Balcom and Balcom
[2009] FMCAfam 1361
•22 December 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BALCOM & BALCOM | [2009] FMCAfam 1361 |
| FAMILY LAW – Property – lengthy marriage – issue of add-backs – determination of small asset pool – s.72(2) factors where there is a disparity in earning ability. |
| Family Law Act 1975, ss.72(2), 79 |
| Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 |
| Applicant: | MS BALCOM |
| Respondent: | MR BALCOM |
| File Number: | WOC 1031 of 2008 |
| Judgment of: | Altobelli FM |
| Hearing date: | 27 October 2009 |
| Date of Last Submission: | 27 October 2009 |
| Delivered at: | Sydney |
| Delivered on: | 22 December 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Macpherson |
| Solicitors for the Applicant: | Heard McEwan Legal |
| The Respondent: | Self-Represented |
ORDERS
That the proceeds of the sale of the former matrimonial home at Property K following the distributions in Order 1 (a) and (b) made 27 October 2009 be distributed as follows:
(a)55 per cent to be paid to the Wife; and
(b)A further payment of $34,127 to be made to the Wife; and
(c)The balance to be paid to the Husband.
That as between the Husband and the Wife, and subject to the above orders, the Husband and Wife shall each respectively retain all interest in and entitlement to the following:
(a)All personal property now in their respective possession or control; and
(b)All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his or her sole name respectively; and
(c)All interests in life insurance policies and superannuation funds standing in his or her sole name respectively.
IT IS NOTED that publication of this judgment under the pseudonym Balcom & Balcom is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
WOC 1031 of 2008
| MS BALCOM |
Applicant
And
| MR BALCOM |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for alteration of property interests under section 79 of the Family Law Act commonly known as an application for property settlement. The applicant is the wife, and the respondent the husband. The wife is 62 years old and describes herself as a [occupation omitted]. The husband is 63 years old and describes himself as a [occupation omitted]. They commenced cohabitation in 1966, married [in] 1966 and separated in September 2008. There was, therefore, a period of cohabitation of 42 years. They have four adult children.
Background
In the wife’s application for property settlement, she seeks an order for sale of what is the former matrimonial home at Property K, a suburb in the Illawarra region of New South Wales. She asks for an order that she receive 50 per cent of the sale proceeds together with a further $46,000, and thereafter that the husband receive the balance. In the meanwhile, she asks that the husband, who currently occupies the former matrimonial home and has done so since separation, continue to pay the outgoings. She also seeks an order for super splitting of the husband’s superannuation so that she receives, in effect, $15,000. The wife’s application is supported by an affidavit.
In the husband’s response, he agrees to a number of the orders sought by the wife, including orders for the sale of the property. He asks that he continue to reside in the home pending the final order and the sale of the property. He asks for 50 per cent of the sale proceeds, together with a further $7,500 in his favour, and that the wife receive the balance. He then proposes that there be a super split equally as between the parties respective superannuation funds. The wife was represented by her solicitor throughout the course of this matter, and then her counsel, Mr McPherson, at the hearing. The husband represented himself in these proceedings, including at the final hearings.
A number of issues emerged during the course of the hearing and from the evidence filed by the parties. It was acknowledged and agreed between the parties that contribution would be assessed as equal up until the date of separation. That is not surprising, given the length of the period of cohabitation of the parties. There is a dispute between the parties about the assessment of matters arising under s.75(2) of the Family Law Act 1975. The wife seeks an adjustment in her favour of 15 per cent, and the husband says that no adjustment is necessary. There are a number of balance sheet issues, if I may so describe them, that arise out of the evidence and the submissions made by the counsel for the wife and by the husband.
Both parties raised, in their own ways, whether there should be an add-back of moneys held at the date of separation, but which no longer exist at the time of the hearing. Initially, the wife’s claim proceeded on the basis that $46,000 should be added back, but by the time of the hearing itself, it was conceded that following a close examination of banking records, that any add back should be limited to $6,500. The husband’s case also initially proceeded on the basis that there should be an add-back of funds so that he received an extra $7,500. I must say that by the end of the hearing, the claims for add back in this regard made by each party could not be substantiated by the evidence that they presented before me. I therefore decline to make them.
