Barrese & Arrico
[2022] FedCFamC2F 1023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Barrese & Arrico [2022] FedCFamC2F 1023
File number(s): DGC 1952 of 2020 Judgment of: JUDGE BOYMAL Date of judgment: 5 August 2022 Catchwords: FAMILY LAW – Property – short relationship – modest asset pool – assessment of contributions – wastage caused by gambling – ownership of dog Legislation: Evidence Act 1995 (Cth) s 140
Family Law Act 1975 (Cth) ss 90SF(3), 90SM(3), 90SM(4)(d)–(g)
Cases cited: Bevan & Bevan [2013] FamCAFC 116
C & C (2006) FLC 93-269
Dagher & Batarseh [2017] FCCA 316
Dickons & Dickons [2012] FamCAFC 154
Jabour & Jabour [2019] FamCAFC 78
Kowaliw and Kowaliw [1981] FamCA 70
Stanford & Stanford (2012) 247 CLR 108
Trevi & Trevi [2018] FAmCAFC 173
Division: Division 2 Family Law Number of paragraphs: 119 Date of hearing: 7 December 2021 Place: Dandenong Counsel for the Applicant: Mr Smith Solicitor for the Applicant: Andrews Legal Group Pty Ltd Counsel for the Respondent: Ms Taylor Solicitor for the Respondent: Duffy and Simon ORDERS
DGC 1952 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS BARRESE
Applicant
AND: MR ARRICO
Respondent
order made by:
JUDGE BOYMAL
DATE OF ORDER:
5 AUGUST 2022
THE COURT ORDERS THAT:
1.Within 7 days the proceeds of sale of B Street, Suburb C, held by Duffy and Simon be applied as follows:
(a)First as to $7,004.00 to the wife;
(b)Secondly the balance then remaining to be divided in the proportion of:
(i)89 percent to the wife; and
(ii)11 percent to the husband.
2.The wife discharge the loan to D Bank as soon as practicable.
3.The wife sign all such documents to transfer the registration of the Motor Vehicle 1 to the husband.
4.The husband sign all such documents and do all such acts and things at his expense to transfer the registration of the Motor Vehicle 1 into his name and notify the wife forthwith upon the registration being changed.
5.The husband retain for his sole use and benefit the Motor Vehicle 1.
6.The husband indemnify the wife against any liability she may incur or may have already incurred in relation to the Motor Vehicle 1 including by the use of the vehicle by any third party, purported purchaser or purchaser, with those liabilities to include vehicle fines, tollway authority fines and any associated legal fees.
7.The wife retain for her sole use and benefit the Motor Vehicle 2.
8.The wife retain the dog to the exclusion of the husband.
9.Unless otherwise specified in these orders and save for the purposes of enforcing the payment of any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) in the possession of such party as at the date of these orders;
(b)furniture, personal possessions and like chattels presently in the possession of the parties remain in their possession; and
(c)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.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BOYMAL
These are property proceedings between the applicant wife and respondent husband arising from the breakdown of their de facto relationship.
The major asset required to be adjusted is the proceeds of sale of the parties’ home in the sum of $146,826.00 held by the husband’s solicitor. Of no less significance to the parties, albeit not in monetary terms, is whether the dog shall be retained by the husband or the wife.
For the following reasons orders are made including:
(a)that the proceeds of sale be distributed as to 89 percent to the wife and 11 percent to the husband; and
(b)that the wife retain the dog.
BACKGROUND
The parties began their relationship in 2009 when the wife was around 19 years of age and the husband around 20 years of age. They commenced living together in 2014/2015. It was a short relationship of somewhere between four and five years. They commenced living together in the home of the wife’s parents.
In or around 2015 a block of land at B Street, Suburb C was purchased in the wife’s sole name for $190,000.00. It was purchased by way of $60,000.00 of savings accumulated by the wife, the first homebuyer’s grant obtained by the wife and a mortgage in the wife’s sole name in the sum of $160,000.00. The purchase and the mortgage were taken out in the wife’s name as at the time the husband already had a number of credit rating issues.
The husband’s father Mr E is a tradesman. His company was commissioned to undertake the construction of the parties’ home on B Street, Suburb C. The wife and Mr E’s company entered into a Building Contract in 2017, the contract price being approximately $250,000.00 inclusive of GST in the sum of $25,400.00. The wife rolled over the mortgage on the land to pay for the construction of the home. At the time of sale the mortgage was around $420,000.00.
The parties began living at Suburb C in October 2017. The parties acquired the dog in 2017.
During the relationship the husband gambled excessively. He also used illicit substances. The husband told the Court that he used illicit drugs and that $200.00 worth might last him a day, that he may spend that amount on consecutive days and that sometimes he was given the drug for free.
