Avery and Avery - [2011] FMCAfam 672

FEDERAL MAGISTRATES COURT OF AUSTRALIA

AVERY & AVERY

[2011] FMCAfam 672

FAMILY LAW – Property – long marriage – many years since cohabitation ceased – monies already received by the husband – preservation of former matrimonial home by the wife.

Family Law Act 1975, ss.44(3), 75(2)

Applicant:

MR AVERY

Respondent:

MS AVERY

File Number:

MLC 10223 of 2008

Judgment of:

Hartnett FM

Hearing dates:

12 & 13 April 2011

Date of Last Submission:

21 April 2011

Delivered at:

Melbourne

Delivered on:

8 July 2011

REPRESENTATION

Counsel for the Applicant:

Mr Howe

Solicitors for the Applicant:

Sabelberg Morcos Lawyers

Counsel for the Respondent:

Mr Moisidis

Solicitors for the Respondent:

N/A

ORDERS

The real property situate at and known as Property D in the State of Victoria, being the land more particularly described in Certificate of Title Volume [omitted] (‘the Property D property’) be sold by way of public auction, such auction to take place within 70 days hereof or be otherwise as agreed in writing between the parties. The following conditions are to apply:
(a)the estate agent to have the conduct of the sale will be as agreed between the parties and within 7 days of the date of these orders and failing such agreement, such agent shall be appointed by the President of the Real Estate Institute of Victoria or his or her delegate;
(b)
the reserve price shall be as agreed between the parties within

7 days of the date of these orders and failing agreement as determined by the President of the Real Estate Institute of Victoria or his or her delegate;
(c)the Property D property to be offered on an unconditional contract of sale for 60 days or such other period as agreed in writing between the parties;
(d)the parties are to do all things necessary to prepare the Property D property for sale and inspection and follow all reasonable directions of the selling agent;
(e)in the event the Property D property fails to sell at public auction then it shall remain listed for private sale;
(f)
the wife shall be at liberty to remain in occupation of the

Property D property until the settlement of its sale and is to pay all rates and taxes and any other outgoings with regards to the said property, as and when they fall due; and
(g)the solicitors for the husband shall have the conduct of the sale unless the parties agree in writing otherwise.
The proceeds of sale of the Property D property be applied, as follows:
(a)firstly, to pay all costs, commissions and expenses of the sale;
(b)secondly, to divide the net proceeds of sale, as follows:
(i)62.5% to the wife; and
(ii)37.5% to the husband.
The real property situate at and known as Property P in the State of Victoria, being the land more particularly described in Certificate of Title Volume [omitted] (‘the Property P land’) be sold by way of public auction, such auction to take place within 70 days’ hereof or be otherwise as agreed in writing between the parties. The following conditions are to apply:
(a)the estate agent to have the conduct of the sale will be as agreed between the parties and within 7 days of the date of these orders and failing such agreement, such agent shall be appointed by the President of the Real Estate Institute of Victoria or his or her delegate;
(b)
the reserve price shall be as agreed between the parties within

7 days of the date of these orders and failing agreement as determined by the President of the Real Estate Institute of Victoria or his or her delegate;
(c)the Property P land to be offered on an unconditional contract of sale for 60 days or such other period as agreed in writing between the parties;
(d)the parties are to do all things necessary to prepare the Property P land for sale and inspection and follow all reasonable directions of the selling agent;
(e)in the event the Property P land fails to sell at public auction then it shall remain listed for private sale; and
(f)the solicitors for the husband shall have the conduct of the sale unless the parties agree in writing otherwise.
The proceeds of sale of the Property P land be applied, as follows:
(a)firstly, to pay all costs, commissions and expenses of the sale;
(b)secondly, to pay out the mortgage encumbrance over the said property ;
(c)thirdly, to divide the net proceeds of sale then remaining equally between the parties, subject to order 5 herein.
Any Capital Gains Tax liability of the wife in respect of the Property P land be paid out of the net proceeds of sale of the Property P land and in equal proportions as between the husband and wife. If any reduction in the wife’s pension entitlement is occasioned as a result of this liability then such loss shall be borne equally between the husband and wife.
Otherwise each party be solely entitled to the exclusion of the other to all superannuation and other property owned by or in the possession of such party as at the date of these orders.
The exhibits tendered in the proceedings be returned to the parties

