Arthur and Arthur

FAMILY COURT OF AUSTRALIA

ARTHUR & ARTHUR

[2016] FamCA 324

FAMILY LAW – PROPERTY – Settlement in relation to marriage – Where the parties cohabited for approximately 23 years – Where principal asset of the parties is the former matrimonial home –Where the parties agreed to equal division of total superannuation – Where the Court found that the husband was solely entitled to possession of the household goods in the former matrimonial home – Where the Court found s 75(2) factors in favour of the husband of 10 percent – Where the Court found that the husband was entitled to 80 percent and the wife entitled to 20 percent of the matrimonial property pool

Family Law Act 1975 (Cth) ss 75(2), 79(2), 90MT(1)(a)

Conveyancing Act 1919 (NSW) s 66
Family Law (Superannuation) Regulations 2001 (Cth)
Superannuation Industry (Supervision) Regulations 1994 (Cth) r 7A.06(1)

APPLICANT:

Ms Arthur

RESPONDENT:

Mr Arthur

FILE NUMBER:

SYC

6957

2012

DATE DELIVERED:

10 May 2016

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Rees J

HEARING DATE:

18 and 19 April 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Maurice

SOLICITOR FOR THE APPLICANT:

Lees and Givney

COUNSEL FOR THE RESPONDENT:

Mr Kerr

SOLICITOR FOR THE RESPONDENT:

Dive and Kerr Lawyers

Orders

IT IS ORDERED
(1)That within three months of the date of these orders, the husband pay to the wife by way of property settlement the sum of $163,375.
(2)That in the event the husband has not paid the sum in Order 1 to the wife by the due date, then the husband shall do all acts and things required to effect the sale of the property at B Street, Suburb C (including, if necessary, bringing an application pursuant to s66G of the Conveyancing Act 1919 (NSW)) and to pay to the wife, from his share of the proceeds of sale, the sum of $163,375 together with interest at the rate prescribed by the Family Law Rules, from the due date until the date of payment.
(3)That pursuant to paragraph 90MT(1)(a) of the Family Law Act 1975 (Cth) (“the Act”) whenever the Trustee of Cbus (“the husband’s superannuation fund”) makes a splittable payment out of the husband’s interest in the husband’s superannuation fund (membership number 3408588) the Trustee shall:
(i)Pay the specified base amount being $106,000 to the wife or her administrators, executors, beneficiaries, heirs or assigns, and;
(ii)Make a corresponding reduction in the entitlement the husband would have had in the husband’s superannuation fund but for these orders.

(4)That the Trustee of the husband’s superannuation fund shall do all such acts and things and sign all such documents as may be necessary so that, in accordance with the obligations set out in the Act and Family Law (Superannuation) Regulations 2001 (Cth), the Trustee can calculate the entitlement of, and make payment to, the wife in accordance with these orders.
(5)That the wife do all acts and things necessary, including but not limited to, making a request pursuant to rule 7A.06(1) of the Superannuation Industry (Supervision) Regulations 1994 (Cth), so that the Trustee of the husband’s superannuation fund can roll over or transfer the transferable benefits out of the husband’s superannuation fund to the wife’s AMP superannuation fund (Plan No. …) under the AMP Superannuation Savings Trust or such other fund as the wife may nominate.
(6)That these orders have effect from the operative time which is four business days after service of a sealed copy of these orders on the Trustee of the husband’s superannuation fund.
(7)That the husband be solely entitled to possession of the household goods located at Suburb C.
(8)That other than as specified in these orders, each party shall be solely entitled to any property in his or her possession.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Arthur & Arthur has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 6957 of 2012