A balance sheet issue arises from the fact that the wife used some of the moneys available to her at separation to acquire an interest in a property in Property W, another suburb of Wollongong. The wife says that the amount of her interest in this property is $41,000, and she agrees that that should be included in the balance sheet. The husband says that the wife’s contribution to this property was significantly greater, and that that higher amount should be included in the balance sheet. I will need to make findings in this regard. There are also a number of other minor issues about what should be included in the balance sheet, and at what value.
The husband did the best he could under the circumstances to represent himself as a self-represented litigant. It is unfortunate, however, that he choose to do so in circumstances where he clearly could afford legal representation. The matter could have and should have settled at a much earlier stage had the lines of communication been open and clearer, and not cluttered and distracted by emotional and irrelevant issues. Nonetheless, the husband was at all times entitled to be represented and exercised his right not to do so.
Applicable Law
The preferred approach to the determination of an application under s.79 of the Family Law Act is set out in a passage found in the Full Court’s decision in Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at 39.
The Full Court states that there are four inter-related steps:
a)Identify and value the property, liabilities and financial resources of the parties; and
b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
Issues in Relation to the Balance Sheet
Counsel for the wife presented a draft balance sheet, which I reproduce below:
Non-Superannuation Assets
Value
A
Credit Unions Australia eSaver Account (W)
$6,800
B
Credit Union Australia Prime Access Account (W)
$1,200
C
Credit Union Australia Accounts (H)
E$60,000
D
Illawarra Credit Union Access Account (H)
E$1,300
E
Former Matrimonial Home at Property K
$420,000
F
Wife’s share of property at Property W
$41,000
G
51 TABCORP shares (H)
E $350
H
Wife’s 1992 Toyota Corolla
$2,250
I
Furniture and contents (W)
$1,520
J
Furniture and contents (H)
$4,075
K
AMP Life Insurance Policy (H)
$11,680
L
Husband’s Hiace Van
$1,000
Total Non-Superannuation Assets:
$551,175
Superannuation
M
Hesta Superannuation (W)
$32,000
N
Australian Super (H)
$55,000
Total Superannuation Assets:
$87,000
TOTAL ASSETS:
$638,175
The husband was not able to provide a balance sheet, but in response to my question was able to indicate his views about a number of the items that were otherwise in dispute. The husband agrees to items D, G, H, K, M and N. In relation to items A and B the husband says that he does not know the value. I accept that these figures are correct, that is, as asserted by counsel for the wife in the absence of any contrary evidence or counter assertion. The husband says that item C should be $56,000, but in his own financial statement, total savings amount to $58,000 and I think, under the circumstances, between the husband’s financial statement and the documents produced on subpoena by the credit union I can safely find that item C should be $58,000 and I accordingly adopt that figure.
The husband says that item E, being the former matrimonial home, is valued in the range of $400,000 to $420,000. The balance sheet submitted by counsel states $420,000. He agreed during the course of the proceedings that it should be sold. Given that concession the outcome will be expressed in terms of a percentage of the net sale proceeds, and I can then control for any variables to the final sale price. I can thus control for any variation to the final sale price. For present purposes I will retain it in the pool at $420,000. With item F the wife concedes an interest in the Property W property, co-owned with her daughter in the sum of $41,000, which is the amount that she says she contributed. The evidence that I have seen from the wife, and indeed from her daughter, is consistent with this amount. The husband asserted a much greater figure and indeed he said that he would lead contrary evidence about this. He did not. The wife’s evidence remained unchallenged and I have accepted the same.
I must record that the application for finance submitted by the wife’s daughter and the wife to the credit union in order to purchase the property at Property W, could easily have led the husband to believe that the amount that the wife contributed was significantly greater than the $41,000. However, when one reads the credit union loan application with a more objective eye, one sees that representations may have been made about the total amount of savings that the wife had at the time that the loan application was made. Indeed, it’s even possible that the amount represented was exaggerated somewhat. It would certainly not be the first time that that has occurred in the context of family law proceedings.
