BEASOM & PELLING

[2020] FCCA 2907

FEDERAL CIRCUIT COURT OF AUSTRALIA

BEASOM & PELLING [2020] FCCA 2907

Catchwords:
FAMILY LAW – Property – dispute between de facto parties after very short 2 year relationship – wife contributing proceeds of sale of pre-relationship property ($158,000) to purchase of new home – wife seeking sale of home and return of the $158,000, with any excess divided equally – husband seeking 60/40 division in wife’s favour – clearly just and equitable to make the orders sought by the wife.  

Legislation:

Family Law Act 1975 (Cth), s.75

Cases cited:

Stanford and Stanford (2012) 247 CLR 108

Anson & Meek (2017) FLC 93-816

Baglio v Baglio [2013] FamCA 105

Applicant: MS BEASOM

Respondent: MR PELLING

File Number: DGC 3855 of 2019

Judgment of: Judge Burchardt

Hearing date: 21 September 2020

Date of Last Submission: 21 September 2020

Delivered at: Dandenong

Delivered on: 28 October 2020

REPRESENTATION

Counsel for the Applicant: Mr Ambrose

Solicitors for the Applicant: Ian Brooks

Counsel for the Respondent: Ms Valentine

Solicitors for the Respondent: D M Valentine & Associates

ORDERS

1. The Applicant and the Respondent forthwith do all acts and things and sign all documents as may be required to sell real property situate at and known as B Street, Town C in the State of Victoria (“the real property”)

2. The proceeds of sale of the real property be applied:

   (a)Firstly, the pay the costs, commissions and expenses of the sale;

   (b)Second, to discharge the mortgage and any other encumbrance affecting the real property;

   (c)Third, the balance then remaining be divided:

   (i)As to $158,000 centum thereof, to the Applicant; and

   (ii)The remainder divided equally between the parties.

3. Pending completion of the sale:

   (a)The Respondent have the sole right to occupy the real property;

   (b)The Respondent pay all instalments pursuant to the mortgage and all rates and taxes and like apportionable outgoings of the real property as they fall due;

   (c)The parties hold their respective interests in the real property upon trust pursuant to these orders; and

   (d)Neither party shall encumber the real property without the consent of the other party.

4. Liberty be reserved to either party to apply with respect to the terms, conditions and execution of the sale/default sale.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

DGC 3855 of 2019

MS BEASOM

Applicant

And

MR PELLING

Respondent

REASONS FOR JUDGMENT

Introductory

1. This is a property dispute between two parties who were in a defacto relationship from 2015 until October 2017, or very shortly thereafter.  It is convenient to refer to the parties as husband and wife.  Both parties accept that the relationship lasted for in excess of two years (implicitly at least) because both parties have sought that the party make orders adjusting their respective property interests.  The applicant wife seeks that she be reimbursed the $158,000 that she invested in the former matrimonial home and that upon sale the balance in excess of that sum be divided equally between the parties.  The respondent husband seeks that the be property sold and that the net proceeds be divided 60/40 in favour of the wife.  For the reasons that follow I propose to make the orders sought by the wife.

Agreed or uncontroversial matters

1. The wife was born in 1952 and the husband was born in 1966.  At the commencement of the relationship the wife was living in a home she owned at D Street, Town C which she had owned for six years and had a mortgage on it.  She was working as a health care worker for the Employer E at the time.  Shortly after the respondent commenced cohabitation in 2014 the wife found that she needed a larger property and she sold the D Street, Town C property for $270,000 with settlement in 2016.  The net proceeds of sale were $168,600.  Exactly contemporaneously with the sale the parties bought a new home at B Street, Town C for $360,000.  The wife contributed $149,658 and the balance of the purchase price was borrowed.  There is no direct evidence as to who paid stamp duty and ancillary costs, but I have been told that the wife contributed $9000 towards those on her credit card.  Although the husband has put it that the wife would not have been able to refinance in her own name there is no evidence to support this assertion.  She had apparently had a mortgage on the prior property at D Street, Town C of over $91,000.  The wife has said convincingly in cross examination that she could have refinanced herself and I accept that evidence.