Ms Arthur

Applicant

And

Mr Arthur

Respondent

REASONS FOR JUDGMENT

Ms Arthur (“the wife”) and Mr Arthur (“the husband”) married and commenced co-habitation in 1988. There are three children of their marriage Mr D born … 1990, Mr E born … 1991 and Mr F born … 1997. At the present time Mr F lives with the wife and Mr D lives with the husband. All the children are adults.
At the commencement of co-habitation the wife had savings of $20,000 and the husband had savings of $19,000. They combined those amounts into a term deposit. Neither of them had significant other assets.
The husband’s parents owned a property at B Street Suburb C (“Suburb C”), which they had purchased in 1981. The husband and the wife moved into the property and commenced paying money to the husband’s parents.
It is common ground that from the beginning of the marriage and indeed almost until their separation there was a disagreement between the husband and the wife about living at Suburb C. The wife wanted the parties to rent or purchase their own property and not maintain the financial association with the husband’s parents which was inherent in their living at Suburb C. From time to time the parties made attempts to find a property elsewhere, but they were unable to afford either to rent or to purchase.
It was agreed in the course of the proceedings that the husband and the wife, from the time of marriage until 2009, paid to the husband’s parents, on average, $100 per week referable to their occupation of Suburb C. Sometimes the amount was more than $100. For periods when the husband was unemployed they did not pay anything. At other times the husband’s father would tell the husband that he did not need to pay.
Throughout the marriage the husband was employed although he had a period of unemployment for about a year. The wife returned to work when the children were of sufficient age.
Work was done on the Suburb C property from time to time to improve its amenities.
In 1991, the husband’s parents discharged the mortgage over Suburb C. The husband took his mother to the bank and the sum of $6,000 was paid.
In 1993, the husband’s parents transferred one quarter share in the Suburb C property to the husband and one quarter share in the Suburb C property to their daughter Ms G. The consideration stated on the transfer is $112,500. It is not disputed that in 1998 Ms G paid the sum of $60,147.96 to her parents. No lump sum of $56,250 was paid by the husband and the wife to the husband’s parents. Simultaneously with the transfer, the husband and his sister entered into a mortgage over the Suburb C property to secure the sum of $112,500 to be repayable to their parents upon demand. Again, simultaneously, the husband’s parents lodged a caveat over the title of the Suburb C property by virtue of the unregistered mortgage which had been entered into.
Again, simultaneously, the husband and the wife entered into a lease of the Suburb C property for six months at a rental payment of $300 per week. They did not pay $300 per week. On the same day, the wife, at the request of the husband’s parents, executed a document entitled “Acknowledgment” which was addressed to the husband’s parents, the husband and Ms G in the following terms:
I … wife of … acknowledge that I am not a party to your family arrangements relating to transfer to my husband and his sister of a half share in the property at [B Street, Suburb C] and that any interests or benefits arising from such transfer belong to my husband and his sister and that no interest or benefit is intended to be transferred or made over in my favour.
That document was signed by the wife but not witnessed. The documents were prepared by the solicitors acting for the husband’s parents.
In 1998 the husband’s parents sold their home and purchased a block of land at Suburb H. The husband’s parents intended to build a home on the land but in order to do that they required a mortgage from the St George Bank. Both of the husband’s parents were retired at this time and the bank agreed to lend money for the purchase of the property but only if the husband became a registered proprietor of the Suburb H land. Accordingly, the husband became a registered proprietor of the land at Suburb H as to a five percent interest. It is common ground that the husband paid no money to his parents in consideration of the transfer of that interest to him and made no contribution to the acquisition of the property.
In 1999, the husband’s parents needed money to complete the building of their home and they asked the husband to make a contribution. The husband then gave his parents the sum of $40,000 which was held in the joint deposit of the husband and the wife being the money which each of them had contributed to the term deposit at the time of their marriage. There was no documentation in relation to the transaction.
In 2003, the wife received an inheritance from her late father of $140,000.
In November 2003, the husband’s parents transferred to the husband a further twenty four percent of the Suburb C property, bringing his share to 49 percent, for a stated consideration of $139,200. The husband’s parents did not receive that sum.
In November 2008, after the mortgage over the Suburb H property to the bank had been discharged, the husband’s five percent interest in the property was transferred back to his parents. No money was paid to the husband in consideration of that transfer.
In about 2006 and again in about 2009, the husband’s parents gave the husband, on each occasion, $10,000 to assist with the engagement of legal representatives for each of Mr D and Mr E who required representation in criminal proceedings.
In July 2008, the wife lodged a caveat over the Suburb C property.
In 2009 the husband and the wife stopped making payments to the husband’s parents consequent upon their occupation of the Suburb C property.
The parties separated on 3 September 2011. The wife left the Suburb C property and lived in a house which was owned by her mother.
On 28 April 2015, the wife’s mother died, leaving her estate in equal shares to the wife and her brother. From that time the wife agreed with her brother to pay $125 per week rent for the occupation of the house which then belonged to the estate and she currently has a debt to her brother of approximately $7,000 in respect of that rent. The wife expects to receive, upon the sale of the house and the finalisation of her mother’s estate, approximately $535,000.

