BD and SD
[2005] FMCAfam 167
•15 April 2005
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BD & SD | [2005] FMCAfam 167 |
| FAMILY LAW – Property – contributions post separation – 75(2) factors. |
| Child Support (Assessment) Act 1989 Family Law Act 1975 |
| In the Marriage of Clauson (1995) FLC 92-595 Russell v Russell (1999) FLC 92-877 |
| Applicant: | BD |
| Respondent: | SD |
| File Number: | SYM 561 of 2003 |
| Judgment of: | Sexton FM |
| Hearing dates: | 7 and 8 April 2005 |
| Delivered at: | Parramatta |
| Delivered on: | 15 April 2005 |
REPRESENTATION
| Counsel for the Applicant: | Mr P Schroder |
| Solicitors for the Applicant: | Johnson Horsley Lawyers |
| Counsel for the Respondent: | Ms L Henderson |
| Solicitors for the Respondent: | Kells The Lawyers |
ORDERS
That within 2 calendar months of the date of these orders the wife pay to the husband by way of property settlement the sum of seven thousand three hundred dollars [$7,300.00].
That simultaneously with compliance with Order (1) herein the following occur in relation to the former matrimonial home:
(a)The husband do all acts and things and execute all documents necessary to transfer to the wife the whole of his right title and interest in the home.
(b)The wife discharge the loan secured by way of mortgage on the home to Aussie Home Loans.
and thereafter the wife indemnify and keep indemnified the husband in relation to the mortgage and other outgoings on the home.
That for a period of 2 calendar months from the date of order, or pending compliance with Orders (1) and (2) herein, whichever is the earlier, the husband meet the mortgage instalments on the home as and when they fall due.
That from the date of order, except as provided in Order (3) herein, the wife meet all other outgoings in relation to the home including but not limited to the council rates, water rates and utilities.
In the event the wife fails to comply with Order (1) herein or fails to discharge the home loan in accordance with Order (2) herein by the due date, the husband and the wife shall forthwith do all things necessary to effect a sale of the home to be sold by private treaty at a price agreed between the parties and failing such agreement to be determined by the President of the Australian Property Institute of New South Wales or his nominee.
Upon the completion of the sale the proceeds to be distributed in the following order and priority:
(a)In payment of all legal costs, commissions, and agent expenses (including advertising expenses) in relation to the sale;
(b)In adjustment of rates and other outgoings in accordance with usual conveyancing practice;
(c)In discharge of the loan secured by way of mortgage to Aussie Home Loans registered on the title of the home;
(d)In payment to the wife in the sum of $76,849.50.
(e)In payment to the husband of 45% of the balance then outstanding.
(f)In payment to the wife of the balance.
In the event the home has not been sold by or before a date three (3) months from the date Order (5) becomes operative then the husband and the wife shall make all such arrangements and do all such acts and sign all such documents and pay all monies equally, necessary to procure a sale by public auction of the home upon the following terms:
(a)The auctioneer shall be a real estate agent;
(b)The reserve price shall, unless agreed between the parties, be as proposed by the auctioneer;
(c)Upon completion of the sale the proceeds shall be distributed in accordance with Order (6) herein.
That pending the transfer of the husband’s interest in the home, or the date of sale of the home in accordance with these Orders, the wife shall have the exclusive right to occupation of the home.
That the wife shall be responsible for repayment of the debts to:
(a)Her sister and her sister’s partner;
(b)GE credit line debt;
(c)GE Finance (Coles)
and shall indemnify and keep indemnified the husband in relation to those debts.
That the husband shall be responsible for repayment of:
(a)The debt to his mother;
(b)His personal loans to the Police Credit Union;
(c)The car loan in relation to the Commodore;
(d)His visa overdraft
and the husband shall indemnify and keep indemnified the wife in relation to those debts.
That other than as herein provided the husband and the wife each be declared the owner at law and in equity of all items of personalty including but not limited to proceeds of bank accounts, superannuation entitlements, money, and personal effects presently in their respective possession and control.
