BADER & BADER
[2020] FCCA 108
•31 January 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BADER & BADER | [2020] FCCA 108 |
| Catchwords: FAMILY LAW – Property adjustment – assessment of contributions – orders made. |
| Legislation: Family Law Act 1975 (Cth), ss.75, 79 |
| Cases cited: Lotta & Lotta [2017] FamCA 50 Stanford v Stanford [2012] HCA Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 |
| Applicant: | MR BADER |
| Respondent: | MS BADER |
| File Number: | PAC 5636 of 2017 |
| Judgment of: | Judge Newbrun |
| Hearing date: | 2 October and 4 December 2019 |
| Date of Last Submission: | 4 December 2019 |
| Delivered at: | Parramatta |
| Delivered on: | 31 January 2020 |
REPRESENTATION
| Counsel for the Applicant: | Ms Hamilton |
| Solicitors for the Applicant: | Ms Watkins |
| Solicitors for the Respondent: | Mr Kerrison |
ORDERS
Within 10 weeks of the date of these orders, the wife shall pay the husband $48,150.
If at the expiration of 10 weeks from the date of making these orders, the wife has failed to pay the husband $48,150, then the Husband and the Wife shall forthwith do all such things as may be necessary to list the property situated at and known as B Street, Town A in the State of New South Wales being all of the land comprised in Folio Identifier …18 (“Town A property”) for sale by private treaty with a real estate agent agreed and failing agreement with a real estate agent nominated by the President for the time being of the Real Estate Institute of New South Wales or his nominee for the best price reasonably obtainable and to distribute the proceeds of such sale as follows:
(a)In payment of real estate agent’s commission and expenses on the sale.
(b)In payment of proper legal costs and disbursements of each of the parties of and incidental to the sale.
(c)In adjustment of rates, levies and taxes on Town A property.
(d)In payment of the balance then remaining as follows:
(i)$48,150 to the Husband;
(ii)the balance to the Wife.
That the husband shall be declared the sole and beneficial owner of the investment held in joint names with Company C (the Company C investment). In this respect, the following provisions shall apply:
(a)Within 14 days of these date of the Orders, the husband shall deliver to the wife all such documents necessary for the wife to transfer to the husband all her right, title and interest to and in the Company C investment.
(b)Within 28 days of the date of these Orders, the wife shall deliver to the husband all transfer documents in relation to the Company C investment duly executed by her.
That the Husband shall be and is hereby declared to be the sole and absolute owner at law and in equity as against the Wife:
(a)Any motor vehicle in his possession;
(b)All items of furniture and contents in his possession;
(c)All savings or monies in his possession, custody or control, other than stated above;
(d)His contributions and accumulated entitles with respect to or arising from his membership of any superannuation fund, other than stated above; and
(e)His employment related entitlements including but not limited to annual leave, sick leave and long service leave.
That the Wife shall be and is hereby declared to be the sole and absolute owner at law and in equity as against the Husband:
(a)Any motor vehicle in her possession;
(b)All items of furniture and contents in her possession;
(c)All savings or monies in her possession, custody or control, other than stated above;
(d)Her contributions and accumulated entitles with respect to or arising from her membership of any superannuation fund, other than stated above; and
(e)Her employment related entitlements including but not limited to annual leave, sick leave and long service leave.
That in the event that either party refuses or neglects to comply with any part of these Orders in relation to the execution of any deed, instrument or document the Court appoints and authorises the Senior Registrar of the Family Court of Australia, Parramatta Registry, and/or any Registrar or Deputy Registrar thereof to execute such deed, instrument or document in the name of the party who so refuses or neglects and further appoints that Registrar or Deputy Registrar to do all acts and things necessary to give validity and operation to the deed, instrument or document.
Liberty to the parties to apply to the Court on seven days’ notice in relation to the implementation of the above Orders.
IT IS NOTED that publication of this judgment under the pseudonym Bader & Bader is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 5636 of 2017
| MR BADER |
Applicant
And
| MS BADER |
Respondent
REASONS FOR JUDGMENT
Background
These are Reasons for Judgment relating to property proceedings between the parties.
The husband sought Orders as set out in his Further Amended Initiating Application filed 12 March 2019, inter alia, being that the property B Street, Town A (hereinafter referred to as the Town A property), in the name of the wife ($640,000), be sold and the net proceeds be divided equally, and that the parties jointly owned Company C portfolio investment ($57,000) be divided equally between the parties.
The wife sought Orders as set out in her Amended Response filed 2 April 2019. Inter alia, she sought orders providing that the wife transfer her interest in the Company C asset to the husband (so that the husband becomes its sole owner), and that the husband’s Further Amended Initiating Application filed 12 March 2019 be dismissed, resulting in the wife retaining the Town A property.
