BEAM & BEAM

[2019] FCCA 3187

FEDERAL CIRCUIT COURT OF AUSTRALIA

BEAM & BEAM [2019] FCCA 3187

Catchwords:
FAMILY LAW – Property – application for division of assets – previous division of chattels agreed as equal – valuation of the former matrimonial home – property damage – consideration of future needs – justice and equity – orders made as proposed by the wife.

Legislation:

Family Law Act 1975 (Cth), ss.75(2), 79(4)

Cases cited:

Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC ¶93-143
Stanford & Stanford (2012) HCA 52

Applicant: MS BEAM

Respondent: MR BEAM

File Number: MLC 14199 of 2018

Judgment of: Judge McNab

Hearing dates: 17, 18 and 19 July 2019

Date of Last Submission: 19 July 2019

Delivered at: Mildura

Delivered on: 19 July 2019

REPRESENTATION

Counsel for the Applicant: Ms Campbell

Solicitors for the Applicant: Nicholes Family Lawyers

The Respondent appeared in person.

ORDERS

1. Within 7 days from the date of these Orders:

   (a)the parties do all acts and things and sign all documents necessary to cause the RACV insurance payments made in relation to claim numbers (… and …) be paid to the Respondent Husband (‘Husband’);

   (b)the parties do all acts and things and sign all documents necessary to cause the net payment received by the parties following the Temporary Allocation Sell Order be paid to the Applicant Wife (‘Wife’); and

   (c)the Husband do all acts and things and sign all documents necessary to transfer to the Wife at her expense all of the Husband’s interest in the water licence (account number …).

2. The Husband, pay the sum of $117,950.00 (‘the payment’) to the Wife within 60 days from the date of the Orders (‘the due date’).

3. Contemporaneously with the payment:

   (a)the Wife shall do all such acts and sign all documents necessary to transfer to the Husband at the Husband’s expense all of her interest in the property situate at and known as A Street, Suburb B, being the whole of the land more particularly described in Certificate of Title Volume … Folio … (‘the property’); and

   (b)the Husband discharge the Commonwealth Bank of Australia Mortgage (…) secured by the property.

4. In the event that the Husband fails to make the payment on or before the due date and/or fails to discharge the Commonwealth Bank of Australia Mortgage, the parties shall do all such acts and things and sign all documents necessary to list the property for sale as follows:

   (a)the parties shall appoint a real estate agent as agreed between the parties in writing and, failing agreement, the parties shall appoint a real estate agent nominated by the President of the Real Estate Institute of Victoria or his/her nominee (‘the agent’);

   (b)the reserve price be as agreed between the parties and failing agreement, to be set by the agent;

   (c)each of the parties do all such acts and things, and sign all such documents as may be required, to co-operate with the agent including, without limiting the generality of the foregoing:

   (i)making the key or other means of accessing the property available to the agent;

   (ii)allowing inspection of the property at all times as requested by the agent;

   (iii)doing and saying nothing to hinder the sale of the property being effected; and

   (iv)ensuring that the property, including the grounds, are in a neat and clean condition at the time of inspection by the agent or any prospective purchasers; and

   (d)the parties appoint a solicitor or conveyancer to facilitate the sale as agreed between the parties in writing and, failing agreement, as nominated by the agent.

5. Upon settlement of the sale of the property, the proceeds of sale be applied as follows:

   (a)first, in payment of all costs, commissions and expenses of the sale (including marketing expenses, the agent’s commission and vendor’s conveyancing expenses);

   (b)second, in payment of such sum to repay the loan and discharge the mortgage encumbering the property to the Commonwealth Bank of Australia (mortgage no. …);

   (c)third, in payment of any outstanding Council rates and water/sewage expenses outstanding with respect to the property;

   (d)fourth, in payment to the Husband of so much of the payment referred to in Order 2 that remains outstanding together with interest calculated in accordance with the Family Law Rules 2004 (Cth) until the date that payment is made to the Wife; and

   (e)fifth, in payment of the balance of the proceeds of sale to the Husband.

6. Pending the sale of the property:

   (a)the Husband have sole use and occupation of the property;

   (b)the Husband is to be solely responsible for all mortgage payments due to the Commonwealth Bank of Australia and indemnifies the Wife against liability for payment; and

   (c)the parties are hereby restrained by injunction from re-drawing or increasing the balance of the Commonwealth Bank of Australia Mortgage and further encumbering the property without the prior consent of the other party in writing.