30 days from the date of these orders.
Otherwise all extant applications are dismissed and the matter removed from the list.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLC 10223 of 2008

MR AVERY

Applicant

And

MS AVERY

Respondent

REASONS FOR JUDGMENT

At the time the applicant husband commenced these proceedings he required the leave of the Court to file property proceedings out of time and pursuant to s.44(3) of the Family Law Act 1975 (‘the Act’). Such leave was granted by order of FM Walters on 25 March 2009.
Statement of facts in these reasons should be taken as findings of fact on the balance of probabilities.
The husband was born [in] 1944 and is now aged 67 years. The wife was born [in] 1947 and is now aged 64 years. Both parties are in receipt of Centrelink pension payments, the husband’s payments being slightly higher. The husband suffers from diabetes and hypertension. The wife’s health is also precarious and her pension recept is that of a disability pension. The parties married [in] 1968 in [omitted] in Egypt. They arrived in Australia in December 1968 (the husband) and August 1969 (the wife). The parties’ adult son [first name omitted] was born [in] 1970. The parties became Australian Citizens on 26 January 1972. They cohabitated until July 2000 and ceased all contact in January 2002 (on the wife’s evidence) and October 2003 (on the husband’s evidence). They cohabitated for approximately 32 years.
In July 2000, the husband left the former matrimonial home and travelled to Switzerland in Europe. He was not to return until February 2008, almost 8 years later. The wife was unaware of his intended departure. She was unaware of his contact details and whereabouts from January 2002 until June 2003. In August 2003, the wife obtained a divorce order which took effect from 21 September 2003.
The wife is the sole registered proprietor of Property D, being all of the land contained in Certificate of Title Volume [omitted]. This property was the former matrimonial home of the parties. It is a property in which the wife still resides. She has done so since the physical separation of the parties in July 2000. In that intervening period, of some eleven and a half years, the wife has attended to repayment of the rates and building insurance. She has had sole occupation of the property. In addition, the wife is the sole registered proprietor of a property at Property P being the land more particularly described in Certificate of Title Volume [omitted] (‘the Property P land’) which has a mortgage encumbrance but in relation to which she only recently commenced to make some payment. The wife became the sole registered proprietor of these two properties when the husband became a company director and transferred the properties from joint proprietorship to the sole name of the wife, in an attempt to preserve the parties’ assets should the company ventures be unsuccessful.
At the time of the trial, the husband’s financial statement disclosed minimal savings by way of assets and a personal loan of $2,000, together with a Centrelink loan of $538. He has no superannuation. The wife’s financial statement disclosed savings of approximately $7,000 together with superannuation entitlements of $1,500 and her interest in the two real properties. The mortgage secured over the Property P land was in the sum of $50,000.
The Property P land was financed by a gift from the wife’s mother to her daughter in the sum of $7,000. The balance of the purchase price of $13,000 was funded out of the parties’ savings. This property was acquired in 1988. Given the length of the marriage, the small quantum of the gift, the income earnt by the parties respectively and their overall contributions, both direct and indirect during this long marriage, the contribution by the wife’s mother does not alter the finding of an equal contribution by the parties until the point of the husband’s departure in the year 2000.
During the period of cohabitation and on 24 July 1989, the parties invested in a property at Property O. The property was registered in the sole name of the husband. The purchase price was $122,000 and a deposit of $22,000 was funded by part of the retrenchment package received by the wife upon her cessation of employment at [omitted]. This property was rented out, with rental receipts being applied to the mortgage repayments. The husband negatively geared this property and claimed the loss against his income which was intended by the parties. The property was sold by the husband shortly after his departure for overseas (following separation) and the net proceeds were retained by him in their totality. This was a sum of $67,000 and received by him in late 2000. He did not consult with the wife about his receipt of these funds and nor did he offer the wife any percentage of them at the time. In addition, prior to his departure for overseas the husband sold his car and retained the net proceeds (after payment of some accountant fees) of $10,000, a sum conceded by both parties.