Joinder of the husband’s parents

By an Amended Initiating Application filed 19 February 2014, the wife sought the following declarations:
(1)The Court declares that [the husband’s parents] hold 25% of the property known and situated at [B Street, Suburb C] … in trust for the husband.
(2)That the husband is declared to be the beneficial owner of 74% of the [Suburb C] property.
(4)The Court declares that 74% of the [Suburb C] property is available and divisible as between the parties pursuant to Section 79 and 75(2) of the Family Law Act.
The proceedings as between the parties and the husband’s parents were settled by terms of Settlement and Consent Orders made on 6 April 2016 whereby the wife abandoned any claim to the interest of the husband’s parents in Suburb C. In addition, the wife was released from any claim by the husband’s parents in relation to rent or any other money alleged to be owed to them in relation to the interest of the husband in Suburb C.

The hearing

At the commencement of the hearing, the respective cases were outlined. The wife sought orders which would give her 60 percent of the assets comprised in the pool which is defined later in these reasons as the “Suburb C pool”. It was her position that she should receive 50 percent of the Suburb C pool by way of contribution and a further 10 percent of the Suburb C pool by way of adjustment pursuant to s 75(2) of the Family Law Act 1975 (Cth) (“the Act”). The wife would then retain her inheritance of $535,000.
The husband sought orders which would assess his contribution to the Suburb C pool at 80 percent. On behalf of the husband, it was submitted that there should be no adjustment in favour of the wife pursuant to s 75(2) of the Act. In closing submissions, it was submitted that there should be an adjustment in favour of the husband pursuant to s 75(2) of the Act.
At the commencement of the hearing, the legal representatives agreed that the issues of fact which required determination were the following:
(1)How should the Court categorise the money which was paid by the husband and wife to the husband’s parents for the occupation of the [Suburb C] property? The essence of this issue is the assertion by the wife that the parties paid for the husband’s share of [Suburb C] by weekly instalments.
(2)How should the Court categorise the sum of $40,000 which was paid from the parties’ savings to the husband’s parents?
(3)What is the legal effect of the lease entered into on 22 October 1993?
(4)What is the legal effect of the acknowledgment entered into by the wife on 22 October 1993?
(5)Has the husband made proper disclosure?
(6)Have the husband’s parents made proper disclosure?
(7)What is the husband’s current financial situation?
(8)Were the wife’s contributions made more difficult by the fact of the behavioural difficulties of each of their children such that she should receive a greater acknowledgment for her contributions?

Did the parties pay for the husband’s interest in Suburb C?