2. The husband, who works as a labourer, apparently earns about $95,000 a year.  The wife retired upon obtaining the age of 65 which of course was in 2017.  Almost exactly at that time it appears that the wife moved into a separate bedroom and although the evidence before me suggests that there may have been some vague attempts at reconciliation thereafter it is plain that the parties did not then thereafter cohabit.  I make this finding notwithstanding that the wife was cross examined about a text message she sent to the husband in May 2018 saying “we are no longer a couple”.  The fact that she sent that message, as she freely admitted, does not mean that the relationship was not at an end in 2017.  In any event the additional seven months would scarcely be of any moment, whichever version might have been correct.

3. Prior to the separation the deal between the parties was that the wife paid the utilities and the husband paid the mortgage.  She says she continued to pay utilities until 2018, when she finally moved out.  This was in January 2018.  The wife bought herself a cabin at the caravan park in Town F with funds from her superannuation. 

4. From the wife’s financial statement it is apparent that the wife has no superannuation left now and to the extent that the husband may have any superannuation, both parties have expressly disavowed any claims in this regard against one another. 

5. From a period not exactly denoted, which only emerged in cross examination, it appears that the husband has had two tenants living in the property paying him $140 each for some time.  The tenor of the evidence suggested that this probably occurred relatively shortly after the wife ceased making her own contributions.  The husband’s evidence was that the tenants paid the utilities.  Given that these utilities amount it would seem to $280 a week, the obvious inference is that the wife’s contribution while she was living in the property was significant. 

6. It should be noted that the parties have filed only the most bare-bones affidavit material all of which is encompassed in these agreed matters.

7. From documents annexed to the respondent’s amended case outline it is apparent that the initial $250,000 borrowings in 2015 were refinanced with G home loans in 2017 into two loans of $35,000 and $215,000 respectively.  As at the end of August 2020 there is $22,800 owing on the smaller loan and $175,600 owing on the larger one.  It is thus apparent that the two mortgages overall have since 2017 been diminished by a combined total of about $53,000. 

Stanford and Stanford (2012) 247 CLR 108

1. The court’s first task is to ascertain the legal and equitable interests of the parties and determine whether a property adjustment is appropriate.  On one view, given the brevity of the relationship, it might be thought that this is not an appropriate case for there to be a property adjustment.  Nonetheless both parties seek it and as a matter of practical politics the matrimonial home will have to be sold.  In these unusual circumstances it is plainly just and equitable that there be a property adjustment. 

The pool

1. The pool relevantly consists of the former matrimonial home and some chattels.  The wife gave evidence about chattels that she says are still in the former matrimonial home and I expect the husband to permit the wife to remove those that he concedes to be hers.  As earlier noted, there are no claims in respect to the parties’ superannuation and it is not put that either of them possess anything else of any realisable value.

Contribution

1. The wife is said to have contributed $158,000 to the purchase of the matrimonial home.  Indeed the sum of $158,658 is expressly conceded in the husband’s amended response and I will accept it.  In circumstances where the relationship lasted for two years (or even if it lasted for two years and seven months to adopt the husband’s position) it is apparent that this is a contribution that must be given great weight.  I have been referred to the case of Anson & Meek (2017) FLC 93-816 (“Anson & Meek”) and have regard to the observations of the full court in that case. Nonetheless I note that in the joint judgement Aldridge and Cleary JJ observed at [179] – [181]:

   In any event, we do not accept that a trial judge, or indeed an appeals court, is obliged to trawl through a slew of cases sighted to them as comparable cases so as to identify a list of factual similarities and differences and then weigh these against the facts in the immediate matter so as to determine whether they are, in fact, “comparable”.  Such an approach is contrary to authority and an unjustifiable burden on trial judges. 

   Finally, for ourselves, we derive no assistance at all from the cases sighted to her Honour in deciding this appeal.

   If the point is that, where there is a short marriage, where there are no children and where the parties contributions to their assets and to the welfare of the family from the commencement of the relationship to the time of the hearing is equal, any disparity in initial contributions is of critical importance in determining the overall contributions of the parties, then such a position is easily arrived at by the application of principle alone.