The wife asserts that during the last months of the relationship the husband’s behaviour became increasingly aggressive, violent and paranoid. There were several instances of family violence during the relationship, often taking the form of intentionally destroying property, namely on Suburb C, repeated derogatory taunts and disposal of finances by the husband. The husband admits to causing “some damage to a few of the walls”.[1] The husband’s defence that “[Ms Barrese] was never home when this occurred”[2] does not excuse the husband’s behaviour or that his conduct did not amount to family violence.
[1] Husband’s Affidavit filed 17 August 2020, paragraph 24.
[2] Ibid, paragraph 24.
The parties separated in October 2019 following an incident of family violence. In December 2019 an Intervention Order was taken out by police against the husband for the protection of the wife.
In or around late 2019 the husband was found guilty of offences. During the course of his employment the husband had used customers’ money to subsidise his gambling. He served some time in prison and was released in 2020.
It was decided to sell Suburb C and in early 2020 it sold for approximately $500,000.00.
Prior to the sale, work was undertaken on Suburb C by the wife and her family, Mr E and other members of the husband’s family. The work was undertaken to repair damage caused by the husband on Suburb C and otherwise prepare it for sale.
The wife initiated these proceedings on 17 June 2020 in order to affect settlement of the sale of Suburb C.
During the relationship the parties acquired Motor Vehicle 1. Motor Vehicle 1 was used by the husband however it was registered to the wife. The loan obtained from D Bank to purchase Motor Vehicle 1 was taken out in the wife’s name.
On 25 August 2020 an order was made requiring the husband to make all instalments due on the loan from D Bank associated with Motor Vehicle 1 as and when they fell due.
The matter was listed for a one day final hearing to proceed on 24 February 2021 but was not reached on that day. Orders were made providing for the exchange of documentation relating to online gaming accounts of each of the parties. The matter was relisted for final hearing on 13 October 2021.
In mid-2021 the wife was informed by Victoria Police that the husband had sold Motor Vehicle 1. The wife reported Motor Vehicle 1 stolen and was subsequently contacted by the purchaser who bought Motor Vehicle 1 from the husband. The purchaser provided proof of purchase to Victoria Police and to the best of the wife’s knowledge, that purchaser has retained Motor Vehicle 1.
The loan on Motor Vehicle 1 to D Bank remains outstanding.
The dog remained in the care of the wife at separation. The husband has on at least two occasions tried to retrieve the dog from the wife’s possession. In mid-2021 the husband was arrested for breaking into the wife’s home and taking the dog. He was sentenced to prison for a few months.
As a consequence of the global pandemic, Court protocols and government restrictions the matter could not proceed in person at court on 14 October 2021. The final hearing was required to be adjourned as at that time the husband was incarcerated and the correctional centre did not have the necessary video conferencing facilities to enable the matter to proceed on the Microsoft Teams platform.
THE HEARING
The final hearing was adjourned to 7 December 2021. The husband had been released from jail in late 2021. The hearing proceeded on 7 December 2021 on Microsoft Teams. Both parties were represented by Counsel.
The wife
The wife seeks:
(a)that she retain the whole of the net proceeds of sale of B Street, Suburb C after the D Bank Loan is discharged;
(b)that the husband indemnify her for any liabilities she may incur or has already incurred in relation to Motor Vehicle 1; and
(c)that she retain the dog.
The wife filed an Amended Outline of Case on 3 December 2021. The wife gave evidence and was cross-examined. She relies on her affidavits filed on 25 November 2021 and 3 December 2021 and her financial statement filed on 3 December 2021. Counsel for the wife tendered several exhibits.
The wife was an impressive witness. She was forthcoming in her evidence, articulate, insightful and responsive. I regard her as a truthful witness. She became visibly upset when cross-examined in relation to the family violence.
The husband
The husband seeks:
(a)that the net proceeds of sale be applied as to 50 percent to the wife and 50 percent to him;
(a)that Motor Vehicle 1 be transferred into his named and that he discharge the liability to D Bank; and
(b)that he retain the dog;
The husband filed an Outline of Case on 2 December 2021. The husband gave evidence and was cross-examined. He relies upon his affidavits filed on 17 August 2020 and 29 September 2021 and his financial statement filed on 17 August 2020. Counsel for the husband tendered several exhibits.
The husband has a raft of criminal convictions in addition to those for which he has served two terms of imprisonment to which have already been referred. His criminal record dating back to 2015 includes drug-related offences, driving offences and family violence offences.
The husband was not an impressive witness. Where the evidence of the husband and wife is in conflict I prefer the evidence of the wife. The reliability of the husband’s evidence is in question. The husband has been imprisoned for dishonesty offences. Effective cross‑examination by Counsel for the wife evinced from the husband that he first denied matters but when pushed later admitted them.
Mr E
Mr E gave evidence on behalf of the husband and was cross-examined. He relies on his affidavit filed on 29 September 2021. While the husband was incarcerated Mr E acted on behalf of the husband pursuant to an Enduring Power of Attorney. Mr E engaged in discussions with the wife in relation to the distribution of the proceeds of sale and the payment of additional work on Suburb C.