That except as otherwise provided herein, the husband and the wife remain liable for any debts in their own name at the date of these Orders and in this respect shall indemnify, keep indemnified and hold harmless the other from any liability in relation thereto.
That in the event the husband or the wife refuses or neglects to comply with any of the Orders herein, the Registrar of this Court at its Sydney Registry be appointed pursuant to section 106A of the Act to execute, in the name of the husband or the wife as the case may be, all deeds and instruments necessary to give effect to the orders herein, or any of them, and do all acts and things necessary to give validity and operation to the said deeds and instruments.
All exhibits tendered in these proceedings be returned at the expiration of one calendar month unless an appeal is lodged.
The solicitor who issued any subpoena collect that subpoenaed material and return it to the owner within 14 days.
All outstanding applications are dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT WOLLONGONG |
SYM 979 of 2004
| BD |
Applicant
And
| SD |
Respondent
REASONS FOR JUDGMENT
Applications
These are proceedings for final parenting orders and for the adjustment of property pursuant to section 79 of the Family Law Act 1975. The parenting issues were resolved by the parties on the second day of hearing and orders were made by consent on that day. Those orders provided for the child David [not his real name], aged 15 to live with his father, for the child Kent [not his real name], aged 12 to live with his mother and for each child to have regular contact with his non-residential parent and with the other child. The parties’ eldest child Sascha [not her real name], now aged 20 years is living with her father. In essence the orders reflected a continuation of the children’s present arrangements.
The proceedings were commenced by the husband who filed an Application at Wollongong Local Court on 29 August 2003 for interim and final parenting orders. The wife filed a response on 17 October 2003. Interim orders in relation to parenting were made on 16 October 2003 and amended on 5 February 2004 and the matter was transferred to the Family Court at Wollongong. On 26 March 2004 the husband filed an amended application seeking orders in relation to property settlement and different parenting orders. The wife filed an amended response on 17 May 2004 and later a further amended response.
At hearing, in relation to property issues, the husband sought an order for sale of the former matrimonial home and a splitting order in relation to his superannuation entitlement. At the commencement of hearing, counsel for the husband submitted the husband should receive 55% of the overall net asset pool on the basis of his greater post-separation contributions and there should be no adjustment for future factors. In closing submissions counsel submitted there should be a 5% adjustment in favour of the wife in relation to section 75(2) or ‘future’ factors such that each party receive 50% of the overall net pool of assets. At hearing the wife sought an order that the husband transfer his interest in the former matrimonial home to her and that she refinance the loan secured by way of mortgage. She sought an order that each party remain responsible for debts in their respective names and that the husband retain the whole of his superannuation entitlement. She sought orders in the alternative if the Court ordered the former matrimonial home be sold.
The parties did not agree on the debts to be included in the overall net asset pool to be divided between them.
Background facts
The husband is 41 years old.
The wife is 42 years old.
According to the husband, the parties commenced cohabitation in 1979, separated in 1981, and re-commenced cohabitation in 1984. According to the wife the parties commenced cohabitation in about 1980, separated for about 6 months between 1980 and 1983 and resumed cohabitation in 1983.
The parties married on 25 May 1985.
The parties separated on 29 April 2003. The wife deposed to a 23 year period of cohabitation and the husband a 21 year period. The husband has filed an application for divorce returnable on 18 May 2005.
There are three children of the marriage, Sascha, aged 20, David, aged 15 and Kent, aged 12.
The wife remained with the three children in the former matrimonial home following the parties’ separation in April 2003. The wife’s father had moved in with the parties shortly prior to their separation and remains living with the wife.
In February 2004 the parties’ son David moved to the home of the father. In March 2004, the parties’ daughter Sascha, followed. David and Sascha remain living with the husband.
In May 2004 the wife’s new partner, Mr Brown [not his real name] moved into the former matrimonial home with his 15 year old daughter and commenced a de facto relationship with the wife.