2. I of course respectfully adopt their Honour’s reasoning and would make the point that in each case it is always necessary for the court to determine on standard property division principles, what the result should be in order to produce an overarching result that is just and equitable.  Each case necessarily turns on its own facts, and the thing that differentiates Anson & Meek from this case is obvious.  In this case the period of time the parties were together was even shorter than that in Anson & Meek where the parties married in 2008 and separated in March 2013. 

3. The husband’s case is that he contributed by enabling the larger loan but as indicated I do not accept that that is so.  The wife’s evidence which I accept was that the deal was that he would pay the mortgage and she would pay the utilities.  Given that according to the husband, whose evidence in this regard I accept, the $280 a week from the tenants only goes to meet the utilities, it is immediately apparent that the division of expense while the parties were in the relationship was indeed equal until she left.  She appears to have continued to pay for some period of time after the parties were separated under one roof and at least until she moved out in January 2018.  Thereafter and for a period not precisely denoted the husband has continued to pay the mortgage and according to him paid all the utilities since late 2019. 

4. It is important to avoid an accounting based approach to these issues of contribution.  On any view of the matter the wife’s contribution of $158,000 was a massive one in the scheme of the ultimate outcome.  Both parties contributed while they were together and since then the husband has paid the mortgage which has undoubtedly reduced the overall amount owing (there are no figures to tell me precisely what the indebtedness was at the time of separation, although as noted above the refinance in 2017 appears to have been exactly the same amount as the original 2015 loan). Since interest rates have been reasonably stable over the last few years and noting the rates of decrease in the mortgage as shown in the exhibits, it seems probable that the diminution in the mortgage has proceeded in a relatively lineal way.  Thus of the $53,000 that has been ultimately reduced in the mortgages effectively all of it has been since the period of separation (noting that the $250,000 was borrowed at the time the relationship came to an end).  I will return to what should be made of this when I come back to the heading of just and equitable.

Section 75(2) matters

1. The wife is substantially older than the husband and lives on the aged pension at a caravan that she owns.  The husband is in what appears to be continuing employment earning about $95,000 per year.  Neither party has pointed to any health issues or other matters that might operate as to their future needs.

Just and equitable

1. I have not allotted percentage adjustments as I have worked through the three steps which are of course a fairly standard approach to property cases.  They are not a catalogue set out in the statute and do not require slavish attention as a catalogue to be observed.  The courts overarching duty is to produce a result that is just and equitable in the particular circumstances of the case.  In my view the first part of the dispute is readily dealt with.  Of course the wife should have her $158,000 back.  That was a discrete sum that she put into a relationship which only just crawled over the two year minimum period.  It would be manifestly unjust for her not to emerge at the end of the relationship with that sum back in her pocket.  The approach for which the husband contends, assuming a rough net equity of some $200,000, would leave her $30,000 out of pocket, surely not a just and equitable result. 

2. So far as the contributions towards the value of the matrimonial home are concerned, it would seem clear that the husband’s were somewhat greater.  He at all times made a far more substantial income than the applicant so far as I am able to say (there is not indicator of the wife’s income in the period 2015 to October 2017).  Nonetheless her payment of the utilities appears to have been a substantial one.  Since the wife moved out the husband has plainly either made or seen to the repayment of the mortgages.  It would seem that taken overall his contribution over the last three years would stand slightly in his favour even though substantial amounts of money were received from tenants. 

3. Offsetting this however is the fact that the wife’s future needs are somewhat greater bearing in mind the significant present disparity in the parties incomes, which it is safe to assume will continue for the foreseeable future.  In these circumstances the wife’s position that the net proceeds of sale should be paid equally to the parties after the $158,000 is repaid is plainly a just and equitable outcome.  Were it necessary to do so (and in my view it is not – see Baglio v Baglio [2013] FamCA 105 at [180] – [181] per Murphy J) I would have allotted the husband a 5% greater contribution towards the ultimate outcome in respect of the matrimonial property and the wife a 10% allocation in her favour in respect of future needs. This of course sets wholly to one side the wife’s enormous contribution to the purchase of the property. I repeat in all the circumstances the wife’s desired outcome is plainly one that is just and equitable. I have drawn orders accordingly..

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Associate: 

Date: 28 October 2020