The Court is not required to refer to every piece of evidence relied upon by the parties, traverse every argument that is advanced or make findings in relation to all of the facts that are put in issue by them. I have read all of the documents relied upon and taken all of the evidence and submissions into account. Findings are made on the balance of probabilities and have regard to the nature of the subject matter of the proceedings and the gravity of the matters alleged.[3] My observations of the demeanour of the parties have assisted my assessment of the evidence.
[3] Evidence Act 1995 (Cth) s 140.
Approach to alteration of property interests
The Court must be satisfied that in all of the circumstances it is just and equitable to make an order altering the parties’ property.[4]
[4] Stanford & Stanford (2012) 247 CLR 108.
The preferred approach when determining what orders should be made is for the Court to:
(a)identify and attribute Motor Vehicle 1’s value to the existing legal and equitable interests of the parties at the time of the hearing (the asset pool);
(b)take into account the contributions made by the parties financially and non-financially to the property directly or indirectly to the acquisition, conservation and improvement of the property and to the welfare of the family including in the capacity of homemaker and parent in accordance with section 90SM(4)(a)-(c);
(c)consider whether there should be any further adjustment having regard to the matters contained in section s90SM(4)(d)-(g) which includes any relevant factors in section s90SF(3) often referred to as future considerations ; and
(d)undertake an assessment whether the proposed adjustment provides justice and equity to the parties.[5]
[5] Ibid; Bevan & Bevan [2013] FamCAFC 116.
THE ASSET POOL
The following assets and liabilities were identified by the wife and husband:
ASSETS Ownership Value Proceeds of sale from B Street, Suburb C Wife $146,826.00 Motor Vehicle 1 Husband Wife: $17,575.00
Husband: $10,000.00The dog Wife Wife: $500.00 Husband’s gambling addback Husband Wife: $141,700.00
Husband: nilHusband’s cash withdrawals addback Husband Wife: $55,000.00
Husband: nilMotor Vehicle 2 Wife $8,000.00 Wife’s bank account Wife $16,000.00 Husband’s bank account Husband Nominal Total Assets Wife: $385,601.00
Husband: $156,826.00LIABILITIES Ownership Value wife D Bank loan Wife $7,004.00 Non-superannuation assets Ownership Value wife: $378,597.00
Value Husband: $149.822Superannuation Ownership Value wife Super Fund 1 Wife $77,372.00 Super Fund 2 Husband $13,340.00 Adjustments to the asset pool
The wife purchased the Motor Vehicle 2 with savings accrued by her post separation. It is excluded from the asset pool.
The wife accumulated her savings post separation. Both parties’ bank accounts are excluded from the asset pool.
Gambling and cash withdrawals
The husband concedes that the sum of $141,700.00 was spent by him on on-line gambling sites. The husband told the Court that he does not know whether most of $55,000.00 in cash withdrawals by him was spent subsidising his gambling. I accept that the husband spent some small sum of the $55,000.00 on expenses including his lunches, cigarettes and maybe on some groceries. The amount so spent is not quantifiable however I am of the view that the majority of the $55,000.00 was spent by him on gambling and his purchase of illicit substances. The husband’s gambling was clearly a problem. In a six-year period his parents had given the husband $300,000.00 which was all gambled away by him.
It is disingenuous to suggest that the husband quarantined his earnings from employment during the relationship from the money provided to him by his parents and that he only dissipated the money from his parents on gambling but otherwise used his earnings.
The wife seeks that the sums of $141,700.00 and $55,000.00 be “added back” to the property pool available to be adjusted between the parties and that the husband be credited with having received those sums. Alternatively she seeks that the sums be taken into account pursuant to section 90SF(3)(r) as “wastage” by the husband.
Generally the Court is to take the property of the parties as it finds it at trial. Notionally adding back assets into the pool is the exception rather than the rule. Adding back is a discretionary exercise. When the discretion is exercised in favour of adding back, it reflects a decision that exceptionally in the particular circumstances of a case justice and equity requires it. In cases that are not exceptional, justice and equity can be achieved not by adding back but by the exercise of discretion pursuant to sections 75(2)(o) or 90SF(3)(r) of the Act.[6]
[6] Trevi & Trevi [2018] FAmCAFC 173 at [27]-[30].
In Kowaliw and Kowaliw [1981] FamCA 70, a case also involving gambling, Baker J was of the view that the conduct of a party who has acted recklessly, negligently, or wantonly with matrimonial assets and which the overall effect has economic consequences is relevant under section 75(2)(o).
In this matter the Court cannot quantify the amount of earnings from employment the husband wasted on gambling rather than using it for the benefit of the parties. There is no correlation between the sums asserted by the wife that should be added back and the total of the husband’s earnings which he wasted. All the Court knows is that the husband’s parents gave him $300,000.00 which he gambled away, that $141,700.00 was gambled away on on-line sites and most of $55,000.00 was wasted in a similar way. There is no certain identifiable sum that can be added back to the pool.