In May 2004 the husband commenced a de facto relationship with Ms Smith [not her real name]. He has since lived with Ms Smith and her two children Casey [not her real name] and Brendan [not his real name] in her home in a Wollongong suburb.
The husband is a full time police officer. The wife is a part-time child care worker.
Evidence
The wife relied on:
·Her affidavit sworn 22 March 2005;
·The affidavit of her sister sworn 24 March 2005;
·Her financial statement sworn 22 March 2005.
The husband relied on:
·His affidavit sworn 31 March 2005;
·His financial statement sworn 31 March 2005.
Both parties tendered additional documents that became exhibits in the proceedings.
The issues
The parties agreed prior to hearing that their contributions to the date of separation were equal. The issues in contention were:
a)Whether the debt alleged by the wife to be owed to her sister and/or the debt alleged by the husband to be owed to his mother should be included in the net asset pool of the parties to be divided between them;
b)Whether the husband was entitled to a higher contribution percentage than the wife as a result of post separation contributions;
c)Whether the wife was entitled to a higher than 5% adjustment for section 75(2) factors given the difference in the parties’ earning capacities;
d)Whether or not the former matrimonial home should be sold.
The relevant law – property
Section 79 of the Family Law Act defines the Court’s powers in determining applications for property settlement. Section 79(2) provides that:
“The Court shall not make an Order under this Section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.”
Section 79(4) sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters include:
a)The financial and non-financial contributions made directly or indirectly by or on behalf of each party or by a child to the acquisition, conservation or improvement of any property of the parties;
b)The contribution made by a party to the welfare of the family including any contribution made in the capacity of homemaker or parent;
c)The effect of any proposed order upon the earning capacity of either party;
d)The matters referred to in sub-section 75(2) as far as they are relevant;
e)Any other order made under the Family Law Act affecting a party to the marriage or a child of the marriage; and
f)Any child support payable.
The approach to the determination of an application under section 79 is well established by authority (In the Marriage of Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-595). The process involves four steps. Firstly, identifying the assets, liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined in section 79(4) (a) to (c) and the effect of any proposed order upon the earning capacity of either party. Thirdly, evaluating the relevant matters contained in section 75(2). The court must also take into account any other order already made under the Act affecting a party or child and any child support under the Child Support (Assessment) Act 1989 that a party to the marriage is to provide or might be liable to provide in the future for the children of the marriage. Fourthly, the court must be satisfied in all the circumstances that it is just and equitable to make the orders [Section 79(2)]. It is the justice and equity of the actual orders that the court must consider. Russell v Russell (1999) FLC 92-877.
Evidence and findings
In relation to Step 1: Identifying the assets and liabilities of the parties
The parties reached agreement as to the value of the assets and liabilities to be included in the net asset pool to be divided between them [“the pool”] with the exception of two items: (i) an alleged debt of the husband to his mother in the sum of $8,483.00 and (ii) an alleged debt of the wife to her sister in the sum of $1,023.00. The husband agreed to exclude from the net asset pool a part of his personal loan to the Police Credit Union, being $2,500.00. The wife agreed to exclude from the pool a debt of $4,040.00 owed by her to GE CreditLine.
The assets and liabilities of the parties as at the date of hearing are identified in the following table with those in contention marked in bold and italics:
| Assets as at the date of hearing | $ |
| Former matrimonial home [joint tenancy] | 350,000.00 |
| Wife’s motor vehicle | 4,000.00 |
| Husband’s superannuation | 170,000.00 |
| Wife’s superannuation | 6,400.00 |
| Contents of home | 1,010.00 |
| Cash in husband’s account at separation (Xmas Club $600.00 and savings account $350.00) | 950.00 |
| Aussie Home Loan | (163,000.00) |
| Car Loan on wife’s car | (8,488.00) |
| Personal Loan (Husband’s name) | (5,782.00) |
| Overdraft Visa at separation (Husband’s name) | (900.00) |
| GE Finance (Coles) | (1,134.00) |
| Debt to wife’s sister | (1,023.00) |
| Debt to husband’s mother | (8,483.00) |
| TOTAL NET ASSET POOL INCLUDING ITEMS IN DISPUTE | 343,550.00 |
There was no evidence before me in relation to payment of legal costs by either party. Both parties asked me to ignore legal costs in my assessment of the net asset pool and I have done as requested. No account has therefore been taken of legal costs paid or anticipated to be paid by either party.
