Bidwell & Bidwell
[2022] FedCFamC1F 315
Federal Circuit and Family Court of Australia
(DIVISION 1)
Bidwell & Bidwell [2022] FedCFamC1F 315
File number(s): SYC 4814 of 2020 Judgment of: MCNAB J Date of judgment: 11 May 2022 Catchwords: FAMILY LAW – PROPERTY - long marriage- consideration of respective contributions- proper treatment of a redundancy payment received post separation- form of orders where order is made for the sale of a property Legislation: Family Law Act 1975 (Cth) s 79.
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 10.17.
Cases cited: Benson & Drury (2020) FLC 93-998; [2020] FamCAFC 303
Docters Van Leeuwen and Docters Van Leeuwen (1990) FLC 92-148
Goudarzi & Bagheri (No 2) [2017] FamCAFC 190
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; [2003] FamCA 395
Horrigan & Horrigan [2020] FamCAFC 25
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Jarrott & Jarrott [2012] FamCAFC 29
Smith and Smith (1991) FLC 92-261
Waters and Waters (1981) FLC 91-019; [1981] FamCA 19
Division: Division 1 First Instance Number of paragraphs: 81 Date of last submissions: 27 April 2022 Date of hearing: 18 October 2021 & 25 November 2021 Place: Melbourne Counsel for the Applicant: Ms Beck Solicitor for the Applicant: Buckley Lawyers Pty Ltd Counsel for the Respondent: Mr Livingstone Solicitor for the Respondent: David H Cohen & Co ORDERS
SYC 4814 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BIDWELL
Applicant
AND: MR BIDWELL
Respondent
order made by:
MCNAB J
DATE OF ORDER:
11 May 2022
THE COURT ORDERS THAT:
1.The Respondent pay to the Applicant the sum of $505,364 (“the payment”) within 30 days of the date of these orders (“the due date”).
2.In the event that the whole of the payment has not been made by the due date, the Respondent is to sign all documents and do all things necessary to transfer to the Applicant the property situate at C Street, Suburb B NSW(“the Suburb B property”) to be held on trust for sale (“the sale”), the Suburb B property be forthwith sold altogether out of Court and upon completion of the sale the proceeds be applied:
(a)firstly to pay all costs, commissions and expenses of (the said Trust, Transfer and) the Sale;
(b)secondly to discharge the Mortgage and any other encumbrance affecting the Suburb B property;
(c)thirdly so much of the Payment as is then outstanding together with interest thereon calculated in accordance with Rule 10.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth); and
(d)the balance to be divided 53.20/46.80 in favour of the Wife.
3.Pending the payment or completion of the sale the Respondent shall not encumber the Suburb B property without the consent in writing of the other party.
4.Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders (the furniture, personal possessions and like chattels in the Suburb B Property being deemed to be in possession of the Husband;
(b)monies standing to the credit of the parties in any joint bank account are to become property of the Wife and Husband;
(c)each party forego any claims they may have to any superannuation benefits belonging to or earned by the other;
(d)insurance policies remain the sole property of the named owner and beneficiary; and
(e)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled to pursuant to these orders.
5.In default of the parties or either of them doing all acts and things and executing all such documents as are necessary to give effect to these orders, a Registrar of the Family Court of Australia at Sydney be appointed pursuant to section 106A of the Family Law Act 1975 (Cth) to execute all such documents in the name of the party in default and to do all such things necessary to give validity and operation to the said orders.
6.That within seven (7) days of these orders the Respondent make available to the Applicant the passport of X.
7.That within seven days (7) days of these orders the Respondent sign all documents necessary to complete a passport application for X.
8.The Wife file any submission and a supporting affidavit regarding costs within 14 days.
9.The Husband file any submission and supporting affidavit regarding costs within 28 days.
10.The question of costs be determined on the papers in chambers.
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
MCNAB J
INTRODUCTION
This proceeding comes before the Court by way of originating application filed on 17 July 2020 by the Applicant Wife to effect a division of property pursuant to section 79 of the Family Law Act 1975 (Cth) (“the Act”).
