B and B
[2007] FMCAfam 244
•4 May 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| B & B | [2007] FMCAfam 244 |
| FAMILY LAW – Property – equal contributions – adjustment for future needs of wife – 67.5% for wife. FAMILY LAW – Spousal maintenance – inability of wife to support herself not established – husband has no capacity to pay – application dismissed. |
| Family Law Act 1975, ss.72(1),74(1), 75(2). 75(3), 79(2), 79(4) |
| Hickey v Hickey (2003) FLC 93-143 Australian Family Lawyer, volume 19 number 3 |
| Applicant: | MB |
| Respondent: | AB |
| File number: | BRM 9429 of 2005 |
| Judgment of: | Riley FM |
| Hearing dates: | 18 & 19 April 2007 |
| Date of last submission: | 19 April 2007 |
| Delivered at: | Melbourne |
| Delivered on: | 4 May 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr Crozier-Durham |
| Solicitors for the Applicant: | Calleas Le Brun & Burke |
| Advocate for the Respondent: | Mr Boundy |
| Solicitors for the Respondent: | Andersons Solicitors |
ORDERS
As and by way of property settlement, on or before 18 July 2007 (“the date”) the wife pay or cause to be paid to the husband’s solicitor for the husband the sum of $46,450 (“the payment”).
Contemporaneously with the payment:
(a)the husband do all things and sign all documents necessary to transfer to the wife at the expense of the wife all of his right title and interest in the property situate at and known as 3 T Court A (“the property”).
(b)the wife cause the mortgage to the Bank of Melbourne secured against the title of the property (“the mortgage”) to be discharged and thereafter indemnify the husband and keep him indemnified in relation to the mortgage and any liability he may have in respect of the property.
Pending the payment and transfer of sale of the property:
(a)the wife have the sole right to occupy the property and during such right of occupation the husband continue to pay all instalments in respect of the mortgage and the wife continue to pay all rates, taxes and other outgoings with respect to the property as they fall due;
(b)the parties hold their respective interests on trust pursuant to these orders; and
(c)neither party encumber the property without the consent in writing of the other party.
In default of the payment by the date, the property be sold out of court and the proceeds of sale be disbursed:
(a)first, to pay the costs, commissions and expenses of the sale;
(b)secondly, to discharge the mortgage and other encumbrances affecting the property;
(c)thirdly, 32.5 percent of the balance less $40,000 to the husband; and
(d)fourthly, 67.5 percent of the balance plus $40,000 to the wife.
Unless otherwise specified in these orders and save for the purpose of enforcing any moneys due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including chose in action) in the possession of such party as at the date of these orders, including motor vehicles, bank accounts, furniture, personal possessions and like chattels;
(b)each party forego any claims they may have to any superannuation benefits belonging to or earned by the other;
(c)insurance policies remain the sole property of the owner named therein; and
(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.
All extant applications, including the wife’s application for spousal maintenance, be otherwise dismissed and the proceedings removed from the list of cases awaiting hearing.
Pursuant to rule 21.15 of the Federal Magistrates Court Rules 2001, it is certified that it was reasonable for the parties to employ an advocate.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
BRM 9429 of 2005
| MB |
Applicant
And
| AB |
Respondent
REASONS FOR JUDGMENT
This matter came before the court with applications for final parenting and property orders and for orders for spousal maintenance. However, the aspect of the case concerning the children was resolved by consent with the children to live with their mother and spend time with their father on specified occasions and otherwise by agreement.
The matter proceeded on the basis of the affidavit evidence and submissions. There was no cross examination and no substantial dispute as to the facts of the case. The applicant wife was born in
1960 and is now 46 years old. The respondent husband was born in 1959 and is now 48 years old. They were married in Y in 1983 and came to Australia in 1983. Their first child was born in 1990 and the second in 1998. The first is now 17 years old and the second is eight and a half years old. The parties separated in 2003 and were divorced in 2006.
From 1983 to 1991, the husband worked at BP in Melbourne and from 1983 to 1990, the wife worked in a laundromat in B on a full time basis. She ceased work in 1990 when she was pregnant with the first child. In 1991, the family moved to Queensland as a result of the husband’s employment at BP being transferred there. The parties returned to Melbourne in 1993 and the husband resumed his employment at BP in Melbourne.