The husband’s alleged debt to his mother: The wife said in evidence she knew nothing about this alleged debt until after these proceedings had commenced and she was served with a financial statement from the husband. In his affidavit sworn 31 March 2005 the husband deposed to borrowing funds from his mother to enable him to “make ends meet” which including servicing a number of loans of the parties. The husband annexed to his affidavit copies of cheque butts from his mother’s account which showed payments by his mother of $8,483.00 to the Child Support Agency on his behalf. The husband included a debt to his mother in his Financial Statement sworn 31 March 2005. As the husband’s evidence on this issue was not challenged by counsel for the wife, I find the husband’s mother has paid the sum of $8,483.00 on behalf of the husband to the Child Support Agency and the husband regards it as a debt. There was no evidence before me as to when the husband’s mother requires the funds to be repaid.
I accept counsel for the wife’s submission that the husband cannot claim credit by way of post-separation contributions for meeting child support payments while at the same time asking the Court to include his debt to his mother in the net asset pool to be divided between the parties. However, I find there is no reason to exclude this debt from the net asset pool of the parties.
The wife’s debt to her sister and her sister’s partner: In her affidavit sworn 22 March 2005 the wife deposed to having a conversation with the husband shortly after separation about installing insulation in the matrimonial home. She said the husband agreed to her redrawing on the loan facility with Aussie Home Loans to meet the cost. The wife went ahead and arranged for her neighbour to purchase the insulation at cost price. Her sister and her sister’s partner paid the $1,023.00 for the insulation. The wife annexed an invoice from Bunnings to her neighbour’s employer in the sum of $1,023.77. The husband recalled a conversation about insulation sometime prior to the parties’ separation but did not recollect the facts as asserted by the wife. The husband said he could not be responsible for the debt as it was incurred by the wife after separation. The wife’s sister’s evidence was consistent with the wife’s evidence. She had written to the husband requesting payment of the debt. She told the husband she had understood the cost would be met from the parties’ redraw facility. The husband denied liability. I am satisfied that the parties had, either before or after separation, discussed the installation of insulation in the home. I am satisfied on the evidence of the wife and her sister that the sum of $1,023.00 is owed by the wife to her sister and I find there is no basis for excluding the debt from the net asset pool of the parties.
I therefore find the net asset pool of the parties available for division between them to be as set out in paragraph 22, being a total of $343,550.00. Both parties agreed that estimated sale costs should be deducted from the net asset pool in the event an order was made for the home to be sold. In the absence of any evidence from either party on this issue, I have estimated sale costs at $9,000.00 [2% of estimated sale price + $2,000.00 for legal costs and disbursements] for the purpose of the necessary calculations.
In relation to Step 2: assessing the contributions of each party
The parties cohabited for a period of between 21 and 23 years, finally separating in April 2003. The parties agreed that during the marriage the husband worked full time and made the greater financial contributions, while the wife took the greater responsibility for the day to day domestic and parenting tasks. The parties agreed their contributions to the date of separation were approximately equal.
Counsel for the husband submitted that from the date of separation the husband made greater financial contributions than the wife which entitled him to a higher contribution based entitlement. The wife did not deny the husband made greater financial contributions both before and after separation. She did not however, agree that the husband should be credited with a higher percentage contribution.
There were only minor differences in the parties’ factual positions as to what occurred after separation. The husband continued to work full time in the police force and the wife continued to work part-time a child care service, apart from a period of 10 months from the end of October 2003 until September 2004 when she took leave without pay. During that period, the wife was dependent on Centrelink benefits.