The wife’s case, as explained by her Counsel in submissions, is that a 49 percent interest in Suburb C was transferred to the husband in two transactions; that over a period of 23 years the husband and the wife paid regular sums to the husband’s parents by way of instalments which should be treated as payments towards the cost of the husband’s share and that by 2009 the husband’s parents were satisfied that payment had been made in full and that they therefore did not require any further payment.
The assertion that the payments over the period from the marriage until separation should be regarded as instalment payments towards the acquisition of Suburb C does not sit comfortably with the assertion that the husband first acquired an interest in Suburb C in 1993.
The wife’s case appears to have been put in the alternate:
· Either the husband, from the date of the marriage was purchasing the [Suburb C] property from his parents by instalments and therefore all money paid to the husband’s parents should be regarded as an instalment payment; or
· From October 1993 the money paid to the husband’s parents should be regarded as payment by instalments, firstly of the purchase price of the 25% share in [Suburb C] and then of the purchase price of the 24% share in [Suburb C].
The wife’s case, that payments made to the husband’s parents before 1993 should be characterised as payments by instalments to purchase the husband’s interest in Suburb C, appeared to be based on estoppel by representation but without any evidence of any relevant representation, the relevant representation being that the husband’s parents had agreed to sell Suburb C to the husband. The relevant representations could only have come from the husband’s parents. Representations made by the husband, to the wife or to third parties, cannot bind the registered proprietors of the property.
The wife in her evidence referred to various statements made by the husband before 1993 to the effect that he would own Suburb C one day. She deposed that he told her that the house would be his one day and that his parents bought the house for him. Those conversations took place at a time when the husband’s parents were the registered proprietors of Suburb C. Significantly, the wife does not suggest that the husband’s parents ever told her that the husband was purchasing Suburb C.
The wife deposed that the husband referred to the money which was paid periodically to the husband’s parents as “house payments” or house money” except for one occasion when she deposed to the husband handing money to his mother and referring to “rent”. The husband’s mother denied that this conversation occurred. The wife said that she did not know what the term “house money” meant.
Two of the wife’s friends, Ms I and Ms J, gave evidence of conversations with the husband where he told them that he was “paying off” Suburb C to his parents.
Ms I deposed to those conversations occurring up to 2003, culminating in a conversation in 2003 when the husband told Ms I that he had finished paying off the house and was going to see his parents to sign “the paperwork”.
Ms J deposed to conversations in the 1990’s when the husband told her that they were paying off the house and “I’m buying out my parents”.
The husband denied that those conversations, with Ms I and Ms J, took place.
Whatever representations the husband may have made to the wife, Ms I and Ms J, those representations do not bind his parents who were the owners of Suburb C. The fact that the husband told the wife and third parties that he was buying Suburb C, if their evidence is accepted, does not make it so. It establishes only that the husband told them so. The husband may have misled the wife and her friends but that does not establish that he owned or was purchasing Suburb C.
The husband’s parents gave evidence and were cross-examined. They denied that the husband had any interest in Suburb C other than that which they transferred to him in 1993.
There is no evidence of any agreement on the part of the husband’s parents to sell Suburb C to the husband prior to or at the time of the marriage. The husband’s parents both denied the existence of such an agreement. The evidence of what was done in 1993, being the transfer of 25 per cent of Suburb C to the husband and the insistence on the part of the husband’s parents that the parties sign a lease does not support the wife’s assertion that they had already agreed to sell Suburb C to the husband.
There is no evidence to support the wife’s contention that, from the date of marriage until October 1993, the husband had any interest, legal or equitable, in Suburb C. Thus it is not open to the wife to contend that the payments made before October 1993 were payments towards the acquisition of the husband’s interest in Suburb C.
The onus falls upon the wife to prove her assertions. The wife has not proved, on the balance of probabilities, that there was an agreement, prior to or at the time of the marriage, between the husband and his parents, that he could purchase Suburb C.
If the second leg of the wife’s case be accepted, there could be no argument that the payments made to the husband’s parents between marriage and October 1993 were other than rent.
There was a mortgage over Suburb C, taken out by the husband’s parents at the time of its purchase. There is no evidence that the mortgage payments were made by any persons other than the husband’s parents. In July 1991 the mortgage was discharged. Although the wife asserted that the sum of $6,000 used to discharge the mortgage came from the husband’s savings, I do not accept that assertion. The husband denied that he had ever made that representation to the wife. The assertion was not put to the husband’s mother or the husband’s father who deposed that the money came from their own funds. There is no evidence that the husband had any savings other than the joint term deposit of $40,000. There is no evidence to explain how the husband could have saved $6,000 between the time of the marriage in 1988 and 1991. The husband was made redundant in 1991. The wife was pregnant with Alex. The husband’s father’s unchallenged evidence was that in 1991 the husband and the wife could not afford to pay rent and that on occasions, the husband’s parents provided money to the husband and the wife. On the evidence of the wife, this was a time when the husband and the wife could not afford to rent elsewhere. She does not depose to savings.