In 1992, the parties bought a block of land on which they built the matrimonial home in 1993. The bulk of the funds for the construction were borrowed. In 1996, the husband and wife began a cleaning business but the wife stopped working in the business in July 1998 as a result of her pregnancy with the second child. The husband had remained working at BP but ceased working there in 2000. The family became dependent on Centrelink payments and the proceeds of the sale of an investment property at PC. In 2000, the wife took the children overseas to visit her family for a period of three months using the parties’ joint savings.
In July 2003, the husband went on a holiday to Queensland with friends and returned to the matrimonial home saying that he had met someone else. The parties then separated. In August 2003, the husband withdrew $20,000 on the home loan to establish himself in Queensland with his new partner. He is presently renting accommodation for himself, his new partner and her 10 year old son.
The parties agreed that their contributions to the asset pool had been equal. They also agreed that the matrimonial home had a value of $285,000 less a $70,000 mortgage, leaving an equity of $215,000. Additionally, the wife owns a car, the agreed value of which is $6,000, and house contents, the agreed value of which is $5,000. Otherwise, the husband has $20,000 in superannuation and the wife has none. There was some discussion at the hearing about whether a further sum of $15,000 should be included in the asset pool. This sum was said to be the remainder of the proceeds of the PC property. However, there was no documentary evidence that the $15,000 is still held by or on behalf of the parties. It was eventually agreed that the $15,000 should not be included in the asset pool. On the other hand, the parties agreed that the $20,000 drawn down by the husband from the mortgage loan is to be added back to the pool. Accordingly, the agreed asset pool is $266,000, being $215,000 for the house, $6,000 for the car, $5,000 for the furniture, $20,000 for the husband’s superannuation and $20,000 for the add back.
The wife filed a financial statement on 21 September 2006 which indicated that she was in receipt of Centrelink benefits in the sum of $427 per week. It was agreed that the husband was presently paying the wife $100 per week in child support and $150 per week for the mortgage on the matrimonial home, in which the mother and children live, making a total of $250 per week. It was also agreed that if and when the mother makes an application for child support, the husband would be liable to pay her $276.93 for the two children and that when the older child turns 18 in about a year, the child support amount for the younger child would be $184.62 per week.
The wife in her financial statement said that her average weekly expenditure for herself and her two children was $680 which included $250 per week for food, $50 per week for electricity, $80 per week for petrol and $50 per week for educational expenses. Additionally, the wife said she paid $10 per week for rates, $20 per week for car and house insurance and $5 per week for motor vehicle registration. This makes for a total expenditure of $715 per week as against the $677 that the wife says she receives in total, being $427 from Centrelink and $250 from the husband.
The husband’s financial statement filed on 8 November 2006 said that his total average weekly income was $1,300 from his employment in Queensland. His financial statement indicated that he paid no income tax but it was agreed at the hearing that his weekly income tax was $321. The husband said in his financial statement that on average each week he paid $255 in rent, $150 for the mortgage on the matrimonial home, $160 for credit card debts and $100 for child support. The figure disclosed at item 33 of the husband’s financial statement, being the amount of his total personal expenditure, was $665 per week. However, if the correct figure for income tax is included, that figure would be $986.
Additionally, at item 60 of the financial statement, the husband said that he had a total weekly expenditure of $425 for himself and his new wife and her child. That amount should have been included at item 32 of the financial statement but was not. The figure of $425 included $170 per week for food, $25 per week for electricity, $50 per week for petrol and $5 per week for education expenses. Added to the figure of $986 mentioned above, this makes a total of $1,411 weekly expenditure as against an income of $1,300. Of the $425, an amount of $60 was expended on behalf of the son of the husband’s new wife. If that amount is removed from the total expenditure, it leaves a weekly expenditure of $1,351 as against an income of $1,300.
The husband’s financial statement indicated that the other occupants of his household, being his new wife and her 10 year old son, have no income. It was put from the bar table that the husband’s new wife must have been in receipt of some sort of family allowance. However, there is no evidence to that effect. I am unable to conclude that the husband’s new wife is in receipt of family allowance. Both the husband and the wife indicated that they had no financial resources or assets other than the matrimonial home and the income stated in their financial statements. There was no dispute about the contents of the financial statements.