In this matter, I must make a decision as to how the Wife and Respondent Husband’s property should be divided. The total net asset pool is $1,450,671 including superannuation but omitting any add back contended for by the Husband. The principal asset is the matrimonial home located at C Street, Suburb B, New South Wales (“the Suburb B property”).
The matter was listed for final hearing on 18 October 2021, and returned before the Court part-heard on 25 November 2021. The Wife and Husband were ordered to file and serve written submissions within 14 days of receipt of the single expert valuation of the Suburb B Property. Both parties were represented by Counsel.
The Wife also joined a parenting matter to the proceeding for the purpose of obtaining and renewing the passport of the parties’ child X born in 2008, which is held by the Husband. No other orders were sought by the Wife.
BACKGROUND
The Wife is 53 years old and the Husband is 65 years old. The Wife and Husband commenced cohabitation in 1999 and were married in 2005. The parties separated on 24 March 2016.
The period of cohabitation was approximately 17 years.
The Wife is employed as a professional and currently earns about $105,000 per annum. The Husband is employed as a manager and earns about $140,000 per annum.
CHRONOLOGY (as contented for by the Husband)
The Husband provided to the Court a chronology of events in his outline of case filed 5 October 2021. That chronology sets out the Husband’s claims and as is noted below, many of those claims are disputed by the wife including the quantum of monies said to have been spent by the Husband and the proper characterisation of expenditure. By way of example, where the husband was asserted that he spent money on various items to improve the matrimonial home, the Court has found that they were jointly funded. I set out the chronology as it is in effect a statement of how the Husband puts his case in relation to contribution. The Court does not regard the narrations set out in the document as a statement of found facts and an account of the Wife’s response is set out below. The Husband’s chronology is as follows:
Date Event 1957 Respondent Husband is born. 1969 Applicant Wife is born Early 1999 Husband and Wife meet Mid-1999 Parties commence cohabitation.
At the time of cohabitation:
Husband owns: part owner of property with his former Wife, ‘Suburb D’ property.
Wife owns: no assets of any significant value.
Mid-2001 Husband’s former wife takes out a second mortgage on their former matrimonial home at Suburb D as part of property settlement in the amount of $118,000 which is paid to the Husband. Late 2001 Husband receives $118,000 pursuant to Family Law Property Settlement with former wife. Late 2001 Husband and Wife purchase the Suburb B Property in the amount of $335,000 with the mortgage of $270,000 from E Bank. Husband pays the balance of the purchase price primarily from the property settlement with his former wife in the amount of $13,700 which includes stamp duty of $11,500 on the purchase and $2,200 in respect of conveyancing legal fees.
Wife does not pay any money towards the purchase of Suburb B Property.
In addition to paying for the purchase of the Suburb B Property, the Husband pays air-conditioning in the amount of $11,200 and lighting in the amount of $3,000.
2005 Parties married. Mid-2005 Husband pays for his son Mr F, from prior marriage, a new computer in the amount of $2,298.60. Husband pays child support for his children, Mr F and Mr G from his prior marriage.
Wife does not pay any monies towards the upbringing and education of Mr F and Mr G.
Mid-2006 There is a variation of the mortgage on the Suburb B Property for a further $46,000 which is used to purchase Motor Vehicle 1 for the Wife’s sole use and benefit. The price was $48,000.The Husband paid $2,000 towards the purchase of Motor Vehicle 1 from his own savings. 2008 Child is born.
After the child is born, Wife asks for her mother to relocate from New Zealand to help her in looking after the child. Husband pays for Maternal Grandmother’s airfare and also pays her an allowance of $250 in cash each week for approximately 2 years. Husband also pays an additional $100 to cover Maternal Grandmother’s weekly groceries.
2008 Wife returns to work from maternity leave.
Wife pays the mortgage and Husband pays for all other outgoings including family holidays, family expenses, council and water rates, insurance, electricity, phone and most of the groceries.
Mid-2009 Husband pays for retractable awning in the amount of $2,457 for the Suburb B Property. Early 2010 Husband pays for water filtration for the Suburb B Property in the amount of $2,490. Mid-2015 Parties obtain loan from the H Company for $13,901 for 3 year term. In addition, Husband pay a total of $8,297 in respect of the kitchen upgrade at the Suburb B Property.