However, the issue is not that which the wife represented to the credit union at the time of the loan application, but how much was actually applied towards the purchase of the Property W property, and on this basis, as I’ve indicated before, both the wife’s evidence and her daughter’s evidence confirms that she contributed $41,000 and that her interest in that property should be quantified at that figure, particularly given the fact that it was purchased so recently.
The husband does not disagree with the values of the items at I and J, but asserts that there was other furniture and contents that the wife took from the property, and which are not found on the balance sheet. The wife asserts in this regard that it was her daughter’s furniture that was removed and indeed was not available for valuation, and she gives the example of a dishwasher. The onus of proof was always on the husband to establish to me, on the balance of probabilities, that there is other undisclosed furniture or contents that belongs to the husband or the wife. He has failed to discharge the onus of proof. I observe that if there is undisclosed furniture and contents it must, on the facts of this case, have negligible value and would not in any event have impacted upon the outcome of this case.
The husband says, in relation to item L, his Hiace van, that it is valued at $500 as opposed to the $1,000 asserted by the wife. However, there is a valuation of Mr M, dated 26 May 2009 that attributes a value of $1,000, and accordingly I prefer to accept that expert evidence. As I’ve indicated before, both the husband and the wife asserted that there should be add-backs of additional funds, but neither was able to convince me, by way of cogent evidence, that any further monies should be added back. Insofar as both parties asserted that there were changes in the monies that were held at the date of separation compared to the date of the hearing, I note that both of them had to live during this period and it would not have been improper for reasonable amounts to be used for this purpose. Having regard to the matters that I’ve stated above, I find the final balance sheet in this case to be as follows:
Non-Superannuation Assets
Value
A
Credit Unions Australia eSaver Account (W)
$6,800
B
Credit Union Australia Prime Access Account (W)
$1,200
C
Credit Union Australia Accounts (H)
$58,000
D
Illawarra Credit Union Access Account (H)
E$1,300
E
Former Matrimonial Home at Property K
$420,000
F
Wife’s share of property at Property W
$41,000
G
51 TABCORP shares (H)
E $350
H
Wife’s 1992 Toyota Corolla
$2,250
I
Furniture and contents (W)
$1,520
J
Furniture and contents (H)
$4,075
K
AMP Life Insurance Policy (H)
$11,680
L
Husband’s Hiace Van
$1,000
Total Non-Superannuation Assets:
$549,175
Superannuation
M
Hesta Superannuation (W)
$32,000
N
Australian Super (H)
$55,000
Total Superannuation Assets:
$87,000
TOTAL ASSETS:
$636,175
This means that the total non superannuation assets are $549,175. Total superannuation assets amount to $87,000 and the total superannuation and non-superannuation asset pool amounts to $636,175. There are no relevant liabilities of the parties.
Contribution
The parties conceded that after a period of cohabitation of 42 years that a finding of equality of contribution was just and equitable in the circumstances. I entirely agree with this, and accordingly I assess contribution at fifty-fifty.
Adjustment under s.75(2)
The husband asserts that there should be no adjustment of a s.75(2) nature. The wife asserts that there should be an adjustment of 15 per cent in her favour, mainly on the basis that there is such a disparity in the income of the husband and the wife. The husband denied that there was a disparity in income. The evidence about the husband’s and the wife’s income was plentiful but, I note, only emerged at the hearing itself. There is no doubt that the husband’s income from all sources in recent years has been in the vicinity of $50,000. There is equally no doubt that the wife’s income from all sources over the last few years, has been in the vicinity of $20,000 to $23,000, including the income paid to her, as well as the reportable fringe benefits that she receives in the context of working for a charitable organisation.
The husband was convinced, from the documents that he had inspected, that the wife’s income was considerably greater and, in fact, almost the same as his. He submitted that on this basis there should be no adjustment under section 75(2). I can understand why on a reading of the documents, the husband might think that his wife’s income was comparable to his, but, again, when a more objective eye is cast over the evidence one sees that the fringe benefits tax figure that the husband relied on in support of his assertion that his wife had a comparable income to his, was in fact a cumulative figure and not the figure which represents fringe benefit earned in a particular financial year. In other words, the figure that the husband was relying on from the records of the wife’s employer is quite misleading, because it carries forward fringe benefits from previous years. Again this is an example of a situation where if the husband had been represented, in all likelihood this obvious discrepancy would have been rectified and might have contributed to a more reasoned approach.