The wife was cross-examined in detail as to her income. The wife said her salary had remained almost the same for the last 18 months. She said she had calculated her estimated weekly income deposed to in her Financial Statement, by referring to one pay docket. She had not kept any other pay dockets. She said the weekly figure of $130.40 deposed to in her Financial Statement was her usual income if she was not asked to work additional hours in the afternoons. Counsel for the husband showed the wife a bundle of payslips for the period 1 July 2004 until 25 March 2005. He said on the basis of these payslips her average income during that period was $191.52 per week. The wife was prepared to accept counsel’s assertion. The wife’s salary records from the child care service from the end of 2001 until the present were tendered in evidence [Ex 7]. I am satisfied the wife’s income varies from the equivalent of an estimated $7,000.00 a year to an estimated $16,000.00 a year. I am satisfied the wife was careless in her Financial Statement in relation to her average income, but I am not satisfied the wife attempted by her carelessness to mislead her husband or the court. I find the wife has a low income and had very limited capacity to meet any more than the most essential expenses after the breakdown of her marriage until May 2004. From that time, Mr Brown, the wife’s de facto partner, was able to share in day to day expenses. However, Mr Brown was required to support his 15 year old daughter and on his salary of about $22,000.00 a year, would not have been in a position to assist the wife to any significant extent.
The husband deposed to earning an income of $73,268.00 a year. I am satisfied that the husband had a much greater income than the wife both during the marriage and after separation and therefore had a much greater capacity than the wife to meet ongoing and necessary expenses including repayment of debts and the mortgage repayments. The wife was cross-examined as to why she did not make payments to the mortgage loan once her de facto partner started living with her in May 2004. The wife said that the arrangements were in place and she assumed would continue until the parties reached a final property settlement. I find that the wife had very limited capacity, even when living with her de facto partner, to make a significantly greater contribution to expenses than she did.
The wife was cross-examined as to why she did not retain financial records for these proceedings. The wife said she had a habit of re-cycling accounts, tax returns, pay slips and bank statements and had not realised the importance of retaining such documents for the hearing. While I found her conduct unsatisfactory in light of these proceedings, I am satisfied the wife has made no attempt to hide her financial circumstances, and that those circumstances are modest.
The husband annexed a schedule of payments he made for the benefit of the parties and their children between May 2003 and November 2004. An updated schedule became Exhibit 2 in the proceedings. It was not disputed and I am satisfied that the husband met the repayments on the home mortgage, his personal loan with the Police Credit Union, the loan for the Commodore in the possession of the wife, car insurance, the American Express credit card account, home and contents insurance, medical insurance and for a few months after separation various utilities accounts, some insurances and internet fees. He made payments towards the GEC Finance loan from August to September 2004 and was paying $75 per fortnight towards that debt from February 2005. I am satisfied that in February 2004 the husband used the proceeds of sale of the parties’ half share in a caravan towards debts owed by the parties. I am satisfied that in May 2004 the wife traded in the Commodore motor vehicle for $4,000.00 and used those funds towards the purchase of a second hand Hyundai motor vehicle.
The husband deposed to paying child support for David and Kent from July 2003 in the sum of $1,400.75 per month. He was then credited with close to half of the mortgage repayments and orthodontic expenses for David by way of prescribed non-agency payments from August to October 2003. Following review in October 2003 his child support liability was reduced to $1,000.00 per month until September 2004. It was further reduced to $724.17 per month. From October 2004 until November 2005 the husband’s liability for child support for Kent was assessed at $705.33 per month. On the application of the husband this assessment was reviewed. From 1 October 2004 until 14 November 2005 the husband’s liability is $477.33 per month. As the husband claims 25% as a prescribed non-agency payment because of his payments on the mortgage, the wife receives the sum of $358.00 per month or $165.00 per fortnight. The figure deposed to by the husband in his Financial Statement of $119.33 is not correct. The husband complained that his child support liability was not reduced as a result of David moving to live with him in February 2004, but it is clear from the decision of Senior Case Officer Paul Duck of 29 November 2004, annexed to the wife’s affidavit that he took this change in circumstance into account in reaching his decision to reduce the husband’s child support income from October 2004 until August 2005.