On 5 March 2019, the Court made orders appointing the husband’s daughter, Ms D, as the husband’s litigation guardian. The husband did not give oral evidence. The wife gave oral evidence and was cross-examined.
Material
The husband relied upon the following material:
a)Further Amended Initiating Application filed 12 March 2019;
b)Affidavit of Mr Bader sworn 19 September 2018;
c)Affidavit of Ms D sworn 11 September 2019;
d)Affidavit of Consultant Psychiatrist Dr E sworn 13 June 2019;
e)Affidavit of Mr A Bader sworn 11 September 2019;
f)Financial Statement of husband filed 18 February 2019.
The wife relied upon the following material:
a)Amended Response filed 2 April 2019;
b)Affidavit of Ms Bader filed 13 March 2019;
c)Financial Statement of Ms Bader filed 11 March 2019;
d)Affidavit of Robert Francis Kerrison filed 19 September 2019;
e)Affidavit of geriatrician Dr G filed 19 September 2019.
The following Exhibits were relied upon:
a)Exhibit A: Centrelink documents;
b)Exhibit B: Tagged medical documents;
c)Exhibit C: Life tables and explanatory notes;
d)Exhibit D: Agreed Inventory of Property and a Company C annexure.
Evidence
The husband is aged 86 years. The wife is aged 68 years.
The wife currently lives at the Town A property. The husband lives with his son Mr B Bader and his family in a two-bedroom unit at Town H.
The parties’ relationship spanned from about mid-1994 to about March 2017, a period of almost 23 years.
At cohabitation, the husband owned a property at Suburb I (which had been purchased in 1990 for $72,000 and which had been the subject of renovations by the husband), the remainder of his superannuation entitlements, $65,000, and a Toyota car, $2,000.
At cohabitation, the wife owned the Town A property (which was fully furnished), which she had purchased for $167,000 in about mid 1993; savings of about $111,000; a car worth $12,000; and a half share in a holiday house at Town J (such share was realized in 1995 when this holiday house was sold and the wife received about $38,000 in about August 1995).
The husband later placed the above remainder of his superannuation entitlements into an investment with Company C.
The husband sold the property at Suburb I in about mid 1996 for $72,000. He received net $69,000.
The husband asserts that he provided $60,000 of the above $69,000 to the wife, and when giving it to her he asserts the wife said, “You have purchased a one third share in the property”. The husband asserts that the reference to “the property” was a reference to the Town A property. The Court does not accept that the husband made a discrete payment of $60,000 to the wife as alleged, and nor does it accept that this alleged conversation occurred.
In February 2000, the parties executed Wills. The husband’s will provided for his entire state to pass to the wife if she survived him. The wife’s will provided a right of occupancy of the Town A property property to the husband for life, with her residuary estate, on the husband’s death, passing as to 2/3 to the wife’s children, and 1/3 to the husband’s children. The wife’s then solicitor had suggested to the wife that she should leave her estate (residuary) in the manner which appears in her February 2000 will; the wife had agreed with this suggestion because she loved the husband.
At cohabitation, the wife had a savings account with the NAB. Her savings were held in this account. She also held a NAB Visa card. Each party held a K Bank account. The husband’s K Bank account had the Company C investment income payments paid into it. The wife’s K Bank account had her income tax refunds and rebates from her private health fund paid into it.
Both parties received Centrelink pensions during the relationship. The husband also received a United Kingdom state pension (payable for life) which averaged about $50 per week during the parties’ relationship, and which had commenced in about 1999.
In 1997 the parties opened a joint CBA account. All Centrelink pension payments went into this account, together with Medicare rebates, the husband’s English pension payments, and dividends from the wife’s Company L shares (current market value about $4000). The husband operated this account, and withdrew cash to pay groceries and household supplies, including the payment of household bills. From about 2013 the husband gave the wife an allowance of $50 per week from this account. The wife used this amount to do mini shops and for personal expenses.
During the parties’ relationship, for certain periods, the parties’ children, including the wife’s son-in-law, assisted the parties in maintaining the Town A property. The husband’s son Mr A Bader was paid by the husband for his maintenance work about 25% of the time.
The wife worked in employment for the first few years of the parties’ relationship, with the wife retiring in about 1997.
The wife, but not the husband, gave oral evidence. The Court does not propose to set out the entirety of her oral evidence.
Legal principles: property
In Lotta & Lotta [2017] FamCA 50 Foster J stated:
The approach to the determination of an application under s 79 of the Act is set out in Stanford v Stanford [2012] HCA 52 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman [2014] FamCAFC 91 and Scott & Danton [2014] FamCAFC 203.
The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act.
In many cases this requirement is readily satisfied where the parties are no longer in a marital or defacto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here the wife seeks an order for adjustment of property and the husband contends that there should be no such adjustment.