Wife makes the initial monthly repayments of $370 for a period of 12 months in respect of the kitchen upgrade and thereafter Husband takes over the repayments for 2 years for the remainder of the term of the kitchen loan.
Late 2015 Husband is diagnosed with medical conditions for which he takes prescribed medication. Early 2016 Parties finally separate.
At the time of separation, Wife’s brother-in-law and others come to the Suburb B Property and remove the white goods and furniture from the home which value approximately $12,000. Husband has to replace the items for his day to day needs in order to live in the home.
Husband continues to pay and take care of the veterinary bills, food for the child’s two pets.
Since separation, Husband pays the mortgage on the Suburb B Property in the amount of $1,752 per month as well as paying for the outgoings totalling $2,454 per month.
Mid-2016 Husband is notified by E Bank that from in or about November 2011 to in or about March 2016, there is an amount of approximately $45,930 withdrawn by the Wife, without his knowledge or consent, as a redraw against the mortgage which had been paid in advance. Husband instructed bank to suspend withdraw facility. Mid-2016 Husband pays Child Support for the child as assessed by Child Support Agency. Late 2016 Wife receives severance payment from her former employer, J Company in the amount of $114,149 which she retains and invests but does not provide financial disclosure about these monies. Early 2017 Parties attend FDRS. Mid-2019 Parties attend FDRS. 18 February 2020 Parties are divorced. Early 2020 to Early 2021 Husband borrows from K Bank in the amount of $15,000 that he combines with savings of $12,000 and $3,000 from his school savings plan along with credit card borrowing totalling $34,950 towards the renovation on the Suburb B Property. 17 July 2020 Wife commences property proceedings. 9 October 2020 Husband files response to Wife’s property application. 2 March 2021 Parties attend Conciliation Conference with Registrar Turner. 9 August 2021 The matter is listed for direction hearing before Judge McNab. 11 October 2021 The matter is listed for Conciliation Conference before a Registrar. 18 October 2021 The matter is listed for final hearing before Judge McNab.
MATERIAL RELIED UPON
In her outline of case filed on 14 October 2021, the Wife said that she relied upon the following documents for the final hearing on 14 October 2021 and 25 November 2021:
(1)amended initiating application filed on 1 October 2020;
(2)affidavit of Ms L filed on 1 October 2021;
(3)financial statement filed on 17 July 2020;
(4)affidavit of Mr M filed on 13 October 2021; and
(5)submissions for the Applicant Wife filed on 1 October 2021.
In his outline of case filed on 5 October 2021, the Husband said that he relied upon the following documents for the final hearing:
(1)further amended response to initiating application filed on 17 September 2021;
(2)financial statement filed 16 September 2021;
(3)affidavit of Mr N filed 17 September 2021; and
(4)submissions for the Respondent Husband filed 17 September 2021.
THE PARTIES’ PROPOSALS
The Wife in her written submissions proposes that a just and equitable division of property would give rise to a 70/30 split in her favour.
The Husband in his written submissions submit that a 65/35 split in his favour would be just and equitable in these circumstances.
THE APPROACH TO APPLICATIONS UNDER SECTION 79
The Full Court in Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 identified a preferred four-step process in property matters under the Family Law Act 1975 (Cth):
(1)to identify the pool of assets and liabilities generally, and usually at the time of hearing;
(2)to assess the relative contributions of both the financial, non-financial, direct and indirect nature as specified by s 79(4) of the Act;
(3)to consider the factors as are relevant contained in s 75(2) of the Act; and
(4)finally, to determine whether the order the Court proposes to make is just and equitable to both parties.[1]
[1] Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC ¶93-143, [39] (Nicholson CJ, Ellis and O’Ryan JJ).
This approach was approved in Bevan & Bevan [2013] FamCAFC 116, where the Full Court of the Family Court of Australia considered the High Court’s decision in Stanford & Stanford [2012] HCA 52.