However, given the extent of the husband’s gambling I am of the view that in order to achieve justice and equity between the parties that his waste of income on gambling should be considered pursuant to section 90SF(3)(r) of the Act.
Accordingly the addbacks asserted by the wife are not included in the asset pool available for adjustment between the parties.
The dog
The law requires the Court to deal with the dog as a chattel and ownership is determined as an issue of property. The Court acknowledges the significant sentimental value pets bring to our lives and that this is a serious issue for the husband and wife.
The wife asserts that the dog was purchased for $500.00. The husband asserts the purchase price was $1,000.00. There is no evidence before the Court in relation to the present value of the dog in monetary terms. The value of the dog to the parties is much more than his purchase price or present day monetary value and that value is immeasurable in dollars.
I accordingly do not include the dog in the asset pool.
The Motor Vehicle 1
Notwithstanding the husband has previously asserted that Motor Vehicle 1 was confiscated from him by police,[7] he told the Court that Motor Vehicle 1 is in the possession of his “mate” and that the “mate” has not yet paid him for Motor Vehicle 1. The husband intends to sell Motor Vehicle 1 to his “mate” for $12,000.00 as “the car’s got problems”.[8] The husband is waiting to know the outcome of these proceedings before Motor Vehicle 1 is transferred to his “mate” as Motor Vehicle 1 needs to be in the husband’s name before it can be so transferred.
[7] Husband’s affidavit filed 29 September 2021, paragraph 6.
[8] Transcript 7 December 2021, p.66.
The first the wife knew of the impending sale of the Motor Vehicle 1 to the “mate” was when the husband gave this evidence. The value attributed to the Motor Vehicle 1 by the wife is a Red Book value. The husband says that as the Motor Vehicle 1 has done more mileage than the Red Book value, the Red Book value is too high. He also says that the head gasket blew after his release from jail which was after Mr E had already paid for repairs. The husband’s “mate” is fixing Motor Vehicle 1. At the time of the hearing the husband did not have a driver’s licence.
I am of the view that the value ascribed by the wife to the parties’ Motor Vehicle 1 is inflated. I accept the husband’s evidence that Motor Vehicle 1 will be sold for less than the Red Book value because it has done more mileage and is not running. Motor Vehicle 1 is in the asset pool at $12,000.00.
The non-superannuation asset pool, excluding the dog, is accordingly:
Assets Ownership Value Proceeds of sale Joint $146,826.00 Motor Vehicle 1 Husband $12,000.00 Total Assets $158,826.00 Liabilities Value D Bank Wife $7,004.00 Net assets $151,822.00 Superannuation
The parties agreed at the hearing that each of them would retain their superannuation. The husband has withdrawn $20,000.00 from his superannuation account. I propose in those circumstance to use a two asset pool approach, a superannuation pool and a non-superannuation pool.
Should orders altering property interests be made?
I am satisfied that it is just and equitable to make an order pursuant to section 90SM(3). Both parties seek an adjustment of their property and wish to put an end to their financial relationship. The parties no longer wish to have the common use of the proceeds of sale of B Street, Suburb C which derives its existence from contributions made by and on behalf of the wife and on behalf of the husband.
CONTRIBUTIONS
By the wife and on her behalf
The wife’s parents provided rent free accommodation to the parties for two to three years between 2014 and 2017. The wife worked whilst undertaking her university studies and her savings accrued prior to the parties living together were used for the deposit on Suburb C. Plainly she was able to add to those savings whilst the parties lived rent free with her parents. The Court is not able to quantify the amount of her pre-cohabitation savings or the amount she accrued between the commencement of cohabitation and the purchase of the land at Suburb C. In any event, the parties were relieved from paying any accommodation expenses for some two to three years. That is a significant contribution made on behalf of the wife by her parents. I accept that the wife’s parents provided some meals and groceries to the parties.
At the time of cohabitation the wife owned a car. She was employed as a community worker. She had commenced full time employment in her discipline in 2012. Her tax assessments for the years 2014 to 2020 show an incremental increase in taxable income from $50,742.00 to $83,859.00. I am satisfied that her income save for only a very comparatively small amount was expended by her for the mutual benefit of the parties.
The wife paid the mortgage on Suburb C between the purchase of the land and its sale. I am satisfied that she paid the utilities, rates and insurances on Suburb C and that she paid by far the majority of groceries and other living expenses of the parties. I am also satisfied that she undertook the majority of homemaker responsibilities.
The wife has paid the loan repayments of $137.50 per week on Motor Vehicle 1 since Mr E stopped paying. She has done so in order to protect her credit rating. At the time of the hearing she had paid over $11,000.00 in loan payments. She continues to pay insurance on Motor Vehicle 1 and at the time of the final hearing had paid $2,400.00. The wife has paid for an asset of which she has had no use or derived no benefit for over two years.