It is thus important to ascertain the present property and resources of the parties so as to facilitate a consideration of the s 79(2) question.
In some circumstances it is not possible to determine whether it is just and equitable to make adjustment orders as to the parties present property rights without a consideration of s 79 (4) matters.
Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g) in particular the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant (s 79(4)(e)).
The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell [1999] FamCA 1875; (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.
The parties agreed balance sheet was as follows:
| No. | Description of Property | Value |
| 1. | B Street, Town A (W) Market Value, as per Valuation Report dated February 2019 | E$ 640,000 |
| 2. | Furniture and household contents (J) Market Value | E$ Nominal |
| 3. | Caravan (J) Market Value | E$ Nominal |
| 4. | Portfolio Investment in Company C (J) Current balance | E$ 57,000 |
| 5. | Company L Shares (W) Current market value | E$ 4,000 |
| 6. | K Bank account in husband's name (H) Current balance | E$ Closed |
| 7. | K Bank account in wife's name (W) Balance at separation | E$Nominal |
| 8. | CBA account in husband’s name (H) Current balance | E$Nominal |
| 9. | CBA account in wife’s name (W) Current balance | E$Nominal |
| Total Assets E$ 701,000 | ||
From the above, it can be seen that the parties’ net assets are $701,000 and the Court so finds.
Section 79 (2) of the Act
In Stanford v Stanford [2012] HCA, it was stated:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the Court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
The wife is the legal owner of the Town A property, and her Company L shares. The husband only has a joint interest in the Company C investment. The parties seek orders that this jointly owned asset be divided. Accordingly, it is just and equitable that there should be a distribution between them.
Contributions
The Court proposes to adopt a global approach.
The parties’ relationship was for about 23 years.
The wife brought into the relationship the Town A property, and the husband had the benefit of residing in that property for the length of the parties’ relationship. These were particularly significant contributions by the wife.
She also brought into the relationship those assets previously discussed, including savings of about $111,000.
The husband brought into the relationship those assets previously discussed, including his superannuation entitlements, $65,000, and the Suburb I property previously purchased for $72,000.
Again the husband’s superannuation entitlements were realised and the proceeds used to purchase the Company C investment.
As to the wife’s Company L shares, the shares were allocated to the wife following the demutualisation of the old NRMA Insurance. Those shares were allocated to the wife in consideration of the NRMA Insurance policies held by her.
During the parties’ relationship, each party utilised their income, savings and other monies (again, the wife had significant savings as at cohabitation, and she had received about $38,000 from the sale of the holiday house, and the husband had received monies from the sale of his Suburb I property), including their respective pensions, towards the parties’ living expenses, overseas trips, cash gifts to the husband’s children, the purchase of caravans, a motor vehicle, and outgoings on the Town A property.
The parties’ probably made approximately equal indirect financial contributions towards the conservation of the Town A property, through payment of the usual outgoings for this property from their joint CBA streamline account.
The parties’ non-financial contributions towards the conservation of the Town A property during the relationship were approximately equal. In this regard the Court refers, inter alia, to the parties’ individual housework and their children carrying out such work, usually for no reward, during the parties’ relationship.
The parties’ respective non-financial homemaker contributions were, on balance, approximately equal during the relationship. In this regard the Court has not overlooked the wife’s various adverse health issues during the marriage.
Post separation, the wife has caused to be paid the outgoings for the Town A property from her own monies and has maintained it.
Taking into account the above matters, and viewing the parties overall contributions holistically, the Court assesses the parties’ contributions as at trial date to be 85% to the wife, and 15% to the husband. That results in a disparity of about $490,700 in favour of the wife.
Section 75(2)
The husband is aged 86 years. The wife is aged 68 years.
The husband’s life expectancy, according to the Australian Bureau of Statistics’ Life Tables, NSW, 2015-2017, is about 5 years (as a whole number); see Exhibit C.
The husband has certain medical conditions, such as diabetes, controlled by medication. In his trial Affidavit he states that he feels his biggest health issue is his hearing. He states he can be forgetful at times. He believes himself to be very fit for his age and states that he is in rather good health.
The report of Dr M, forensic psychiatrist, dated 5 March 2019, refers to an assessment of the husband for testamentary capacity on the same date. Referring to the husband’s presentation, the doctor states that the husband has an age-related neurocognitive disorder, in the mild moderate category. He finds that the husband does not have testamentary capacity to participate in the Court case.
Consultant psychiatrist Dr E, at the request of the husband’s solicitors, examined the father on 16 May 2019. His report is dated 23 May 2019. The doctor provided a diagnosis of vascular dementia being a degenerative brain disease “that progresses slowly but inexorably”. The doctor states that the husband is likely to require the provision of community services to continue to live with his son in the short to medium term. It is stated that the husband may eventually require transfer to a residential aged care facility in the long term.