On 22 October 1993, there were a number of transactions. The husband’s parents transferred a quarter share in Suburb C to each of the husband and his sister Ms G for consideration expressed to be $112,500. The husband and Ms G executed a mortgage to secure the payment of $112,500 repayable at call. The husband’s parents lodged a caveat on Suburb C to secure the unregistered mortgage.
Also on 22 October 1993, two further documents were executed. The husband and the wife executed a lease as tenants for six months at a rent of $300. The lessors were the husband’s parents, the husband and his sister. At the same time the wife executed the acknowledgement referred to in Paragraph 10 above.
In cross-examination, the wife said she understood that she was signing a lease. She read the document before she signed it. She understood that the document imposed an obligation to pay rent of $300 per week. She characterised the money which was paid to the husband’s parents after October 1993 as “house money”. When she was asked what that meant she replied that she did not know what the term meant but that was the term the husband used.
Both of the husband’s parents were cross-examined about the lease. They both gave evidence that they wanted to ensure that the husband and the wife understood that they were renting a house which belonged to the parents. The husband’s father said that the rent was calculated to be half of the market rent.
The husband and the wife did not ever pay $300 per week. It is an agreed fact that they paid an average of $100 per week.
The husband did not pay his parents the stated transfer price for his interest in Suburb C of $56,250 at the time of the transfer. The husband’s father deposed that this amount is still owed. There was no written agreement for the sum to be paid by instalments.
The most likely explanation for the transaction is that given by the husband’s father in his affidavit – that the husband’s parents, wishing to help their son, gave him the interest in Suburb C. The husband’s father deposed that in a conversation in 1993 the husband told his parents that the wife had told him he was worthless. The wife in cross-examination admitted that she made statements to that effect. The husband’s father deposed to a conversation with the husband where he told the husband that he and his wife would transfer a quarter share in Suburb C “to help you get a start in the property market, but you have to pay for your share at some stage”.
After October 1993 there was no appreciable change in the method or amount of the payments made by the parties to the husband’s parents. Nothing in the evidence explains the wife’s assertion that the payments thereafter were characterised as instalment payments for the purchase of the quarter share. She deposes to no conversation with the husband or his parents about a change in the nature of the payments. The most likely characterisation is that the parties continued to pay rent, as and when they could.
The husband’s father deposed that in late 2003 there was a conversation where the husband told his parents that the wife denigrated him because he could not buy his own property. The wife conceded in cross-examination that she used terms such as those described. The husband’s parents told the husband that they would transfer a further share in Suburb C. The husband’s father gave evidence that the husband was given a further 24 percent so that he would only own 49 percent. Suburb C was valued and the consideration on the transfer, dated 11 November 2003, was expressed to be $139,200. The husband’s parents paid the legal costs and the stamp duty on the transfer. The husband’s father deposed “…we hoped we would receive payment at some time in the future, when our son and his wife were in a better financial position”.
Again there is no evidence to explain the wife’s assertion that from 11 November 2003 the payments which continued to be made from time to time to the husband’s parents should be characterised as other than rent.
In May 1998 the husband’s parents asked for financial help to complete their house at Suburb H and the husband gave them the sum of $40,000 which the husband and the wife had kept in their term deposit since their marriage. There was no conversation about the terms of the advance. In some handwritten documents, the husband’s father refers to a loan. Both the husband and his father deny that repayment was contemplated. The husband’s mother said she regarded the $40,000 as a repayment of some of the money they had given the husband and the wife from time to time.
The wife relies on the fact that there were renovations done to Suburb C from time to time during the marriage. She asserts that the fact that they did work on the property corroborates the claim that they were owners. I do not accept that assertion. Work was done to make the property more comfortable. The husband’s father deposed that he told the husband that, since he was not paying regular rent, he could do some work on the property. The husband’s cousin who is a builder did work and provided some material. Some of the work was done using money from the proceeds of an insurance claim consequent on water damage to the property. The husband’s parents were the insured owners and they directed the proceeds of the claim to renovations. Some of the materials came from building sites where the husband worked. Some of the material and some of the labour were paid for by the husband and the wife. The evidence did not establish how much in each case.
Some of the work was done before October 1993. I infer from the wife’s affidavit that most of the work was done after 1993 when the husband was the owner of one quarter share.
I do not accept that the fact that the parties did work on the house, in circumstances where they were not paying market rent, establishes that the husband was an owner before October 1993 (if that is the wife’s assertion).
I find that the 49 percent share of Suburb C now held by the husband was a gift from his parents and that the amounts of money paid periodically by the husband and the wife to his parents were payments of rent.
The wife conceded in cross-examination that the sum of $100 was well below the market rent for Suburb C. She gave evidence of looking for other property to rent and inspecting properties where the rent was $300 or $400 per week. The wife’s witness, Ms I was shocked that the parties were only paying $100 per week as she was paying $325 per week for a worse house in the same area.
The rent paid by the parties to the husband’s parents was about one third of that which they could expect to pay elsewhere.