Stanford requires the following matters to be determined in applications brought under section 79 of the Act:
(a)whether the parties have separated;
(b)the assets and liabilities of each party;
(c)the contributions of each party;
(d)the future needs of each party;
(e)bearing in mind all of the foregoing matters, whether it is just and equitable to make any orders altering the interests of the parties in their property; and
(f)what orders, if any, are just and equitable in all the circumstances of the case.
Stanford does not require these matters to be addressed in any particular order. In most cases, it would seem rational to consider them in the order set out above. It does not seem to me to be possible to determine whether it is just and equitable to make an order altering the parties' interests in their property without the other matters mentioned above having been previously determined. That seems to be clear from the opening words of section 79(4) of the Act, which are that:
In considering what order (if any) should be made under this section in property settlement proceedings, the Court shall take into account [the various matters set out in section 79(4)] …
The approach outlined above is consistent with the decision of the Full Court of the Family Court in Bevan v Bevan (2013) 279 FLR 1; (2013) 49 Fam LR 387; [2013] FamCAFC 116. I note that in that case, the Full Court said at [89]:
In our view, it will be less likely that the separate issues arising under s 79(2) and (4) will be conflated if judges refrain from evaluating contributions and other relevant factors in percentage or monetary terms until they have first determined that it would be just and equitable to make an order.
WHETHER THE PARTIES HAVE SEPARATED
The parties agreed that they had separated.
THE ASSET POOL
For the reasons set out below I find that the total net asset pool is as follows:
Asset Husband Wife Superannuation $406,411 $292,505 Suburb B Property $950,000 NIL Mortgage $198,245 NIL Total $1,158,166 $292,505 Total assets $1,450,671 CONSIDERATION
Whilst this matter does not have any particularly complex factual or financial features, it has had difficult passage up to and through the process of final hearing. One difficulty is the changing position of the Husband in relation to the orders that he seeks the Court to make.
By her Application, the Wife sought orders for the matrimonial home to be sold and the proceeds to be split 70/30 in her favour. The Husband’s response filed on 9 October 2020 had the Husband seeking orders that he pay the wife $200,000 and that she transfer her interest in the matrimonial home to him. This proposal was repeated in a case summary document filed on 25 February 2021 for the purpose of a conciliation conference.
When the matter was listed for a directions hearing before me on 8 August 2021, the Court was told by the solicitor for the Wife that the matter had not resolved at a Conciliation Conference held in early 2021. The Court was advised that the Wife was interested in attending an arbitration to resolve the matter and that if it did not resolve, the next Court event was a directions hearing set to occur on 1 July 2022 at which point it would be put in the list of cases to be heard.
The Court was told by the solicitor for the Husband that the Husband would not go any further to deal with the difference between the parties and that the Husband had given instructions not to go to arbitration. I was informed that the matters in dispute were the treatment of funds brought into the relationship by the Husband, a redundancy payment in the sum of about $114,000 received by the Wife shortly after the parties separated and whether a sum of $45,000, which was said to have been drawn down by the Wife over a five year period during the course of the relationship, should be added back into the asset pool.
Given the limited scope of the matters in dispute I listed the matter for hearing on 18 October 2021 and made directions for the filing of material for final hearing. I made those orders in the expectation that there might be reasonable cooperation between the legal practitioners for the purposes of bringing the matter to final hearing for the benefit of their client.
By an amended response filed on 17 September 2021, the Husband proposed orders that he pay the wife $80,000 which at that point would have represented about 10% of the value of the matrimonial home. That was a derisory proposal.
At the conclusion of the trial the Husband proposed that that the value of the matrimonial home be divided 65/35 in his favour and with the superannuation interests of each party to remain with each respective party.
On 9 November 2020 a joint valuation had been undertaken that valued the property at $800,000. In preparation for final hearing, the solicitor for the Wife proposed that an updated valuation of the matrimonial home be obtained. Given the exponential growth in the value of residential real estate, particularly in the major cities over that period, which growth was a matter of common knowledge, that request was entirely reasonable and necessary, particularly where the Husband was seeking orders based on the value of the property derived from a sworn valuation. Inexplicably, the Husband refused to agree to engage the joint valuer to provide an updating valuation. The only reason proffered was that he (an unqualified person in this regard) did not believe that there had been any increase in the value of the property. This caused the Wife to unilaterally approach the joint valuer to provide an updating valuation. This course was strongly opposed to by the Husband. The updating valuation (prepared by the same valuer who prepared the November 2020 valuation) estimated the value to be $980,000 as at 27 September 2021.