The husband attempted the sell Motor Vehicle 1 in or around July 2019 for $10,000.00. The purchaser was related to a friend of the wife. The purchaser paid the husband the sum of $2,000.00 for Motor Vehicle 1. The sale fell through. I accept the wife’s evidence that as the husband retained the money she repaid the relative the sum of $2,000.00.
By the husband
At the time of cohabitation the husband was an apprentice in one trade. He is now a tradesman in another trade. He brought a vehicle into the relationship. I accept that he may have supplied timber and plaster and other materials including an oven to fit out the space in which the parties lived on the property of the wife’s parents. In my view that is a relatively small contribution by the husband in return for between two and three years of free accommodation provided by the wife’s parents and I note that the supplies were used for the parties’ benefit.
The husband’s income during the relationship is not known save for the financial year ending 2017 when his taxable income was $24,633.00. For the year 2020 his taxable income was $11,321.00, but it is noted that during that year he spent many months in jail. I have canvassed the level of his gambling and expressed the view that he would not have quarantined his income from employment during the relationship from his gambling. I am satisfied that the husband expended only a small amount of his income from paid employment for the benefit of both of the parties, the majority of it being spent on his personal reckless activities of excessive gambling and drug use.
I accept that the husband made the lease payments on Motor Vehicle 1 until he was incarcerated.
By the husband’s family
The husband’s parents paid the loan repayments on Motor Vehicle 1 from December 2019 to March 2020 and were reimbursed the sum of $6,216.00 from the proceeds of sale at settlement which includes reimbursement for loan payments, registration and repairs. I consider that the repayment negates any contention that the money paid by the husband’s parents was a form of any other contribution by the husband’s family on behalf of the husband to be taken into account when assessing contributions.
Mr E maintains that in total the husband and the Arrico family have contributed $87,475.00 to Suburb C,[9] which includes $50,000.00 foregoing of profit. Mr E built the house at Suburb C at cost with no labour/profit margin. I note that Mr E says that the profit not charged was in excess of $50,000 and that foregoing the profit was the husband’s contribution to Suburb C as the wife had paid the deposit.[10]
[9] Mr E’s Affidavit filed 29 September 2021, paragraph 10.
[10] Ibid, paragraph 4.
The sum of $14,602.00 for works undertaken by Mr E for either repair works to damage to the property caused by the husband or for otherwise preparing the property for sale was repaid to Mr E from the proceeds of sale. I consider that the repayment negates any contention that the money Mr E expended on the works was a form of any other contribution by the husband’s family on behalf of the husband to be taken into account when assessing contributions.
On Mr E’s figures that leaves about $22,873.00 that Mr E ascribes in monetary terms to contributions made by the husband or his family. Counsel for the husband puts the figure at $36,500.00. In my view the difference is immaterial. Notably Mr E’s figure (and Counsel’s) includes a sum of $9,525.00 which Mr E puts as his labour costs. Again it is acknowledged by Mr E that labour was not charged but was foregone. It was to be viewed as the husband’s contribution to household expenses. I accept that the husband’s brother did trades works at cost and that the husband’s uncle did a work at a discounted rate.
Mr E expresses disappointment at the lack of effort put in by the Barrese family readying Suburb C for sale as opposed to the work put in by the Arrico family and that in his view the wife did very little, if anything. Unsurprisingly the wife denies that she did little or that her family did not assist. I accept the wife’s evidence of what work she and her family undertook.
I do not propose to delve into the minutiae of who did what work or whether work was done because of damage caused by the husband or to rectify his unsatisfactory work. Nor do I propose to traverse whether or not the husband passed on money to Mr E that was given to the husband by the wife to pay his father for some works. I am satisfied that the wife, members of her family, and members of the Arrico family did all things necessary and within their areas of expertise to repair the property and otherwise ready Suburb C for sale.
The dog
The wife seeks to retain the dog and the husband seeks to retain the dog.
The wife’s evidence is that she purchased the dog in mid-2017 for $500.00.[11] In late 2017 she paid $438.00 to have the dog de-sexed.[12] She pays the annual Council registration, which is in her name, of $43.05.[13] The dog attends the vet four to six times per year and she pays for these appointments.[14] She buys all the dog’s food and toys. The dog has remained in her care since separation.
[11] Wife’s affidavit filed on 3 December 2021, paragraph 3.
[12] Ibid, paragraph 6.
[13] Ibid, paragraph 5.
[14] Ibid, paragraph 7.
The husband’s evidence is that he purchased the dog from a friend for $1,000.00 and that the wife was not present at the time of purchase.[15] He says it is his first pet. The wife says it is “our pet”.
[15] Husband’s affidavit filed 17 August 2020, paragraph 17.
While there is a dispute about who paid for the dog and how much the dog cost those details are of little consequence. The circumstances of the purchase of the dog is not, in itself, determinative of ownership,[16] nor does it determine the future ownership of him. Both parties have a sentimental attachment to the dog but that is also not determinative of who should retain him. The husband’s tenacity in endeavouring to have the dog in his care in my view does not determine that he has a better entitlement to the dog than the wife.