The payment of $40,000 to the husband’s parents

I do not accept, for the reasons set out above, that this payment was specifically directed by the parties towards the repayment of the transfer price of a share in Suburb C.
The husband’s parents expected that, if they needed assistance, their son would give it. The husband expected that if he needed assistance, his parents would give it. Neither expected to be repaid.
The wife did not appear to have been included in that arrangement between the husband and his parents although she at least acquiesced to his giving them the $40,000.
When each of Mr D and Mr E had difficulties with the law in 2006 and 2009, the husband’s parents gave him $10,000 on each occasion.
The sum of $40,000 should be offset against the benefits received by the parties from the husband’s parents.

The lease executed 22 October 1993

The lease forms part of the factual matrix of the case. I accept the evidence of the husband’s parents that they wanted the lease executed to remind the husband and the wife that Suburb C was not their property. It is significant that the parties had been living at Suburb C for over five years by the time the lease was executed and that they remained there for a further 18 years. This was not a decision made by the husband’s parents at the end of the marriage when it became obvious to them that there might be some claim on Suburb C by the wife. The husband’s mother deposed “The purpose of having the lease agreement also signed, was so that it was very clear that we were not giving away our property”.
The significance of the lease is its clear and contemporaneous statement of the intention of the husband’s parents.

The acknowledgement executed 22 October 1993

The significance of the acknowledgement is the same as the significance of the lease.
It has no legal effect and neither the husband nor his parents asserted that it did. It is, however, a clear and unequivocal statement of the understanding of the husband’s parents of the ownership of Suburb C.

Disclosure

It appeared to be the wife’s case that the husband had not made proper disclosure in accordance with the rules.
The husband in evidence in chief gave evidence that he had changed employment and was earning a greater income than that disclosed in his Financial Statement.
The wife tendered letters written in June, July and August 2014 requesting documents from the husband.
On 22 August 2014 a letter was written by the husband’s solicitors responding to the request. In relation to the majority of the documents requested, the husband’s response was that he did not have the documents. That letter was not received by the wife’s solicitor.
On the first day of the trial, 23 October 2015, orders were made to the effect that, within 14 days, the husband provides specified documents.
On 6 April 2016 a Notice to Produce was forwarded to the solicitors for the husband and on the first day of the trial a folder of documents was produced by the husband.
The husband was cross-examined about his failure to produce particular categories of documents specified in the Notice to Produce. With the exception of his pay advice notices, which he said he received electronically and had not printed, the husband said that he did not have documents in the nominated categories.
It was not asserted in the wife’s case, or put to the husband, that there was some asset or fund not disclosed. The height of the wife’s case was that the husband had not, in a timely way, told the wife’s solicitors that he did not have the documents they asked for. Alternately, the husband is criticised by Counsel for the wife for poor record keeping.
The consequences of non-disclosure are serious, involving as they do the permissible exercise of discretion in favour of the other party. I do not consider that the evidence upon which the wife relies establishes non-disclosure on the part of the husband such as to attract those consequences.
The wife also contends that the husband’s parents have not made full and frank disclosure. At the time of the trial, the husband’s parents were witnesses in the husband’s case, proceedings in which they were parties having been resolved.
On 3 June 2014 the wife’s solicitors forwarded a request for documents to the solicitors then acting for the husband’s parents. On 30 July 2014, the solicitors for the husband’s parents responded, dealing in their response with each of the categories of documents for which a request had been made.
The gravamen of the wife’s complaint appears to be, not that they did not produce the documents they had, but rather that they did not keep records of their financial transactions with their son. This they freely conceded in cross-examination.
Setting aside the fact that the husband’s parents were not parties at the time of trial and no orders were then sought against them, it is difficult to see how a finding that they had not made full and frank disclosure could sound in an exercise of discretion against the husband.