On the first day of hearing, the Court had to deal with an application brought by the Husband to rely on an alternative valuation which he had obtained in response to the valuation from P Company obtained by the wife. That valuation prepared by Mr Q which valued the property as at 15 October 2021 put the value at $875,000. Orders were made on 18 October 2021 in relation to the valuation evidence in the following terms:
1.The Respondent Husband be granted leave to rely on a report dated 15 October 2021 by [Mr R] (“the Second Expert”).
2.Within 7 days, the valuer, [Mr M] and the Applicant’s Wife solicitor must produce all file notes, letters and correspondence in relation to the retainer by the Applicant Wife of [Mr M] to prepare a supplementary report.
3.Within 14 days, [Mr M] and the Second Expert confer forthwith with and that at the end of their conference they produce a joint statement as follows:
a.summarising any significant matter about which they agree; and
b.summarising any significant matters about which they disagree and the reasons for that disagreement.
4.In the event that the experts agree on a value they should notify both parties’ solicitors of that agreement forthwith.
5.In the event that the experts cannot agree on a value then they are to give their evidence in the “hot tub” format – that is at the same time.
6.The Respondent Husband pay the Applicant Wife’s costs thrown away by reason of these orders with the quantum of those costs to be reserved to trial.
7.These proceedings be adjourned for final hearing (part-heard) before his Honour Judge McNab commencing at 10.00 am on 25 November 2021 (with an estimated hearing time of 2 days).
On 25 November 2021, the matter commenced in the expectation that Mr M would give evidence as the solicitors for the Wife had not been advised that the valuers agreed on a valuation. The matter was stood down to make enquires in relation to when Mr M would be available to give evidence in support of his valuation. At 3.07pm an email was sent to the Court from P Company advising that Mr M was not available to give evidence on that day.
The email provided that:
…prior notice that [Mr M] was required at the given date and time was not received, with no fee for him to prepare and appear provided from our organisation”
Our instructions received with associated fee’s [sic] provided were to provide a joint statement.
Both valuers have agreed believing that the value lies at $900,000 and [Mr M] has notified [Mr R] as such in writing. (copied exactly).
An email subsequently provided from [Mr M] to [Mr Q] sent at 1.26pm on 25 November 2021 stated:
After review of your valuation in mind, I agree with the joint statement, can you please advise if you require anything further from me?
Counsel for the Wife raised legitimate concerns regarding the circumstances of Mr M changing his opinion very shortly prior the time that he was scheduled to give evidence, and in circumstances where the Wife could be expected to assume that Mr M had disagreed with Mr Q because he had not advised the Wife or her solicitors that he had agreed with Mr Q regarding the valuation in accordance with the orders of 18 October 2021. Further it was not apparent why Mr M had changed his opinion.
In those circumstances the Court ordered that a further joint valuation be obtained because the valuation evidence before the court was unsatisfactory and it was a matter of significant importance for the parties as it was a valuation of the major asset.
A joint valuation prepared in accordance with the orders of 25 November 2021 by Mr S of T Company, valued the property as at 30 December 2021 at $950,000. That valuation has been adopted by the Court as the value of the property as at 30 December 2021.
Treatment of Redundancy Payment
In late 2016, the Wife received a redundancy payment of $114,490. The Husband submits that this sum should be treated as an asset received and retained by the Wife and taken into account when considering the just and equitable division of matrimonial assets.
Counsel for the Husband submitted by way of written closing submissions that the Wife retained and invested the redundancy funds. It is submitted that the Wife obtained a new role shortly after receiving the redundancy payment which meant that she was able to meet her expenses from the income from her new position without having to reduce the redundancy payment to nil.
