr E's honest evidence would not have assisted the wife's case in this respect. No explanation was given for the failure of Mr E to give evidence as he was obviously available to do so. In these circumstances and without further corroborative evidence of the wife's assertion, I cannot accept her evidence that her son provided $5,000 – $6,000 towards the purchase.
[5] [1959] HCA 8
The husband received approximately $101,000 from the insurance element to his superannuation entitlement. He received these monies in approximately 2017. They were put towards the mortgage. The wife claims some contribution to this injection of funds. I must emphasise that the payment received was not in the form of a damages or workers compensation payment but rather a simple insurance policy attached to the husband's superannuation entitlement. Counsel for the husband referred me to a decision of Strickland J in Millerv Miller[6]. This is not a matter where a Griffith v Kerkemeyer[7] contribution would thereby be relevant although, of course, the wife's contributions generally to the homemaker and support of the husband would be relevant. In this respect his Honour Strickland J in Miller says at [101]:
…This payment was not a windfall. It was a payment received by the husband because he suffered a heart attack. It matters not that it was a minor heart attack from which he recovered. Despite the husband's good fortune in this regard, his health into the future is 'significantly compromised' as a result according to the evidence of his cardiologist. Thus, although the fact that it was a joint decision to take out the insurance and the fact that the premiums were maintained out of the parties’ joint funds can be treated as contributions by each of the parties, there still needed to be a life – threatening event before a payment to be made. It is simply not open to the wife to argue that the parties have contributed equally to the payout.
[6] [2009] FamCAFC 121 @ [121]
[7] [1977] HCA 45
In the matter now before me, there were no premiums in the sense of the insurance policy and such policy was obtained together with his superannuation entitlement before the start of the relationship. I must, therefore, consistent with the above-mentioned authority, consider this a contribution by the husband.
The wife worked for the duration of the relationship. She was employed as a tradesperson and I expect with an income consistent with her current earnings. She also received a carer's benefit for the husband from Centrelink. He received his own Centrelink benefit which now sits at approximately $459 per week. That seems to be tax-free income. The husband suffered his unfortunate condition by the time of commencement of cohabitation. His capacity then was known to the wife. Nevertheless, I accept that the wife did contribute to the care and support of the husband but there is no evidence before me that this impacted negatively on her ability to work longer hours or earn a greater income. Whilst the wife worked, both parties contributed their income from their various sources to the family unit. I accept the medical evidence as to the husband's ailments and the impact on his enjoyment of life and lack of employment prospects. Consequently, it follows that I also accept that the wife most probably took on a more onerous responsibility for many of the household tasks in and outside of the home.
This was a relationship of nine years duration. The parties did not live an extravagant lifestyle. They had limited incomes but managed to purchase themselves a home which now has an equity of some $84,000 as their major asset. The husband suffered disabilities and the wife's employment prospects were limited in their income potential. Both contributed in the non-financial ways. The most striking financial injections come from the husband's payment of $15,000 from his superannuation drawdown which I can assume represented a part of his entitlement at the date of commencement of cohabitation together with the $7,000 ‘gift’ from his father and, even more significantly, the $101,000 from his TPI insurance payout. On a pure mathematical basis these contributions sit dominantly in respect of the current net assets of the parties. However, the Court is not to consider this matter on a precise mathematical basis but in a more holistic approach without diminishing in any way the plethora of other contributions made by each of these parties to their nine year relationship. That is, it would be to fall into error to simply 'quarantine' those individual contributions, although the Court must consider and give weight to those contributions together with all others. It has been for the benefit of the parties that the three financial injections referred to above are now traceable in sitting in the equity in the former matrimonial home.
I consider and give weight to all of the contributions set out above be they financial or non-financial contributions of each of the parties. I take into account the duration of the relationship and the circumstances of the parties themselves. Within that holistic approach, I am of the view that there should be a loading to the husband on account of contributions where the cash injections are significant in the context of the value of the property pool and their timing and where they are obvious in respect of the equity in the former matrimonial home. I am of the view that on contributions the husband should receive a 20% loading such giving credit to those contributions but not in isolation or neglecting the myriad of other contributions.
Section 75(2) Factors
In circumstances where the value of the pool is not great, neither of these parties will leave this marriage and these proceedings with any great wealth. The husband's income earning capacity is limited by his health and I do not accept the submissions of Counsel for the wife, implied as they might be by his cross-examination, that the husband has any employment prospects over and above his certified disabilities.
The wife's prospects are barely more optimistic. She is clearly a hard worker but one without qualifications and her income will realistically remain stable. I accept, however, the submissions from the husband's Counsel that the wife will be able to continue to superannuate herself and potentially for the next twenty or so years in the workforce. This benefit will not be available to the husband.
The husband also argues a 'contribution' to be considered under s.75(2)(o) of the Act in respect of his support within the family unit during the relationship for the wife's son Mr E who was habitually resident with the parties. On reflection and consideration, I am not satisfied that there should be any adjustment to the husband in the circumstances of these parties and in accordance with the authority of Robb v Robb[8]. The husband was in receipt of a disability pension during the relationship. The wife provided actual support and received a Carers pension on top of her wages. I do not expect that the husband’s Centrelink disability pension contained any element for support of any child but would have been struck at a single persons rate.
[8] (1995) FLC 92-555
Consequently, there should be some adjustment to the husband by reason of the wife's ability to superannuate herself into the future. Realistically, however, given her earning capacity, such superannuation will be unlikely to accrue to any great extent. There will be an adjustment of 1% of the property pool to the husband. In conclusion consequently, after consideration of contributions and the s.75(2) factors, I am satisfied that justice and equity would be accorded these parties by the husband receiving 71% of the total pool inclusive of superannuation and the wife to receive 29%. Therefore the husband will retain property at a value of $97,716.59. The wife will receive property at value of $39,912.41. From the asset pool herein the wife retains the Motor Vehicle 1 ($3,000), her bank account ($300) and her superannuation drawdown of ($10,000) being a total of $13,300 plus her superannuation of $29,967 being an overall total of $43,267. Consequently, she will make a cash adjustment on the husband of $3,354.59.
I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of Judge McGuire
Associate:
Date: 22 March 2021
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