In her affidavit sworn on 18 September 2006, the wife said that when she and the husband separated she became sick. She said she had a heart attack for which she was admitted to hospital for three days and later a gall stone operation. The wife said that she was not fit to work as she suffered from depression and anxiety and migraines. She said that she had lost 30 kilograms in weight and was not eating or sleeping well. She said that she cries endlessly at unexpected moments. Nevertheless, at the hearing, the wife’s counsel conceded, correctly in my view, that these matters did not “disqualify” the wife for employment. Counsel emphasised the wife’s child care responsibilities, her lack of skills and training and the fact that she had not worked outside her own family business for many years. Additionally, the wife has limited English.
Spousal maintenance
In her application as filed, the wife sought orders for such an amount of weekly or lump sum spousal maintenance as the court deemed just and equitable. When the matter came before the court, the wife indicated that she sought $150 per week for a period of time that would result in her receiving $10,000 as spousal maintenance. She asked that the spousal maintenance be capitalised and paid as a lump sum. The husband opposed the court making any order for spousal maintenance.
Section 72(1) of the Family Law Act 1975 (“the Act”) provides that:
(1)A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
The matters to referred to in sub-s.75(2) of the Act are as follows:
(a)the age and state of health of each of the parties;
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
(e)the responsibilities of either party to support any other person;
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party;
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
(l)the need to protect a party who wishes to continue that party’s role as a parent;
(m)if either party is cohabiting with another person–the financial circumstances relating to the cohabitation;
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party;
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties.
By virtue of s.75(3) of the Act, the court is required to disregard the wife’s entitlement to Centrelink benefits. The court is required under s.74(1) of the Act to take into account the specified matters and then make such order as it thinks proper.
The wife has the care and control of the two children of the marriage, one of whom is 17 and the other eight years of age. I do not consider that the wife having the care and control of the children of the marriage of itself means that the wife is unable to adequately support herself given that both children are at school. The older child, at the age of 17, needs limited care and supervision. On the other hand, I accept that as she is currently doing VCE, she may need a good deal of stability in her life and general support from her family.
I do not consider that the wife’s age or physical or mental state is such as to prevent her obtaining gainful employment. Although, she has had some health problems in the past and has some ongoing health or emotional issues, they are not such as to incapacitate or “disqualify” the wife for appropriate gainful employment. The mother has done unskilled work in the past. There was no evidence before the court that the wife has sought suitable employment and been unable to find it.
The husband’s solicitor made reference to the decision of Mitchell & Mitchell (1995) FLC 92-601 at 81,997 where it was said that:
There is the notorious circumstance that there is a significant gap between theory and reality for employment, especially for people in middle age, lacking experience and confidence, and who have been out of the skilled workforce for many years, and in the context of current high unemployment. Loss of security, missed promotion opportunities, loss of retraining and developing skills in an increasingly skilled workforce with the loss of confidence which this brings, particularly in times of high unemployment, are notorious circumstances of which the Court must take notice and apply in a realistic way.
In the present case, it was accepted that we are not now in a time of notoriously high unemployment. Indeed, if anything, we are now in a time of notoriously low unemployment. The service industries, including domestic cleaning, have expanded considerably in recent times.
The husband’s solicitor also made reference to the decision of the Full Court of the Family Court McCrossen & McCrossen (2006) FLC 93-283 and to the commentary in the Australian Family Lawyer on that case in volume 19, number 3. In McCrossen the Full Court noted:
[31] The question whether an applicant can support his or herself “adequately” is not to be determined by reference to any fixed or absolute standard but by having regard to the matters referred to in s 75(2): Mitchell (supra at p 81,995).
[32] The question is not to be determined upon a “subsistence level” but upon consideration of whether the applicant can support himself or herself “adequately” importing a standard of living reasonable in the circumstances: Mitchell (supra); Evans and Evans (1978) FLC 90-435; Brady and Brady (1978) FLC 90-513 at 77,701; Gamble and Gamble (1978) FLC 90-452; Wilson and Wilson (1989) FLC 92-033 and Bevan and Bevan (1995) FLC 92-600.