What is the husband’s current financial position?

The husband in his evidence in chief disclosed that he has recently changed jobs and now earns $140,000 per annum, some $11,500 per annum more than the income he earned in January 2016 when he swore his Financial Statement.
Counsel for the wife pointed to the husband’s failure to give evidence about the fact that, since he swore his Financial Statement he has ceased to pay Child Support and that his car loan has been paid out, thus increasing his disposable income.
The assets and liabilities of the parties were agreed. It was not suggested that the husband had assets in addition to, or in excess of, those agreed.

Parenting contributions

The wife asserted that her parenting contributions were more arduous than those of the husband because she was the parent who worked shorter hours and thus she spent more time at home.
The parties agreed that the three sons had behavioural difficulties which included substance abuse and trouble with the law. In the case of the younger son, he also had problems with school refusal and other complex mental health conditions.
Both of the parents gave evidence about distressing and challenging behaviour on the part of their sons which seemed to escalate as they developed. The father described being physically assaulted on numerous occasions. The mother described being assaulted and spat at.
From the evidence of both parents, it was clear that they were overwhelmed by the difficulties they experienced with their children.
It is not possible to make a finding that the mother’s experience was qualitatively worse than the father’s. She spent more time in the house with them when the father worked longer hours but the consequences of the family dynamic were experienced by both of them.

S 79(2)

Both of the parties ask the Court to make an order adjusting their interests in their property. The most significant asset they acquired during their relationship is the interest in Suburb C that is now enjoyed solely by the husband. In those circumstances justice and equity requires that there be a distribution of their assets between them.

The asset pool

There was no dispute about the assets and liabilities of the parties.
Both parties approached the division on the basis that the wife’s inheritance from her late mother, agreed to be $535,000, should be placed in a separate pool. Both parties agreed that the husband had made no contribution to the wife’s inheritance. The issue was whether any adjustment should be made pursuant to s 75(2) by virtue of the inheritance.
At the commencement of submissions, the parties tendered a joint balance sheet which, edited, is reproduced here:

1	H	49 per cent of Suburb C		833,000
2	H	Savings St George #1045		2,968
3	H	4WD		13,950
4	W	Savings St George #...		9,378
5	W	St George #...		777
6	W	Japanese Sedan		12,900
7	Joint	Furniture and Furnishings at Suburb C		2,250
8	W	Furniture and Furnishings		1,000
Total Assets				$876,223
Liabilities
9	W	St George Loan #4570		5,815
10	W	– rent arrears		7,000
Total Liabilities				$12,815
TOTAL NET NON SUPER PROPERTY				$863,408
Member		Name of Fund	Type of Interest	Wife/de facto partner’s value
11	H	Cbus	Accumulation	254,645
12	W	AMP	Accumulation	43,570
Total Superannuation				$298,215
TOTAL NET PROPERTY INCLUDING SUPERANNUATION				$1,161,623
Ownership		Description		Wife/de facto partner’s value
13	W	The Wife’s inheritance from Estate Ms K		E535,000
Total Financial Resources				E$535,000

The parties agreed that their superannuation entitlements should be equally divided.
Thus the parties agree that in the remaining pool of assets with a value of $876,223 (“the Suburb C pool”), the husband currently has possession of assets to the value of $852,168. The contents of Suburb C, although jointly owned, have been included as assets of the husband as no application or submissions were made which would suggest that he would not retain them. The wife has assets of $24,055 and liabilities of $12,815, leaving her with net assets of $11,870.
The wife has possession of the inheritance.
How then, should the assets be distributed?