[16] Dagher & Batarseh [2017] FCCA 316 at [22].
The wife has made significantly greater financial contributions to the dog during the relationship and post separation. The wife is also the registered owner of the dog. The dog has remained in the wife’s care since separation, being over two and half years ago. The wife has cared for, maintained and paid all necessary expenses for the dog since then which includes the 12 months the husband was incarcerated, when clearly he was not in a position to do anything for the dog.
Given the wife’s financial expenditure on the dog and her maintenance and care of him the orders include that she shall retain the dog.
Of no impact on that determination but only out of interest, during the wife’s cross-examination the husband was observed to be patting a dog. Upon enquiry the dog belongs to the husband’s partner with whom the husband now lives. The Court does not know whether this dog has met the other dog or if he would be able to settle into a new home with a strange person and a strange dog.
Contributions consideration
An assessment of contributions does not require “over-zealous” attention. It is not a mathematical or accounting exercise, but rather involves the identification and assessment of all of the parties’ respective contributions of all kinds and from all sources in a holistic way across the course of the relationship and in the post separation period to the point of assessment. Furthermore, contributions are not required to be attached or directly referable to any arbitrary time frames or any specific item of property.[17] The weight to be attached to initial contributions must be assessed against all of the contributions, both financial and non-financial that are made.[18]
[17] Dickons & Dickons [2012] FamCAFC 154 at [24] – [26].
[18] Jabour & Jabour [2019] FamCAFC 78
The husband seeks that each party receive 50 percent of the proceeds of sale on the basis that the contributions made by each of them or on their behalf are equal. That has not always been his view of the parties’ respective entitlements nor has it been the view of Mr E.
The wife seeks that she receive 100 percent of the net proceeds of sale. That has not always been her view.
A discussion took place between the wife, her mother and Mr E pursuant to his power of attorney on behalf of the husband on 12 December 2019 in relation to the sale of Suburb C.
On 12 January 2020 a meeting was held at Mr E’s home between him, the husband’s mother and the wife. Mr E records that at that meeting agreements were signed as to the sums of money to be reimbursed to him for repairs to Suburb C and lease payments on Motor Vehicle 1 made by him. He further records the following:
(a)the wife is entitled to receive $70,000.00 being her original deposit plus half the mortgage repayments of $30,000 as the husband did not pay any payments over the period;
(b)that landscaping and repairs to house costs of approximately $13,000 would be split 50/50 and deducted from those shares;
(c)the labour cost for external works be credited to the husband as contributions to the house; and
(d)the car costs and repairs be deducted from only the husband’s share only as he was the one who drove it.[19]
[19] Annexure “E-5” to Mr E’s Affidavit filed 29 September 2021.
The wife told the Court that Mr E and she had agreed that the money split would be 70/30 “and they clearly knew that I contributed more, so that – that – yes, that was evident.”[20]
[20] Transcript 7 December 2021 p.27.
Plainly the wife was to receive more of the proceeds of sale and plainly the husband was to bear more responsibility for the work undertaken and money provided by Mr E. On my calculations before any repayments were made to Mr E from the parties respective shares, the wife would have received around 64 percent of the net proceeds of sale and the husband around 36 percent. Notably the husband was to reimburse his father some $8,000.00 more than the wife. Accordingly the wife would have received $98,599.00 net and the husband $44,383.00 net.
Discussions were also held between the husband and wife. On 30 April 2020 they signed a “Property Settlement Agreement (Final) dated 18 April 2020.[21] The agreement records that the net proceeds of sale of Suburb C in the sum of $164,500 be distributed as to $105,500 to the wife and $59,000 to the husband, that the sum of $14,602 being landscaping and internal rectifications be paid directly to Mr E as to $6,401.00 by the wife and $8,401.00 by the husband and that a further sum of $6216.00 being Motor Vehicle 1 repairs, payments and registration also be paid directly to Mr E by the husband.
[21] Annexure “E-4” to Mr E’s Affidavit filed 29 September 2021
The two agreements referred were plainly not acted upon. Neither party now seeks to rely on the terms of those agreements. However, I am of the view that the agreements are evidence of the parties’ views at that time in relation to what they thought was fair in all of the circumstances.
On 12 May 2020 the husband’s solicitors wrote to the conveyancing company in anticipation of settlement of the sale of Suburb C.[22] The husband’s solicitors advised the conveyancing company that they were instructed that the sale proceeds after discharge of the mortgage and costs associated with the sale be disbursed as follows:
(a)Mr E $20,818.00;
(b)The husband $44,483; and
(c)The wife $99,199.00.
[22] Annexure “B-2” to Wife’s Affidavit filed 25 November 2021.