…
[35] Thus in our view the trial Judge was required to consider:-
(a) whether employment was available to the wife having regard to the practical realities of her age, experience and confidence having been out of the workforce for a number of years; and
(b) if so, the level of income the applicant might earn from such employment and whether in the circumstances of this case such income fell below adequate support and thus met the requirements of s 72.
[36] The trial Judge clearly acknowledged that if the wife was the primary carer of the two children, that responsibility would impact upon her ability to engage in full time employment. However, he noted that the evidence established that despite the length of time that had passed since she had worked outside the home she had skills that would on the balance of probabilities make her employable in the positions identified by the witness called for that purpose, Mr Robertson. He noted that the difficulty she had in satisfying the threshold question as to whether she was unable to support herself adequately was that she had not made any attempt to obtain employment despite having had the opportunity to do so. Counsel for the wife contended that Mr Robertson had never met the wife nor spoken to referees so that the weight that the trial Judge gave to this evidence should have accommodated those shortcomings.
…
[44] Section 72 requires that a party establish that they are unable to support themselves, not that they are unable to support themselves in a particular area of endeavour as opposed to another which may be available to them. In this case the wife’s own evidence enabled his Honour to conclude that she had not sought and did not want the kind of work that she had done previously, albeit that such work may have been available to her with a relatively short period of training. The trial Judge was also aware that the husband had been paying spousal maintenance of $215 per week since separation in July 2000, a period of over four years and that during that period she had made no attempts to obtain employment. (emphasis added)
The wife’s counsel sought to distinguish McCrossen on the grounds that it concerned a person who had worked as a senior public servant and wished to retrain as a teacher. However, the critical factors in McCrossen were contained in the sentence set out in bold in the previous paragraph. They are that the wife:
a)had not sought the kind of work that she had done in the past; and
b)did not want that kind of work; even though
c)it might have been available to her within a relatively short period of time.
In the present case, the wife’s evidence did not indicate that she had sought the kind of work that had previously been available to her but had been unable to find any. The court has no reason to suppose that such work would not be available to the wife if she sought it. Having said that, I accept that the wife would not be able to work full time, due to her childcare responsibilities and would probably not earn a substantial income given her lack of lucrative skills. As a rough indication, if she were to work as a cleaner, for say, six hours a day, five days a week, at $20 per hour, she would earn about $30,000 per year. Assuming that she paid the proper level of tax on that income, her earnings would at best be very modest.
In relation to the section 75(2) factors, I note the following. The husband is 48 years old and is in a reasonable state of health. The wife is 46 years old and is also in a reasonable state of health, although she has had some health issues in the past and presently suffers from a degree of depression which is being treated with antidepressants. The husband currently earns $1,300 per week or $67,600 per year. He has no other income or property or financial resources. The wife is in receipt of a Centrelink pension which I must disregard under s.75(3) of the Act. Under the property orders to be made in this case, the wife has first option on the matrimonial home but it will be subject to a considerable mortgage. She also has a car and her home contents which are of little value. Otherwise, the wife has no property or financial resources. Both parties have the physical and mental capacity for appropriate gainful employment, although in the wife’s case, that employment would only be part time and would not be particularly remunerative.
The wife has the care and control of the two children of the marriage. They are aged 17 years and 8 years. The wife is obliged to support herself and her children and meet the mortgage repayments on the house. The husband must pay child support for the two children of the marriage and also support his new wife. The husband pays money into a superannuation scheme but is not presently entitled to any benefit from it. The wife is eligible for a pension. The evidence before the court suggests that the parties have always had a relatively modest standard of living except that the wife has travelled overseas to see her family. There is no suggestion that either party wishes to undertake a course of education or training. There is no suggestion that either party has any creditors except for the mortgagee in relation to the matrimonial home.
Both parties have contributed equally to the income, earning capacity and financial resources of the other. The marriage lasted 20 years and I accept that it may have reduced the earning capacity of the wife. I also accept that the wife’s capacity to earn an income is limited to some extent by her wish to fulfil her obligations as a parent. The husband has an obligation to support his new wife with whom he cohabits. The orders that are proposed to be made by way of property settlement will include an adjustment in favour of the wife for her future needs. It is anticipated that the husband will pay $276.93 per week for the support of the two children of the marriage at least while the older child is under 18. The wife will receive that sum. There was no suggestion that there is any financial agreement that is binding on the parties. There does not appear to be any other facts or circumstances that the justice of the case requires to be taken into account.