During the marriage both the husband and wife worked. The wife was gainfully employed by [omitted] for nearly 20 years. On 31 May 1989 and being upon her departure from the [workplace], she received a final payment of $111,904.13. The wife’s evidence was that these funds were given by her to the husband for him to apply for the benefit of the family but that she never became aware of his application of such funds. The husband’s evidence was that the wife kept these funds under her control and applied them as she saw fit without reference to him. No compelling or corroborative evidence was produced by either party to determine the veracity of each of their claims. But I am satisfied that neither party has access to monies now and that in all likelihood their termination payment monies were expended by both of them for joint endeavours and the benefit of the family, with the husband spending some sums on travel costs to establish his business in the ending years of the marriage. Following cessation of her employment with [omitted] the wife worked in factories and housekeeping, finally ceasing work in December 2009. The husband’s evidence that wife did not work after 1993 is rejected but I accept that the wife’s income was minimal and that the parties lived between 1993 and 2000 on the monies received by the husband from income and his termination package. The husband was employed by [omitted] and when this employment ceased in 1993, after 23 years, he had received a lump sum termination payment of $308,000 approximately, which after the payment of taxation was a net amount of $220,000 approximately. The husband’s evidence is that by the year 2000 the monies received by him on his cessation of employment had been spent on normal living expenses and lost in part in the two companies which he had operated.
After his cessation of work at [omitted], the husband established successively two companies which he claimed dealt with [omitted]. He borrowed various sums for his business and/or personal use, together with the application of some of his retrenchment monies. The husband’s evidence is that the first company established by him in 1993 ([W] Pty Ltd) ceased trading after serious mismanagement by other directors and with a loss of $125,000. His second company ([M] Pty Ltd) commenced operation in March 1996. At that time he needed additional funds to be able to operate and so was forced to borrow further funds. The wife was a director of this latter company and it also failed in that it eventually ceased trading and throughout its operations provided only minimal income for the parties’ benefit. The husband was in some of his loan applications for finance dishonest in claiming as an asset, real property at Property W, not owned by him. Further, the husband described the purpose of one loan sought from [omitted] Credit Union as “I am heading overseas for an [omitted] job for 24 months during which I will let the house that I live in. Some renovations need to be done before letting the house.” This was clearly a fabrication. The wife knew nothing of the borrowings of the husband nor did she benefit from same. He certainly did not apply any funds to improvements to the former matrimonial home nor did he tell the wife of his intended departure from the country. He had no job overseas. However, the husband’s evidence was that he did not submit all such loan applications and therefore did not make a false representation to any lending body. Again, no corroborative or compelling evidence on either side was produced. What eventuated was that any monies borrowed by the husband were repaid by him during the business operations.
In November 2007, the wife and the parties’ son jointly obtained a mortgage on the Property P property in the sum of $50,000. The son then proceeded to take $30,000 of these monies and provide same to his father as agreed between the parties and their son. Their son retained the sum of $20,000 for his own benefit and he attends to the interest repayments on the total loan. The husband’s evidence that he received only $21,000 is rejected as the evidence of the wife is preferred, it having remained consistent throughout and the husband’s having not in his affidavit material. Indeed in an affidavit sworn