I calculate that after the payment to Mr E that there is a percentage distribution of around 69 percent to the wife and 31 percent to the husband. I note that the net figures to the parties referred to in paragraph 81 are remarkably similar to those in the preceding paragraph.
Both parties assert the agreements between them broke down on the basis that the other party was using the dog as leverage to secure an agreement. It was on the basis of the breakdown of the agreements that the wife commenced these proceedings in June 2020.
The terms of distribution set out in the husband’s solicitor’s letter is not determinative of the matter but again it provides an insight into the views of the parties at that time as to what was a fair settlement.
I do not accept that the husband would have been prepared to accept a sum less than half of what the wife was to receive on the basis that it was contingent upon him retaining the dog. There is no evidence before the Court supporting that assertion. There is however evidence to the contrary. The husband’s solicitors raised arrangements for the dog in a letter to the wife dated 26 May 2020. The letter includes:
While financial matters appear to be have been agreed upon in principle, arrangements for the pet dog are outstanding.
Unless agreement can be reached on all matters including the pet dog […], the proposed financial settlement on 12th June will not proceed.
Our client requires the return of his dog […] by no later than 4.00pm Thursday 28th May 2020.[23]
[23] Annexure “B-4” to Wife’s Affidavit filed 25 November 2021.
Notably this letter post-dates the letter the husband’s solicitors sent to the Conveyancing Company which confirmed how the proceeds of sale were to be distributed.
The view of the Court after taking into account the legislation, the authorities and the totality of the evidence largely accords with the views of the parties as referred to above. That is, upon assessing holistically the myriad of contributions made by and on behalf of the parties, the wife’s contributions during the relationship and post-separation are far superior to those of the husband.
The husband’s family’s contributions by way of non-reimbursed work is most, if not all, of the contributions that can be credited in favour of the husband other than Mr E’s foregoing of profit.
The wife readily acknowledges that the contribution made on behalf of the husband by Mr E’s foregoing of profit for constructing the house on Suburb C is equivalent to her contribution of savings to the purchase of the land.
In addition to the savings of the wife used for the deposit and unpaid work undertaken by her and her family on Suburb C, the wife paid for all mortgage repayments, utilities and associated expenses on Suburb C. She no longer has the use of the first home buyer’s grant. By far the majority of her income went toward the common use of the parties, her parents provided rent free accommodation for half of the parties’ relationship and she undertook the homemaking duties. The wife has also paid outgoings on Motor Vehicle 1 of which she has had no use.
Whilst the parties and Mr E were of the view that around a 70/30 distribution of the proceeds would finalise the matter overall I note their “agreements” do not take into account Motor Vehicle 1, the D Bank loan nor is any reference made to the husband’s gambling. I take those matters into account and it is only on a contributions basis that I determine that the net property of the parties, excluding the dog, be adjusted by way of 70 percent to the wife and 30 percent to the husband.
RELEVANT FACTORS PURSUANT TO SECTIONS 90SM(4)(D)–(G) AND 90SF(3)
The wife is 32 years of age and is in good health. She works as a community worker and her gross income is $93,000.00 per annum. She is not living in a relationship.
The husband is 32 years of age and is in good health. The husband has a history of incarceration and since his most recent release from jail has been earning $1,000.00 per week, or $52,000.00 per year. The husband is living with a partner. The Court has no evidence in relation to her financial circumstances.
There is a disparity between the income received by the wife and the husband. The length of the relationship is short and it has not affected the earning capacity of the wife. The earning capacity of the husband may have been affected, but not by the length of the relationship. Plainly the husband has been the maker of his own undoing when it comes to the level of his income.
Section 90SF(3)(r)-wastage
Counsel for the husband sought to diminish the extent that the husband’s gambling should have on any property adjustment by suggesting to the wife that she participated in gambling with the husband. The wife was emphatic in her evidence that she never did so and that she has never gambled. I accept her evidence.
Counsel for the husband also suggested to the wife that somehow she was complicit in allowing the husband to gamble. She should have known the amounts he was wasting. Also as she was aware of the husband’s psychiatric report that notwithstanding she knew about the husband’s problems she nevertheless decided to stay in a relationship with him.
I accept the wife’s evidence that she was not aware of the extent of the husband’s gambling until after the hearing date on 24 February 2021. I also accept the wife’s evidence that she thought the husband “would change, he would get better once he got the house. It would be different. And I foolishly – you know, we were together and we were young. We met really young. We were kids. So I guess, if you are – if I was to get into a relationship like that now, it wouldn’t happen. But I guess there was a lot of factors as to why I didn’t leaver sooner.”[24]
[24] Transcript 7 December 2021 p.22.
Annexure “A-1” to the husband’s affidavit filed on 29 September 2021 is a report dated 14 September 2016 by Dr F, Consultant Psychiatrist. The report was prepared for criminal court proceedings of the husband. Dr F diagnosed the husband at that time with serious Lifelong Adult Attention Deficit Hyperactivity Disorder. It was Dr F’s opinion that:
the reckless and impulsive behaviour which has drawn the Laws attention is a consequence of his serious mental health issue, namely Lifelong Adult Attention Deficit Hyperactivity Disorder[25]
[25] Annexure “A-1” to Husband’s Affidavit filed 29 September 2021.