The evidence does not support that submission. The Wife gave evidence under cross examination that the new income was not sufficient to cover outgoings. She gave evidence that because of the circumstances in which she left the family home, she left with very little. There was a dispute in the evidence as to whether the Wife fled the family home or whether it was a planned departure. Whether she fled or not, I find that it was not an orderly departure and the wife had significant expenses in setting up a new home. The redundancy payment was received in about late 2016 at which time she had taken out loans to cover expenses which had to be repaid and were repaid from the redundancy monies.
The Wife also gave evidence that the redundancy funds had been spent on living expenses and in support of her sick mother over a two year period through the payment of groceries, rental expenses, and medical expenses to supplement her income (which was, according to her bank statements, where the income was deposited) which was $6,110.00 per month. The Wife was not challenged in cross examination that she financially supported her mother.
I find that that the evidence supports a finding that the redundancy pay should be excluded from the asset pool. I do not accept that the value of that redundancy payment, or a part of it, (in circumstances where no submission was made that part of that payment should be added back) should be considered as an asset presently available for distribution between the parties. The evidence does not support a finding that the expenditure by the wife was wasteful.
Add backs
At paragraph [40] of his trial affidavit the Husband refers to $45,930 which was said to have been drawn down by the Wife from a mortgage facility over a five year period from November 2011 to March 2016. An aide memoire was produced by the Wife, which was initially objected to but subsequently agreed by the Husband. It is a convenient record of the activity on the account. The evidence supports a finding that deposits were made from the Wife’s wages into the account and that monies were withdrawn for living expenses of the parties. The drawdowns totalled $36,340 and deposits totalled $17,200. The Husband does not seek that the sum of the difference of about $19,000 be added back to the asset pool. There was no basis for doing so on the evidence before the Court.
The parties agreed the only assets that ought to be the subject of consideration were the matrimonial home and superannuation. There was a dispute as to whether the treatment of the redundancy payment and the sum of $45,930 referred to in paragraph [40]. I have resolved that dispute by finding that the redundancy payment should not be included in the asset pool. As noted no final submission was made that the $45,930 should be included.
Contributions to the initial purchase of the matrimonial home in 2001
The Husband submits that he has made significant contributions to the purchase of matrimonial property, highlighted by the matrimonial home. He gives evidence that he received monies from the settlement of property matters with his first Wife and the sum of about $118,000 was provided in about 2001 to contribute towards the purchase price of the matrimonial home being $335,000 (with a mortgage in the sum of $270,000).
It is contended that this is a launching pad for the purchase of the home and was contributed in circumstances where the Wife had minimal property at the time of cohabitation. In relation to this submission I note that the contribution was made over 20 years ago and it is not clear precisely how much was contributed.
The difference between the purchase price and the mortgage was $65,000 and the evidence is that the Wife did not contribute to the deposit or stamp duty of $11,500 or legal fees of $2,200 on the purchase. It is accepted that the Husband contributed more than the Wife to the initial purchase of the Suburb B property however that contribution cannot be viewed in isolation from the balance of contributions made by the parties through the course of the relationship: (see Jabour & Jabour (2019) FLC 93-898 at [73]-[87]; Horrigan & Horrigan [2020] FamCAFC 25 at [42]-[48]; Benson & Drury (2020) FLC 93-998 at [35]).
I do not accept that the Husband’s contributions, particularly his initial contribution are such that he is entitled to 65% of the assets. The Husband points to various purchases he says that he made through the course of the relationship, including the purchase of a spa in 2005, a retractable awning in 2009 and a kitchen upgrade in 2015. I find that the purchase of those items which were enjoyed by the parties were funded jointly from the incomes brought into the family by each of the parties. The items may have been purchased in the Husband’s name as he was the person dealing with the particular tradesman or supplier, but the purchase was funded jointly as a result of each party contributing their incomes with the Wife paying the Mortgage and the Husband paying for other outgoings and expenses.
Other Contributions
The Wife submits that an allowance in her favour of 10% should be made to account for her care and contribution to the maintenance of the Husband’s two children from a prior marriage between mid-1999 and 2006. I do accept that the Wife will have made contributions to the care of those children, particularly given that the younger of those children was spending more extended times over school holiday with the parties.
The Wife submits that she made financial contributions to those children through the purchase of computer programs (in the sum of $5,000), however given that finances were shared that was effectively a joint purchase.