7. The Husband retain, at his expense and to the exclusion of the Wife, all of his right, title and interest in C Pty Ltd.

8. Contemporaneously with the Husband’s retention of C Pty Ltd referred to in Order 7, the Husband pay and indemnify the Wife, and keep her indemnified, with respect to:

   (a)any and all debts, liabilities, actions, suits or demands of whatsoever nature and kind by or against C Pty Ltd; and

   (b)all debts owed to the Australian Taxation Office as at the date of these Orders.

9. Within twenty-eight (28) days of the date of this Order, the parties do all such acts and things and sign all necessary documents as may be required to disburse any surplus funds held in any joint bank account to the Wife and thereafter close each joint bank account.

10. The Applicant retain the property situate at and known as D Street, Suburb E (also known as D Street, Suburb E , VIC … (… Parish of Suburb L)), more particularly described in Certificate of Title Volume … Folio … for her sole use and benefit absolutely.

11. Unless otherwise specified in this Order, and save for the purposes of enforcing this Order:

    (a)each of the Husband and the Wife be solely entitled to the exclusion of the other to all property, including but not limited to motor vehicles, furniture, artwork and jewellery and superannuation in the possession of such party as at the date of this Order;

    (b)money standing to the credit of the parties in any bank account is to remain the property of the person in whose name the account stands;

    (c)each party renounces any claims they may have to any superannuation or employment benefits or insurance benefits belonging to or earned by the other;

    (d)each party be solely liable for, and indemnify the other, with respect to any liability encumbering any item of property to which that party is entitled pursuant to this Order or which is in that party’s name as at the date of this Order; and

    (e)any joint tenancy is hereby severed.

12. Save for as provided in this Order, the Husband and the Wife be solely responsible for, and indemnify the other with respect to, any amount owed to the Commissioner of Taxation (or Deputy Commissioner) that are assessed as owing by them personally or by an entity, or trust interest, or income derived from same, retained by them under this Order including but not limited to any amount owing at the date of this Order or owed as a result of a deemed distribution and/or dividend made from any entity or trust whether before or after the date of this Order.

13. The parties do all such acts and things and sign all such documents as may be required to comply with their obligations arising from this Order.

14. In the event that either party refuses or neglects to do any act or sign any document required to be signed or executed in compliance with the provision of this Order, then pursuant to s 106A of the Family Law Act 1975 (Cth), the Registrar or Deputy Registrar of the Family Court of Australia at Melbourne is hereby appointed to execute all deeds and documents in the name of the defaulting party and do all acts and things necessary to give validity to the said Order, and the affidavit of the solicitor for the non-defaulting party shall be sufficient evidence of such non-compliance.

15. The Husband shall pay the Wife’s costs fixed in the sum of $7,120.50.

AND THE COURT NOTES THAT:

1. Pursuant to Section 81 of the Family Law Act1975 the parties intend that these orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.

IT IS NOTED that publication of this judgment under the pseudonym Beam & Beam is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 14199 of 2018

MS BEAM

Applicant

And

MR BEAM

Respondent

REASONS FOR JUDGMENT

(DELIVERED EX-TEMPORE – REVISED FROM TRANSCRIPT)

Introduction

1. This is an application for property settlement between the Applicant wife (‘the wife’) and the Respondent husband (‘the husband’). The parties commenced cohabitation in … 2003, married in … 2005 and separated in December 2014.

2. The parties have three children, X born on … 2005 and aged 15, Y born on … 2006 and aged 12, and Z born … 2010 and aged nine. X lives with the husband and Y and Z live with the wife.

Procedural history

1. These proceedings were issued by the wife on 7 December 2018. The husband filed a Response on 24 January 2019.

2. The matter first came before the Court on 5 February 2019 before his Honour Judge Riethmuller, where orders were made for the matter to be listed for trial on 17 July 2019 in the Mildura circuit sittings. The parties were also required to attend a property mediation with Relationships Australia, which was held on 5 May 2019.

3. The husband was represented until his solicitors gave notice of their intention to withdraw from these proceedings, which became effective on 14 June 2019. The husband appeared unrepresented at the final hearing on 17 July 2019. The wife was represented by Counsel.

4. An Amended Initiating Application filed by the wife on 2 July 2019 set out the orders sought by the wife.

5. The husband sought an adjournment of the hearing and the trial, relying on an affidavit stating:

   1. I request leave from proceedings to seek new representation as my previous legal representation has withdrawn detailed in annexure a.