In all the circumstances, I am not satisfied that the wife has demonstrated that she is unable to adequately support herself to a standard that is reasonable in the circumstances. She has not provided any evidence that she has sought employment and been unable to find any. Although she presently has some health or emotional issues, they are being treated with antidepressants. There was no medical evidence that the wife is unfit for work. It was conceded at the hearing, correctly, in my view, that the wife’s health and emotional issues do not “disqualify” her for work. I accept that the wife might not be able to earn very much. However, she will be in receipt of $276.93 per week in child support for the time being. All in all, I am not persuaded that the wife does not have the ability to adequately support herself.
In any event, I am not satisfied that the husband is reasonably able to provide maintenance to his former wife. The application for spousal maintenance appears to have been predicated on the assumption that the husband pays no income tax and on the assumption that he would continue to pay only $100 per week child support as he has done in the past and nothing for the mortgage. In fact, the husband will be liable to pay $276.93 per week for child support which is a little more than the combined total of the amount he is presently paying for child support and the mortgage. There is no reason to doubt that the husband will pay the proper level of child support. He also pays $321 per week in income tax. In the circumstances, the husband has weekly outgoings of $1,411 and an income of $1,300.
There was no suggestion that any of the husband’s expenses as disclosed in his material was unreasonable. Indeed, the husband’s expenses for food, electricity and petrol were less than the wife’s. It was suggested that the husband has no obligation to support the son of his new wife. However, the amount disclosed as expenditure in respect of the son is only $60 per week. Even if that amount were excluded, the husband’s expenses would still exceed his income by about $50 per week. For these reasons, the husband is not reasonably able to pay spousal maintenance to the wife. Accordingly, the application for spousal maintenance must be dismissed.
Property
The wife at the hearing sought orders as follows:
11.That as and by way of property settlement on or before
18 July 2007 (the date) the Wife pay or cause to be paid to the Husband’s solicitor for the Husband the sum of $26,500 (the payment).
12.That contemporaneously with the payment:
a.the Respondent Husband do all things and sign all documents necessary to transfer to the Wife at the expense of the Wife all of his right title and interest in the property situate at and known as 3 T Court A (the A property).
b.The Wife cause the mortgage to the Bank of Melbourne secured against the title of the A property (the mortgage) to be discharged and thereafter indemnify the Husband and keep him indemnified in relation to the mortgage and any liability he may have in respect of the A property.
13.That pending the payment and transfer of sale of the A property:
a.The Wife have the sole right to occupy the A property and during such right of occupation the Husband continue to pay all instalments in respect of the mortgage and the Wife continue to pay all rates, taxes and other outgoings with respect to the A property as they fall due;
b.The parties hold their respective interests on trust pursuant to these orders; and
c.Neither party encumber the A property without the consent in writing of the other party.
14.That in default of the payment by the date the A property be sold out of court and the proceeds of sale be disbursed:
a.first, to pay the costs, commissions and expenses of the sale;
b.secondly, to discharge the mortgage and other encumbrance affecting the real property;
c.thirdly, so much of the payment as is then outstanding together with interest thereon at the rate prescribed by the Family Law Rules adjusted monthly from the date to the Husband;
d.fourthly, the balance to the Wife.
15a. This is an order to which section 77A of the Family Law Act 1975 applies.
b.The amount of $10,000 of the monies of the wife ordered to be paid by the Wife and of the value of the property to be transferred to the Wife is attributable to the provision of maintenance to the Wife.
16. Unless otherwise specified in these orders and save for the purpose of enforcing any moneys due under these or any subsequent orders:
a.each party be solely entitled to the exclusion of the other to all other property (including chose in action) in the possession of such party as at the date of these orders, including motor vehicles, bank accounts, furniture, personal possessions and like chattels;
b.each party forego any claims they may have to any superannuation benefits belonging to or earned by the other;
c.insurance policies remain the sole property of the owner named therein;
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.
…
18.All extant applications be otherwise dismissed and the proceedings removed from the list of cases awaiting hearing.