The Wife seeks an adjustment to take into account her financial (5%) and non-financial contributions arising from her care of the Husband’s children from a prior marriage. I do accept that the Wife was a primary carer of those children when they were staying with the family and the Husband acknowledged in his evidence her contribution in this regard.
The Husband submits that some account should be taken of the fact that he paid for the Maternal Grandmother’s airfare from New Zealand and paid her $250 per week over two years whilst she lived with the parties and assisted with the care of the child. Given the cost of childcare this would seem to be a beneficial arrangement for the parents. Further I do not accept that it was the Husband’s expense alone given the parties’ shared finances. If he made the payment at a time when the Wife was not working, those expenses are in reality amortised over the course of what was a relatively long relationship.
Post Separation Contributions
The Wife gave evidence that in early 2016 she fled the family home with her son. She says did so to escape family violence where she alleges that the Husband grabbed the child around the neck area and that she was tired of being subject to verbal and emotional abuse. She gave evidence that when she left the matrimonial home she had no other financial support or a place to live. She gave evidence that she borrowed $15,000 via personal loan and a loan from her uncle to pay for a bond on a rental property and to pay for essential items. She also took items from the matrimonial home.
The Husband denies the allegations of family violence and in relation to the Wife’s removal of items from the home asserts that she took more than the Wife says she did. In any case, things were sufficiently fraught that the Wife left with no accommodation organised and had to take steps to arrange to borrow funds. The Husband did not assist the Wife financially to make arrangements to give effect to the separation.
The Wife submits that the Husband has had the benefit of living in the family home with the payment of modest mortgage repayments of $438 per week. It is submitted that he has a higher income ($2,740 per week vs $1,969 per week). It is submitted that these benefits should be reflected in a 5% adjustment to the wife. The Husband submits that the mortgage repayments are in fact large and notes that he has had to meet insurance and maintenance costs whilst remaining in occupation. I do not propose to make in adjustment under this part of the matter.
I take into account that the wife did receive the redundancy payment post separation and used that money towards the costs that she had to meet and this off sets some of the contributions that she was required to made. I will therefore make any adjustment under this head of claim.
Considering all the evidence and the submissions, I find that the parties contributions to the matrimonial property to be equal. Both parents worked throughout the relationship. The Wife was the primary carer for the child and also provided care to the Husband’s children. The Husband made a significant contribution to the purchase of the matrimonial home.
Future needs
The Husband is aged 64 and the Wife is aged 52. The Husband states that he has medical conditions. He gave evidence that he expects to retire in the next 2 or so years. He submits that the Wife is in good health and has a reasonable expectation of a stable, well remunerated employment over the years to come.
The Wife submits that she is the primary carer of the child, who is now aged 14, and will shoulder the financial burden of that (albeit with contributions of assessed child support from the Husband). In relation to the impact of the Husband’s health on his capacity to support his future needs, the Wife says that there is no evidence that his earning capacity is affected by such illness or that his capacity for ongoing work is impacted.
It is submitted further by the Wife that the Husband has not explained how he might afford to retire in two years’ time, particularly given his proposal that he retain the matrimonial home with a mortgage of $200,000, pay out the Wife (on his figures the sum of $141,033) and continue to maintain the home and pay rates and insurance. It is therefore submitted that the Husband is unlikely to retire in two years’ time.
I find that the Wife’s future needs are more likely to be greater than the Husband. While it is hoped that once these proceeding are concluded the child might spend more time with his father (and I note that both parents gave evidence that they wished it to happen), I think it is unlikely that the Husband will assume primary responsibility (including financial responsibility) for the child. The cost associated with caring for child combined with her lower earnings mean that her future needs will be greater.
The Husband presently has a greater earning capacity than the Wife and if he needs to work it he may have to delay his retirement. There is no evidence of an incapacity to work and there is no evidence that he will be unable to continue working for any other reason.
Taking all those matters into account I find that there should be an adjustment of 5% to allow for the Wife’s future needs.
For the reasons outlined above, taking into consideration all the matters canvassed in evidence and submissions, the just and equitable result in this case is for the Wife to retain 55% of the total assets that I have found form part of the matrimonial assets which the parties agree should be the subject of orders.