   2. I am unable to manage this case on my own.

6. That request for an adjournment was refused, and the matter was stood down for the parties to have discussions. The matter was further stood down until 18 July 2019.

7. On the morning of 18 July 2019, the husband produced a medical certificate from a general practitioner, certifying that the husband suffers from chronic anxiety. On that basis, the Court sought to accommodate the husband's anxiety in the manner it conducted the proceeding.

8. The hearing commenced at around 3.15pm on 18 July 2019.

The hearing

1. The Full Court in Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC ¶93-143 at [39] identified a preferred four-step process in property matters under the Family Law Act 1975 (Cth) (‘the Act’):

   a)to identify the pool of assets and liabilities generally, and usually at the time of hearing;

   b)to assess the relative contributions of both the financial, non-financial, direct and indirect nature as specified by section 79(4) of the Act;

   c)to consider the factors as are relevant contained in section 75(2) of the Act; and

   d)finally, to determine whether the order the Court proposes to make is just and equitable to both parties.

2. This approach was approved in the decision of the High Court in Stanford & Stanford (2012) HCA 52.

The value of the parties’ assets

The former matrimonial home

1. It is disappointing that the parties were unable to reach an agreement in this matter given the narrow ambit of the dispute.

2. The parties agree as to the value of the property situated at A Street, Suburb B, (‘the former matrimonial home’). The husband obtained a valuation report from Real Estate Agent, which valued the house as at 28 May 2019 at $285,000. The wife did not take issue with this valuation.

3. The husband raised at trial that the valuation may not take into account damage that had occurred to the property due to a severe storm. The damage resulted in an insurance claim – which has been accepted by the insurer – of $63,464.

4. Page 5 of the valuation report records as follows:

   The dwelling is in only fair condition. We are advised that the roof has been damaged as a result of storm damage in late 2016, and there is evidence of some water intrusion in places, and damage to the northern wall cladding and several windows. Some of the electrical fittings are also advised to be faulty, possibly as a result of water intrusion into the ceiling.

5. On that basis, the valuation of the former matrimonial home took into account the damage caused by the storm in reaching the figure of $285,000. The value of the proceeds of the insurance claim in respect of the damage is $63,464.

6. There is also a water licence attached to the property, with an agreed value of $55,000.

7. Before deduction for liabilities, the value of those assets is $403,464. The agreed liabilities are a mortgage on the property of $56,000 and a tax debt of $2,100.

8. The net non‑superannuation assets associated with the former matrimonial house are $345,364.

Superannuation

1. There parties have negligible superannuation entitlements. The husband and the wife each have a superannuation balance of $9 and $3,000 respectively.

Chattels

1. The principal area of dispute is in relation to the value of assets that were distributed between the parties in October 2017.

2. The wife gave evidence at [11] of her affidavit filed on 7 December 2018 that a selection of chattels were divided between the parties by consent in or around October 2017, on what was agreed to be an equal basis. The wife retained:

   a)a Motor Vehicle F which she believes to be worth approximately $40,000; and

   b)a Motor Vehicle G thought to be worth around $8,000 and was sold by her for $7,500.

3. The husband retained:

   a)a Motor Vehicle L which he values at $15,000 according to his financial statement;

   b)a 20‑foot container;

   c)three trailers;

   d)two motorbikes;

   e)work tools; and

   f)generators.

4. The wife subsequently filed her trial affidavit on 2 July 2019. In that affidavit, she estimates the value of the items retained by the husband to be worth approximately $88,000. The wife estimated the value of the items retained by her to be approximately $48,000. These assertions as to the value of the goods was not supported by admissible evidence.

5. The husband says that the items retained by him are only worth around $30,000. Similarly, he has not put any evidence before the Court to support this claim.

6. I do accept that the parties agreed to divide the chattels on what they determined was a roughly equal basis in October 2017. The argument that the husband is now putting that the division of chattels does not represent equal values is not supported by evidence. I am, therefore, not prepared to make an adjustment in favour of the husband on what he says is an unequal distribution of chattels.