Notwithstanding the above, the wife’s claim for 15 per cent is hard to understand in the context of this case. It can hardly be said that the husband is on a high income, though it is clearly the case that he earns at least twice that of the wife. Both of these parties are of advanced years. Both have a limited working life left to them. The wife will have a roof over her head, as a result of the availability to her of the Property W property. As it is agreed that the former matrimonial home will be sold, the husband will be left in a position where he has to re‑accommodate himself. It can hardly be said that the superannuation entitlements of either the husband or wife are so great as to create significant disparities between them. In the circumstances of this case I must say I find it difficult to see how a claim of 15 per cent could be made.
However, I agree that an adjustment of 5 per cent in favour of the wife is appropriate in circumstances where the husband is earning greater than her and where the pool of assets is such a modest one. Accordingly, I will allow the wife an adjustment of 5 per cent under section 75(2) of the Act.
Conclusion about Assessment of Contribution and Future Needs
Having regard to the matters set out above, this means that the wife would be entitled to 55 per cent and the husband 45 per cent. This means that the wife will receive total assets of $349,896, and the husband, $286,278. However, I need to consider the possibility that when the former matrimonial home is sold (and in this regard I made interim consent orders when this matter was heard) that the sale price will be either higher or lower than the figure in the balance sheet. Accordingly, in working out adjustments between the husband and the wife, I propose to take the value of the home in the balance sheet out of the equation, so to speak, and simply divide the net sale proceeds having regard to the percentage I have allocated.
When the value of the home is taken out of the pool, this leaves a net pool of $216,175. The wife would be entitled to 55 per cent of this, or $118,896. The husband would be entitled to 45 per cent, or $97,278. The husband has the following assets:
C
Credit Union Australia Accounts (H)
$58,000
D
Illawarra Credit Union Access Account (H)
E$1,300
G
51 TABCORP shares (H)
E$350
J
Furniture and contents (H)
$4,075
K
AMP Life Insurance Policy (H)
$11,680
L
Husband’s Hiace Van
$1,000
N
Australian Super (H)
$55,000
TOTAL ASSETS (HUSBAND):
$131,405
The husband, of course, is entitled to $97,278, meaning that an adjustment needs to be made in favour of the wife out of his proceeds of sale of the home, in the sum of $34,127.
From the wife’s perspective she receives:
A
Credit Unions Australia eSaver Account (W)
$6,800
B
Credit Union Australia Prime Access Account (W)
$1,200
F
Wife’s share of property at Property W
$41,000
H
Wife’s 1992 Toyota Corolla
$2,250
I
Furniture and contents (W)
$1,520
M
Hesta Superannuation (W)
$32,000
TOTAL ASSETS (WIFE):
$84,770
When the payment from the husband of $34,127 is added to this, it takes her entitlement up to $118,897.
Just and Equitable
If I were to make orders to give effect to the matters set out above, would this be just and equitable under the circumstances of this case? I think the answer is clearly, yes. When one has regard to the age of these parties and to the relatively small asset pool that is available to them, the outcome of the property settlement will provide the husband with a sum of money that enables him to re-establish himself, albeit in a modest way. The same applies to the wife. Each have relatively modest sums of superannuation available to them when and if they choose to retire. Accordingly, the effect of the orders I will make is for the former matrimonial home to be sold and after deduction of the expenses of sale for the wife to receive 55 per cent of the net sale proceeds, and then for the wife to receive $34,127, and then for the balance to be paid to the husband. Each of the husband and the wife otherwise retain the items in their possession or control.
I certify that the preceding twenty-nine (28) paragraphs are a true copy of the reasons for judgment of Altobelli FM
Associate: Monique Robb
Date: 21 December 2009
0
0
1