Dr N states that most people with dementia die from cardiac or respiratory problems, an average of seven years after diagnosis. He recommends that the husband’s treating GP refer him to a geriatrician for ongoing care.
In Dr N’s further report to the wife’s solicitors of 27 August 2019, he states that the condition, a neurodegenerative disorder, is associated with a relative loss of life expectancy. He stated that his earlier estimate of seven years was a very general approximation, based on his understanding of the literature which he uses in clinical practice. He states that he does not have the expertise to make a formal estimate of his life expectancy, and suggests a specialist in geriatric medicine in this context.
The report of the geriatrician, Dr G, qualified by the wife’s solicitors, is dated 16 September 2019. The Court admitted this report into evidence at the hearing. Dr G had been provided with, inter alia, the above medical reports and life tables. He was not cross-examined. The Court is of the view that his report was legally admissible because it was relevant, and the requirements for such admission as referred to in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at 743 were satisfied.
However, the Court does not accept this Doctor’s life expectancy estimates in relation to the husband. He did not examine the husband. His estimates were based upon, inter alia, implications, a lack of sufficiently supportive relevant evidence, and his mere suspicion of a functional rate of decline in the husband. He did not consult with Dr M or Dr N. His opinions expressed in the last 3 paragraphs of his report are not persuasive.
The wife’s life expectancy is about 19 years (whole figure) on the above life tables.
The wife has certain medical conditions. Inter alia, she has Type 2 diabetes which she has had for nearly 30 years. She is insulin-dependent. She had knee surgery in 2015. She gave oral evidence that she was not presently coping with her knee. There is no expert evidence relating to her knee. She asserts that she has failing eyesight.
Neither party has any work capacity. The parties were married for almost 23 years. At the date of cohabitation, the husband had retired. The wife retired from employment in about 1997. The duration of the parties’ relationship has not affected the earning capacity of either party.
The husband has been living with his son Mr B Bader and his wife, and their young child, aged about three years, since April 2018 at their two-bedroom apartment in Town H. The husband occupies one-bedroom, with his son, wife and child living in the main bedroom. The husband pays $150 for rent. He states in his trial Affidavit that he currently lives “with my son, until I am able to afford my own place to live.”
The husband asserts in his trial Affidavit that, “As I am 85 years old I anticipate in the future I will need to move into Aged Care living facilities, as I will require ongoing care as I age.” Again, the Court refers to Dr N’s opinion in this context. The Court observes that personally, the husband does not want to go into a nursing home, and in this regard the Court refers to the oral evidence of Mr A Bader, one of the husband’s sons. Further, in this context, the Court observes that, post separation, the husband had been offered an accommodation place at Aged Care Service O but he did not want to go there.
In the medical report of Dr N dated 23 May 2019, it is stated that the husband’s son Mr A Bader wishes to have the husband live with him for as long as possible.
The wife, for her part, wishes to live independently and to continue to live in the Town A property. There is no significant evidence that the wife could not comfortably live in more modest accommodation, such as a home unit, in her preferred area. The Court does not accept that the wife could not adapt to different accommodation in view of her vision problems in particular.
The wife has received financial assistance from her brother who pays her health fund premiums. He has also contributed to the wife’s medical expenses including surgery totalling about $40,000.
The parties’ respective income is comparable; the husband’s weekly income is $523 in the wife’s weekly income is $462. Each party is able to pay their weekly expenditure from their incomes, by reference to their respective Financial Statements. Both parties receive pensions.
The husband may potentially receive government assistance in relation to being accommodated in a residential aged care facility subject to his asset position. For example, if his assets are above about $168,000, he may well be liable to pay for the full cost of accommodation that any particular residential aged care facility requires. He may be liable to pay part of the accommodation costs if his assets are between about $49,000 and $168,000.
Taking into account the above matters, there should be no adjustment in favour of either party under s75(2).
Justice and equity
Pursuant to the Court’s contribution assessment, the husband should receive $105,150. The wife should receive $595,850.
The wife should be ordered to transfer her interest in the Company C investment to the husband; that will result in the husband owning such investment being presently valued at $57,000. The wife will be required to make a cash payment to the husband of $48,150. Failing any available financial assistance to the wife to make this cash payment, the Town A property will need to be sold. The wife should be given 10 weeks to make the cash payment to the husband.
The husband will continue to live with his son Mr B Bader. Should he need to find accommodation in a residential aged care facility, his asset position, by reference to the Court’s proposed orders, may well not require him to pay any particular significant accommodation fee at any proposed facility.
The Court is of the view that its proposed property adjustment Orders will represent a just and equitable property settlement between the parties.
I certify that the preceding sixty four (64) paragraphs are a true copy of the reasons for judgment of Judge Newbrun
Associate:
Date: 31 January 2020
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