Financial contributions

1. The trial affidavit of the wife sets out the history of the relationship and the details of financial contributions.

2. At the commencement of the relationship, the wife owned a property at H Street, Suburb J, (‘the H Street, Suburb J property’) which was worth approximately $130,000 and secured by a mortgage of around $100,000. In 2005 that property was sold, with a net profit of approximately $20,000. The proceeds of that sale were then put towards the purchase of the former matrimonial home, purchased for around $260,000. The parties were assisted by a loan of approximately $50,000 from the wife's parents.

3. In 2009, the parties purchased (with borrowed funds) an investment property in Town K, Queensland for around $290,000 to $305,000 (‘the Town K Property’). The Town K property was sold in 2015 without profit.

4. In 2010, the parties purchased an investment property in A Street, Suburb B, for $155,000 (‘the A Street, Suburb B property’) with borrowed funds. The A Street, Suburb B property was sold in 2015 for approximately $175,000. The proceeds of sale did not cover the value of the loan.

5. The proceeds of sale of both the A Street, Suburb B property and the Town K property were applied to the respective mortgages on each of those properties.

6. The husband has retained the use of the former matrimonial home since separation. In that time, the wife has been required to make a number of mortgage payments that were not made by the husband.

7. The wife deposes that she spent about $3,000 preparing the A Street, Suburb B property for sale.

8. The husband says that he spent significant periods of time and money bringing the H Street, Suburb J property up to standard for sale, but did not provide evidence of the value of that work.

Future needs

1. The wife is 37 years of age. She is self‑employed as a tradesperson. I accept that she earns approximately $95 per week when she is able to work. She now has five children, following the birth of her second child to her current partner in … 2019, and is not currently working.

2. The husband works as a tradesman and earns $40,000 to $50,000 per annum. The husband gave evidence that the eldest child of the parties’ relationship lives with him. The wife has the primary care of the other two children of the marriage.

Just and equitable division of assets

1. The wife has proposed a division of the assets of the marriage on a 50%-50% basis.

2. This is a manifestly fair and reasonable offer given that she is the primary carer of the parties’ two younger children and that she is without present capacity to earn any significant income. I also note that the husband has not made any payments in respect of child support. At [36] of her affidavit, the wife states:

   Mr Beam has failed to pay Child Support to me, and his only financial contribution to the children since separation has been to pay the sum of $250 towards a school camp on one occasion and approximately $400 towards school fees. Consequently, I have been primarily responsible for supporting the children financially since separation.

3. The minute of final orders proposed by the wife provides for the RACV insurance payment of $63,464 to be paid to the husband. It also provides for the husband to sign all documents necessary to transfer to the wife, at her expense, all the husband's interest in the water licence account number …. In addition to the transfer of the water licence, which has an agreed value of $55,000, the husband is to pay to the wife the sum of $117,950 within 60 days of the date of the orders. This represents a 50% division of the assets of the marriage.

4. The balance of the wife’s proposed minute of orders deals with machinery orders to effect a finalisation of the parties’ financial relationship. These machinery orders contain declarations in relation to D Street, Suburb E (also known as D Street, Suburb E, VIC ( Parish of Suburb J)) (‘the D Street, Suburb E property’) which was purchased for the wife's benefit post‑separation by her parents. This is dealt with at [10] of the proposed minute.

5. The husband has no interest in the D Street, Suburb E property, and it was a property purchased for the wife by her parents post-separation, without any contribution from either the wife or the husband. On that basis, it should not be accounted for in the division of the parties’ matrimonial assets.

6. I note that the husband did not appear at the hearing today. Efforts were made by my associate to call him twice on the telephone, but there was no response, nor did he respond to the call outside of Court. I have sought to take into account the submissions that he made and the matters raised in his affidavit filed on 24 January 2019.

Conclusion

1. Taking into account the matters referred to herein, the minute of final order proposed by the wife is just and equitable. Orders will be made in these terms.

2. I note that the wife, via her solicitors, served a Calderbank offer in this matter on the husband on 28 June 2019, which sets out in a very detailed and comprehensive way the proposals of the wife, the rationale for the proposals and the orders sought by her. The letter represents a boilerplate example of an excellent Calderbank offer. It leaves the person receiving the letter in absolutely no doubt as to what is being offered and why. It is put in plain English and readily understandable by both the legal practitioner and an unrepresented party.

3. In my view, the husband has acted unreasonably in not accepting that offer prior to trial and for those reasons, I make orders that the husband pay the wife’s costs (taxed on scale) from the date the Calderbank offer lapsed.

I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of Judge McNab

Date:  12 November 2019