The wife did not dispute the contents of the two schedules of payments. Nor did the husband dispute that the wife had made contributions to some of those expenses, which he credited to the wife on his schedule [Ex 8]. The wife said she had offered to assist the husband with additional mortgage repayments, car loan repayments and various expenses but the husband refused. The husband agreed the wife paid council rates, water rates, telephone and other utilities, despite her being in arrears in relation to some accounts. It was submitted by counsel for the wife that the husband should not be credited with child support payments as well as with the debt alleged to be owed to his mother for $8,483.00 paid to the agency by the husband’s mother on his behalf. I agree with this submission. Nor do I credit the husband with mortgage payments for the period October until December 2004 when the payments were met from a re-draw of $3,141.00 on the mortgage.
The wife said in evidence that with the assistance of her de facto partner after May 2004, she may have been able to meet at least a part of the mortgage repayment each month. She and her partner, Mr Brown had consulted a mortgage broker about borrowing money to purchase a home. However, she took no steps to assist with these payments after August 2003. In effect, the husband supported the wife, Mr Brown, the wife’s father, Mr Brown’s daughter and the parties’ son Kent remaining in the former matrimonial home from May 2004.
From November 2003 for a period of 10 months, the wife said she took a year’s leave without pay. She said the children were badly affected by the breakdown of the parties’ marriage and she described herself as “an emotional mess.” She wanted to be home for the children after school and to help them adjust to their new situation. She relied on Centrelink payments and child support from the husband for her income. She had almost no capacity to meet anything beyond the most basic expenses. It is difficult to conclude, that whatever her intentions, the wife had the means to contribute to mortgage repayments or any of the loan repayments being met by the husband during this period.
While meeting the expenses set out in his schedule of payments, the husband said he made contributions to his present household in accordance with his capacity to do so, month by month. He conceded in cross-examination that in late 2004 he had entered into a joint loan with his de facto partner and guaranteed a personal loan for his daughter Sascha so she could purchase a car. Although the husband said he was not contributing to the joint loan repayments, nor to Sascha’s loan, I am satisfied the husband entered into those commitments understanding his potential liability if either his partner or his daughter defaulted on their respective loans, and must have concluded that he could continue to manage financially, despite his additional exposure.
It is unfortunate that the parties have not communicated for about 18 months. Both could have benefited from a fuller understanding of the other’s financial position and from cooperating in finding ways to meet their combined necessary expenses pending hearing. Both complained the other had made financial decisions without consulting the other. However, neither gave evidence of the other acting in a financially irresponsible or reckless manner and I am satisfied that each party by their actions was endeavouring to maintain a level of stability in both households without undue disruption to the other or to the children.
From the date of separation until February 2004 when the parties’ children remained living with the wife, I am satisfied the parties contributions continued to be approximately equal. In effect the parties continued their pre-separation arrangements with the husband earning the majority of the income and the wife performing the majority of domestic and parenting tasks. From February 2004 however, the situation changed when David and then Sascha moved to live with their father. The wife’s expenses and contributions as a parent should have decreased, at least to some extent. The situation changed further in May 2004 when the wife’s de facto partner and his daughter moved to live in the former matrimonial home with the wife. From May 2004 until hearing, given the husband’s financial contributions to the wife’s household remained substantially the same, and the husband had the responsibility for David’s care, I am satisfied the husband’s contributions, both financial and to the welfare of the family were greater than those of the wife. As a result, I am satisfied the husband should receive a 3% adjustment in his favour.
The orders that I propose making in this matter will not affect the earning capacity of either party to these proceedings.