At that time Dr F anticipated a resolution of the features of the husband’s Lifelong Adult Attention Deficit Hyperactivity Disorder. Dr F was also of the view that the husband meets the criteria for Adult Attention Deficit Hyperactivity Disorder.
Counsel for the husband concedes that:
[the husband] has made a number of poor choices in his adult life, but these poor choices, in my submission, do not amount to the test of wastage in Kowali, nor should money that was gifted to the respondent by his parents that was spent in an impulsive way be notionally added back into the pool.
Further, when considering the authority of C & C, it could be said that [the husband] has an attention deficit disorder that makes him impulsive, and in my submission, he doesn’t have the necessary degree…of wantonness, negligence or recklessness, which is required to meet [the wife’s] Kowali claim.[26]
[26] Transcript 7 December 2021 p.99.
Counsel for the wife in answer to the C & C[27] defence submits this matter is not one which falls within that principle for the following reasons:
(a)the psychiatric report is old, having been prepared in 2016;
(b)the report makes no mention of gambling; and
(c)there is no indication that Dr F was aware of any gambling problem.
[27] C & C (2006) FLC 93-269.
I agree with the Counsel for the wife’s submissions. I further note that:
(a)Dr F makes the connection of “reckless and impulsive behaviour’ with Lifelong Adult Attention Deficit Hyperactivity Disorder and not Adult Attention Deficit Hyperactivity Disorder;
(b)Dr F, some six years ago, anticipated a resolution of the features of the husband’s Lifelong Adult Attention Deficit Hyperactivity Disorder. There is no evidence supporting that the husband still has Lifelong Adult Attention Deficit Hyperactivity Disorder;
(c)during the hearing the husband showed no remorse for his gambling;
(d)the husband gave no evidence that he continued gambling to recoup gambling losses; and
(e)as Counsel for the wife also submitted there is no evidence of the husband receiving any treatment for his gambling.
I consider that there is no nexus between the husband’s gambling and his diagnoses. The medical evidence does not provide any excuse for the husband.
The extent of the husband’s gambling was excessive. I am of the view that his excessive gambling is conduct that is properly able to be labelled as reckless. Accordingly I take into account the economic consequences to the parties of the waste of his income on gambling in determining any further adjustments to be made between the parties.
Lest it be forgotten that the net proceeds of sale available for distribution have been decreased by the payment to Mr E for work undertaken by him on Suburb C to repair damage caused by the husband.
I consider the conduct of the husband which caused damage to Suburb C which required part of the proceeds of sale to be spent on reparation work was reckless behaviour on the part of the husband. Thus there is a further element of wastage by the husband.
In all of the above circumstances I am satisfied that there should be a further adjustment of the net assets of 12 percent to the wife. I have factored into that percentage adjustment to the wife, a percentage adjustment to the husband for the disparity in the parties’ income.
Accordingly the overall percentage adjustment of the net assets of the parties is 82 percent to the wife and 18 percent to the husband.
JUSTICE AND EQUITY TO THE PARTIES
It is important to consider the real impact of any proposed adjustment in money terms and not simply in percentage terms. The asset pool is of a modest sum.
I consider that the wife’s proposal does not give sufficient recognition to the contributions made on behalf of the husband by his family over that for which they were paid. I also consider that the husband’s proposal does not acknowledge the superior contributions made by the wife and on her behalf or the wastage occasioned by the husband’s reckless behaviour.
Non-superannuation property other than the dog
I have determined the wife shall receive 82 percent of the net asset pool which equates to around $124,500.00 and that the husband shall receive 18 percent of the net asset pool which equates to around $27,300.00.
It is agreed that the D Bank loan be discharged from the net proceeds of sale.
The orders will provide for the proceeds of sale to be first distributed to the wife for her to discharge the D Bank loan. Once the sum of $7,004.00 is deducted from the proceeds of sale there is $139,822.00 available to be distributed between the husband and the wife. The husband will retain an unencumbered Motor Vehicle 1 to the value of $12,000.00 which reduces the sum he receives from the net proceeds of sale to around $15,300.00.
Accordingly from the remaining proceeds of sale after payment to the wife of $7,004.00 the wife shall receive 89 percent being around $124,500.00 and the husband shall receive 11 percent being around $15,380.00.
Superannuation
The relationship is short. The parties are young. Both parties are able to accrue superannuation entitlements in the future. In those circumstances there will be no adjustment to their respective superannuation entitlements.
CONCLUSION
For the above reasons I consider that the orders set out provide a just and equitable adjustment of the parties’ property in all of the circumstances.
I certify that the preceding one hundred and nineteen (119) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Boymal. Associate:
Dated: 5 August 2022
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