19. Certify for Counsel and solicitor as advocates.
The husband sought essentially the same orders, albeit with different figures. While the wife sought a 75 percent split in her favour, including a capitalised amount of $10,000, for spousal maintenance, the husband sought a 60 percent split in the wife’s favour.
The legislation
Section 79 of the Act defines the Court’s powers in determining applications for property settlement. Sub-section 79(2) of the Act provides that:
The Court shall not make an Order under this Section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.
Section 79(4) of the Act sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters are:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The matters to be taken into account under sub-s.75(2) of the Act are set out above in relation to the spousal maintenance application.
The four step approach
In Hickey v Hickey (2003) FLC 93-143 at [39], the Full Court of the Family Court described the preferred four step approach in property matters as follows:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), ("the other factors") including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case ….
The asset pool and liabilities and financial resources of the parties are as set out above. The parties agree that their contributions to the asset pool were equal. As to the factor in s.79(4)(d), it was not suggested that any proposed order would have any effect on the earning capacity of either party to the marriage. As to the factor in s.79(4)(f), the wife’s spousal maintenance application has been dismissed on the basis that she is adequately able to support herself and, alternatively, on the basis that the husband is not able to reasonably provide her with spousal maintenance. Other orders have been made providing for the children to live with their mother and to see their father on a number of occasions in Victoria at his expense and otherwise by agreement. As to the factor in s.79(4)(g), in the past, the husband has provided $100 per week child support for the children of the marriage and has also paid $150 for the mortgage on the matrimonial home where the children live. It is understood that in the immediate future he will be assessed to pay child support of $276.93 per week. There is no reason to doubt that he will pay the child support as assessed.
As to the factor set out in s.79(4)(e), which imports the matters set out in s.75(2) of the Act in so far as they are relevant, those matters have already been discussed in relation to the spousal maintenance application. I adopt that discussion in relation to the property application.
In my view, the matters mentioned in s.75(2) of the Act and the matters mentioned in paragraphs 79(4)(d), (f) and (g) of the Act require an adjustment to be made in the wife’s favour of 17.5%. The principal reasons for this are the husband’s earning capacity is much greater than the wife’s, the fact that the wife has the care and control of the two children of the marriage, one of whom is only eight years old, and the fact that the husband is likely to pay the appropriate level of child support. I acknowledge that, at the hearing, I indicated that a lower percentage might be appropriate as an adjustment in favour of the wife. However, I gave that indication without appreciating that the husband’s annual income was as high as $67,600.
The parties accept that the wife should have the option of buying the husband out of the matrimonial home and, if she is unable to do so, the property will need to be sold. The parties agree that the asset pool is $266,000. They agree that that sum should be multiplied by the percentage I determine will be the husband’s share of the pool and from that sum, $20,000 should be deducted for the husband’s superannuation and $20,000 should be deducted for the add back resulting from the husband’s drawn down of $20,000 from the mortgage. It is accepted that the wife will keep her car and the contents of the matrimonial home as part of her share of the assets. If the wife is unable to pay the husband the appropriate sum, it was agreed that the matrimonial property would need to be sold. In that event, it was agreed that the husband would receive an amount from the proceeds of sale less $20,000 for his superannuation which he would keep and $20,000 for the draw down from the mortgage. The wife would receive the $40,000 plus the balance.
Using the agreed methodology, the amount to be paid by the wife to the husband is $266,000 times 32.5% which equals $86,450 less $40,000 making a total of $46,450. In the event that the wife is unable to pay that sum and the property must be sold, there was some argument about whether the wife should pay the husband a fixed amount or whether the proceeds should be divided on a percentage basis less the $20,000 for the superannuation and the $20,000 for the add back.
No authority was provided to the court supporting the wife’s proposition that in the event the property is sold, the husband should be paid a fixed amount and the wife should receive the balance. I do not think that course is appropriate in this case. If property values increase, as they appear to be doing at the moment, it would create an unjust outcome for the husband. However, if property values decrease, contrary to expectations, it would create an injustice for the wife. Accordingly, I consider that the fairer approach would be for the husband to receive 32.5% of the proceeds of sale, less $40,000, and for the wife to receive the $40,000 plus the balance.
I consider that the orders contemplated by these reasons are just and equitable. Orders will be made accordingly.
I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of Riley FM
Associate: Melissa Gangemi
Date: 4 May 2007
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