Taking all these matters into consideration I find that as a result of their respective contributions the assets of the parties should be apportioned 47% to the wife and 53% to the husband.
In relation to Step 3: A consideration of ‘future factors’
I have considered each of the factors listed in section 75(2) of the Act.
The husband is 41 years of age. The wife is 42 years of age. There was no evidence before me to suggest either party suffered any health problems.
Both parties are in paid employment. The husband has secure and permanent employment with the NSW Police Service earning over $73,000.00 a year. The wife works part time for a child care service earning between $7,000 and $16,000 a year. The wife holds an Out of School Hours Certificate from TAFE and plans to enrol in a Diploma of Child Care for 18 months from July 2005, while continuing to work part-time. Her income is supplemented by Centrelink benefits. The wife hopes a Diploma will improve her chances of obtaining additional work. The husband has demonstrated an earning capacity of over six times that of the wife and the husband will continue to have a future maintainable capacity for employment that is superior to the wife. The wife will have the ongoing care of a 12 year old child of the marriage. The wife is living in modest circumstances which are unlikely to improve. This is the most significant of the section 75(2) factors. I have made an adjustment in favour of the wife.
Both parties are living in de facto relationships. Neither of the parties’ new partners gave evidence in these proceedings. The husband deposed to his partner Ms Smith “sharing expenses of the household”. The husband deposed to Ms Smith earning $600.00 per week. The husband lives with Ms Smith in a home in her sole name in a Wollongong suburb. The husband gave evidence that his partner contributed towards a holiday to Bali for himself and the three children and herself and her two children for 10 days in March 2004. In or around October/November 2004 the husband entered into a joint loan arrangement with Ms Smith in the sum of approximately $234,000.00. The loan is secured by the property in a Wollongong suburb. The husband has guaranteed another loan to his daughter for the purchase of a car. The wife deposed to her partner, Ms Brown working as a casual coach driver earning approximately $22,000.00 - $23,000.00 gross per annum. The wife deposed to the husband living in superior accommodation in comparison to her accommodation in the former matrimonial home. I am satisfied the husband is living in superior financial circumstances to those of the wife.
The wife’s household accommodates the wife’s father, an aged pensioner, her partner Mr Brown, her partner’s 15 year old daughter, and the parties’ son Kent. The husband’s household accommodates the parties’ children Sascha and David, the husband’s partner and her two children from a previous relationship. The husband deposed to Sascha earning $460.00 per week. There was no evidence as to whether Ms Smith receives child support for her two children.
The husband has an ongoing obligation to meet child support for Kent until he is 18 years and to support David, who has no firm plans for the future. The wife has an ongoing obligation to support Kent. Although the husband’s child support obligation will increase when his non-agency payments are reduced, the husband will be significantly better off paying child support without meeting mortgage repayments.
The husband agreed to exclude from the net asset pool part of his personal loan to the Police Credit Union, being $2,500.00. The wife agreed to exclude from the pool a debt of $4,040.00 owed by her to GE Finance. I take into account that the parties must repay their respective debts.
The husband has an entitlement to long service leave. The value at the time of hearing was $37,143.00. The wife was unsure as to whether she had such an entitlement, but I am satisfied that given the length of her employment with a child care service, the wife should in accordance with law, have such an entitlement. It was conceded by counsel for the husband that the wife’s entitlement would be insignificant in comparison to that of the husband.
The husband has been living with Ms S for about a year. He is sufficiently secure in that relationship to have entered into a very substantial loan arrangement with Ms Smith. The husband said in evidence he has built a deck at the front of Ms Smith’s home, located in a prime real estate area of Wollongong. I am satisfied the husband’s arrangements are secure.
Taking all section 75(2) factors into account, I am satisfied there should be an adjustment in favour of the wife of 8%. The wife will therefore be entitled to 55% of the net asset pool.