19 November 2009, the husband supported the wife’s evidence. Neither party sought to place evidence before the Court from their adult son.
The most significant asset of the parties and which remains is the former matrimonial home. It was purchased in 1983 and after the parties had bought and sold an earlier home in [suburb omitted]. The purchase price was $78,500 and was funded with the net proceeds of sale of the earlier property and mortgage funds. The wife claimed to have, in addition to meeting the mortgage repayments, paid for all the living expenses of the family with the husband keeping his earnings for his own personal use save for his payment of the rates, power and gas, and their son’s school fees. In addition, the wife’s evidence was that “I would regularly have to give the applicant money, sometimes thousands of dollars. We both used separate bank accounts. We lived very frugally.” The husband denied this and claimed the family lived comfortably and that they provided well for their son, including meeting the not insignificant costs of his tertiary education. His evidence was that each party had their own bank account and that they had in addition a joint account. The mortgage repayments were made out of the wife’s account [details omitted].. I prefer the evidence of the husband and find both parties contributed all their income and efforts for the benefit of the family. The husband’s income was higher throughout and he controlled the family finances, as agreed between the parties. They both worked hard and attempted to advance the family’s fortunes.
The asset pool
1. The former matrimonial home situate at:
Property D  $750,000
2. The land property situate at:
Property P    $125,000
Less mortgage   $50,000
Equity  $75,000
3. Wife’s superannuation entitlements   $1,500
Total  $826,500
4. Note: in the running of the matter the husband sought to include various tools, fishing gear and a magazine and gold coin collection, in relation to which there was no valuation and no admissions by the wife that same still existed and/or ever existed as described by the husband save some magazines and a pre-marriage photo. Given the length of time that had elapsed since the husband’s departure from the home and the inadequate state of the evidence, those items were not included. Further, the husband’s unsupported claim that in 2000 he left the wife with furniture and furnishings that he would value at between $10,000 to $20,000 at the time, is also not given any weight.
The parties’ contributions during their long marriage were equal. The current financial position of each, and age and state of health, in particular determine no adjustment in either’s favour under a consideration of the totality of the s.75(2) matters as set out in the Act, save for as set out in the last paragraph of these reasons. The real issue for the Court was how to ‘add-back’ certain monies received by the husband, the allegations of the wife that other monies had been received and then the justice and equity of any orders made.
The parties agree that the husband received $10,000 plus $67,000 in 2000 and I find he received a further $30,000 in 2007. This is a total sum of $107,000. The advance by the parties to their son of $20,000 was an equal one and will be borne equally by the parties in those orders I make with respect to the Property P land.
The wife’s case is that further ‘add-back’ amounts should be included in the asset pool being the husband’s retrenchment package, the wife’s retrenchment package, an alleged inheritance of the husband received in 1999 of $110,000 and earnings of the husband in Egypt post separation as alleged of $150,000. This approach is simply fanciful and not supported by any persuasive or proper evidence. I accept the evidence of the husband in response to the wife’s allegations. He did not work overseas after he departed Australia in 2000 and lived with relatives and off the monies taken by him until 2007 when he required further funds which were advanced to him by the wife and the parties’ son. He returned to Australia to live variously with family members and in boarding houses. He has not received an inheritance. The parties’ retrenchment monies were spent over many years, some 11 in total, subsidizing their living expenses, being applied to extinguishment of their mortgage obligation over the former matrimonial home, the purchase of a motor vehicle for the husband and the operating costs of ultimately two failed businesses. There is no evidence on which the Court could conclude that the husband was negligent or wasted the parties’ assets in his operation of the import/export businesses. He did his best but was simply unsuccessful. Throughout however, the parties were afforded a lifestyle, though one with which they no doubt struggled at times given the earlier financial security derived from their respective employment and incomes. The husband was a credible witness when recalling, or attempting to, the financial dealings of the parties over so many years and which concluded so many years ago.
The wife has preserved her superannuation entitlement and I propose she keep it in its entirety. It is a modest amount and would do justice and equity between the parties for her to be able to retain this.

The former matrimonial home I propose to deal with differently from the land at Property P. The wife has been since 2000, the sole registered proprietor and has maintained and preserved the property without any assistance from the husband. The assets in the husband’s control at the time of separation he liquidated and obtained for his own benefit keeping the total sum. The monies the husband has already had were of course worth more at the time of payment to him than such sums are worth now. He has received a total of $107,000. These are other, relevant matters. The wife’s preservation and maintenance of the former matrimonial home from the time of the husband’s departure is a greater contribution to this asset than the contribution of the husband. Her occupation of the home does not eliminate a weighting in her favour. It is just and equitable that I make orders which acknowledge these matters and give to the wife some greater percentage of the former matrimonial home which also takes into account the monies already received by the husband.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Hartnett FM

Date: 8 July 2011