Contribution

The parties each had savings at the commencement of the marriage, of approximately equal amounts.
During the marriage, the husband was the primary income earner and the wife was the primary parent and home maker.
After separation, the wife cared for Mr F who was aged 14 years at separation and has recently turned 18. His mental health difficulties made that contribution significant. He was hospitalised twice. He was treated in house at an adolescent psychiatric facility from July 2013 until April 2014 where he lived from Monday to Friday. The wife visited him every night. Until April 2014, Mr F continued to attend the facility as a day student, living at home with the wife. In April 2015, his condition deteriorated and he refused to go to school. He had a psychotic episode in September 2015. In October 2015 he was admitted to hospital for three weeks. He has currently been diagnosed as suffering from psychosis and attends a facility twice each week.
The husband has paid child support for Mr F but has not participated in his care.
The wife received an inheritance in June 2003 from her late father of $140,000. She did not contribute the whole of the inheritance to the marriage. At separation she retained $80,000 of which $26,000 was used to purchase a motor vehicle which is included in the balance sheet.
The parties did some work on Suburb C which improved its amenities. In addition the husband’s cousin did work and provided materials and the husband’s parents paid for other work from an insurance claim.
The most significant contributions were made by the husband’s parents. They allowed the parties to live at Suburb C for a rent which was approximately one third of market rent. They also allowed the parties the flexibility to live rent free when they could not afford to pay rent.
From 2009 until separation, the parties paid no rent.
The husband’s parents gave the husband 49 percent of Suburb C. Although they both gave evidence that they expected to be repaid the amounts stated on the relevant transfers (some $195,450), the whole of the history of the financial dealings between the husband and his parents suggests that they will never ask for repayment, as they have never asked the husband to pay rent since 2009.
From 1993, the husband’s sister, who owned 25 percent of Suburb C, allowed the parties the use and benefit of occupation of her share of the property with no payment to her.
The husband’s parents also gave the parties lump sums of money. They gave $10,000 in 2006 and again in 2009 for legal fees for the two older boys. They gave evidence of other small gifts from time to time, particularly when the husband was not working but it is impossible to quantify the amounts. Offset against the money given to the parties by the husband’s parents, is the sum of $40,000 given to them by the parties.
Overall, contributions to the Suburb C pool are assessed to be 30 percent to the wife and 70 percent to the husband.
Contributions to the inheritance are assessed to be 100 percent to the wife.

S 75(2) factors

The husband earns $140,000 per annum. He lives rent free at Suburb C.
The wife earns $60,000 per annum. She currently lives in the house owned by her mother’s estate and rent for that occupation has been taken into account in the balance sheet. She intends that the house will be sold once these proceedings are finalised and that she will use her share of the proceeds, and any funds she receives by way of property settlement, to buy a home for herself. She will then also have rent free accommodation.
The wife continues to care for Mr F although he is now an adult. Mr F receives $120 per week in benefits. The wife provides housing, pays for his medications which she estimates cost her $35 per week (although those costs are probably reduced now that Mr F is receiving a benefit) and pays for his day to day living expenses. She also pays for visits to the psychiatrist which cost her $25 per visit after medical benefits and to his other doctors which costs her $125 per visit after benefits. There is no evidence of the total costs of Mr F’s care to the wife but the financial cost is significant.

In addition, the wife has been required to take time off work to care for Mr F when his illness has been acute. In 2015 she took her long service leave at short notice to care for Mr F. She has to take time off when he has an appointment with his psychiatrist and has had to leave work when Mr F has had problems with his medication.
The wife’s employer does not provide part time work or job sharing.
The wife’s employment future is uncertain.
Evidence from Mr F’s treating psychiatrist suggest that he is unlikely to be able to care for himself in the next two years and that he may be chronically impaired.
Balanced against the factors referred to above, is the wife’s possession of $535,000 which is a significant amount when compared with the Suburb C pool of $876,000.
The inheritance requires a modest adjustment for s 75(2) factors in favour of the husband of 10 percent of the Suburb C pool.

Effect of the orders

The husband will receive 80 percent of the Suburb C pool of $876,223 or $700,978. He will also retain half of the superannuation entitlements of $149,108, a total of $850,086.
The wife will receive 20 percent of the Suburb C pool or $175,245, she will retain her inheritance of $535,000 and receive superannuation entitlements of $149,108, a total of $859,353. (The wife already has assets from the Suburb C pool of $11,870 and the husband will pay to her the balance of $163,375.)

I certify that the preceding one hundred and twenty-two (122) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 10 May 2016.

Associate:

Date: 10 May 2016

[2016] FamCA 324

10 May 2016

Key Legal Topics

Areas of Law

Family Law

Property Law

Legal Concepts

Remedies

Jurisdiction

Statutory Construction