In the orders sought by the husband at hearing, he asked that the home be sold and the mortgage discharged. He asked that his superannuation entitlement be subject to a splitting order such that each party receive half the entitlement. Counsel for the husband made no submissions in relation to the issue of superannuation splitting and sale of the home against retention of the home by the wife. The wife asked that the husband transfer his interest in the home to her and that she discharge the joint loan and refinance. The wife deposed to Kent being settled in the home and to the two older children enjoying their contact time with her in the home. Counsel for the wife submitted that the husband would not be disadvantaged in the longer term if the wife were permitted to retain the home. Counsel submitted that although the husband would not be in a position to access his superannuation for many years, he was living in a secure relationship in a comfortable home, he had a good income which was likely to improve and an ability to borrow money. Counsel submitted that the husband had resources superior to those of the wife. His financial position would improve when he was relieved of the mortgage payments. In counsel’s view the husband would soon overcome any initial difficulties he may face being left with a superannuation entitlement, not yet available to him. On the other hand, the wife was unlikely to be in a position to own a home if the home was sold and the wife received a share of the husband’s superannuation entitlement.
I agree with counsel for the wife that the wife should be given the opportunity to remain in the matrimonial home. The home has a relatively modest value and the wife has the ongoing care of the youngest child of the parties. Although it will be difficult for the husband initially, I am satisfied with his greater disposable income once relieved of the mortgage payments, it will not be long before the husband’s position should markedly improve. I am satisfied the husband is in a secure relationship and has the benefit of living in his partner’s home and has her assistance with day to day living expenses. He has borrowing capacity well beyond that of the wife. The husband will have debts to repay but in relation to the largest of these, the debt to his mother, there is no evidence before me to suggest the loan must be repaid immediately. On the orders I intend to make, the husband will receive some cash from the wife.
I have made orders which require the wife to discharge the loan held in joint names within 2 months. If the wife is able to re-finance the loan, she should be able to do so within that period. If she is unable to do so, I have provided for the home to be sold and the mortgage discharged at sale.
The wife will retain her car and home contents and have responsibility for repayment of the debt owed to her sister and to GE Finance (Coles). This means she will have the assets and liabilities set out in this table:
| Assets and liabilities to be retained by wife | $ |
| Wife’s motor vehicle | 4,000.00 |
| The former matrimonial home | 350,000.00 |
| Contents of home | 1,010.00 |
| Wife’s superannuation | 6,400.00 |
| GE Coles debt | (1,134.00) |
| Loan secured by mortgage on home | (163,000.00) |
| Debt to wife’s sister | (1,023.00) |
| Total | 196,253.00 |
The wife will need to pay the husband the sum of $7,300.00 to receive 55% of the net asset pool of the parties.
The husband will then have the assets and liabilities set out in the following table:
| Assets and liabilities to be retained by husband | $ |
| Husband’s bank account | 950.00 |
| Husband’s superannuation | 170,000.00 |
| Payment by wife to husband | 7,300.00 |
| Debt to husband’s mother | (8,483.00) |
| Overdraft visa at separation | (900.00) |
| Personal loan | (5,782.00) |
| Car loan | (8,488.00) |
| Total | 154,597.00 |
In the event the wife is unable to discharge the home loan and meet her obligations to the husband the home will be sold. The asset pool will change taking into account the costs of sale and the sale price. If the value of the home and the mortgage to Aussie Home Loans is deducted from the pool, the asset pool is $156,550. The wife is to receive 55% of the overall pool, so she must receive $86,102.50 of the asset pool excluding the home and mortgage and 55% of the net sale proceeds of the home. The wife will have her car, superannuation, contents and will have the debts to her sister, GE Creditline, GE Finance, which is a total of $9,253.00. She will therefore need $76,849.50 from the sale proceeds in addition to 55% of the balance remaining.
I am satisfied that in all the circumstances the Orders set out at the beginning of these Reasons are just and equitable.
I certify that the preceding sixty three (63) paragraphs are a true copy of the reasons for judgment of Sexton FM.
Associate: Collette McFawn
Date: 15 April 2005
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