Passport
The husband made written submissions that:
There is a minor issue concerning travel overseas by the parties’ son, [Name]. However that issue consumed minimal trial time and in light of the child’s age of 14 and the current limitations on travel brought about by COVID was not pressing.
The Wife gave evidence that in mid-2022 there is a family reunion planned in New Zealand which she wishes to take the child to, however that would not be possible at present because the child’s passport is due to expire in early 2022. She gave evidence that she asked the Husband to provide her with the child’s original passport however the Husband has refused and has not allowed her to collect the passport.
When cross-examined the Husband stated that he had no objection to the child going overseas. Counsel for the Husband told the Court that the Husband had no objection to the child travelling overseas “as long as it is to a Hague Convention country and so forth”.
The Court has no idea why this issue of passport was before the Court other than by way of the evidence of the Wife. There was no sensible reason put up by the Husband as to why the child should not travel with either parent whether to a Hague Convention country or otherwise when there is simply no risk identified in any of the material that the Wife will not return to Australia with the child.
Counsel for the Husband commenced asking questions about whether the Wife was prepared to put up a bond of $10,000 to ensure the child returns if one was ordered. There is no basis in the material to presume that the Court would make such an order. The Wife has lived and worked in Australia for more than 20 years. She is currently working in a business with her sister based in Australia. She has given evidence that she wishes to travel to a family reunion in New Zealand with the child. I am at a loss to understand why there has been any opposition whatsoever to their adopting this course and providing the child’s passport to her so that a fresh passport could be obtained in order to enable the child to travel.
I will make the orders proposed by the Wife in relation to the passport.
Form of Orders
In a minute of final orders sought, filed shortly prior to the final hearing, the Wife sought orders for:
(a)the sale of the matrimonial home and with the proceeds to be divided 70/30 in favour of the Wife; and
(b)orders for the superannuation held by the parties in their respective names to be divided or split.
No submission was filed about those orders dealing with a superannuation split in the final written submissions filed by the Wife. The written submissions did not make clear how it was proposed that the superannuation monies be treated. The minute of proposed orders that had been filed left blank the details of the treatment of superannuation.
The Husband submitted that each party should retain their respective superannuation and the balance of the assets (including the redundancy sum of $114,149) be divided 70/30 in his favour.
The Court requested the parties file supplementary submissions setting out the orders that were sought and stating precisely how it was said that the assets should be divided including superannuation.
The Wife filed a revised minute of orders seeking relevantly:
(a)that within 30 days respondent pay the sum of $1,015,469 (“the payment”) being 70% of the total value of the assets including superannuation but excluding the redundancy payment of $114,149 within 30 days; and
(b)that in the event that the payment was not made, the Suburb B property be sold and the Wife be paid the payment together with interest accruing at the rate of 10% per annum from the due date for payment after discharging the mortgage and paying the sale costs.
The Husband raised the orders sought by the Wife would see the Husband receiving less than half than the Wife and also noted that the claim for interest on the rate of 10% per annum was not in accordance with rule 10.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”).
The amount that the Wife sought to be paid represented 70% of the total assets including superannuation. The orders as contended for by the Wife would have her receiving a cash payment representing 70% of the total assets plus have her retaining her superannuation in the sum of $292,505. On the basis of an asset pool of $1,450,671 those orders would have her receiving $1,307,974 and the Husband receiving $142,697.
I presume that the Wife has made an error in the figures in the minute of orders she submitted ought to be made, however I note that no attempt has been made to correct that error once it has been raised by Counsel for the Husband in his submissions.
I will make orders dividing the assets, totalling a value of $1,450,671, 55/45 in favour of the Wife with the result that the Wife receiving $797,869 in total. Given that she keeps $292,505 in superannuation she will receive $505,364 as a cash payment by the Husband, or from the proceeds of the sale if the Husband is unable to raise that amount.
Whilst the Wife had previously sought the immediate sale of the property, given that she now seeks an order for the husband to pay a fixed sum within 30 days I will adopt that proposal. I do so because it takes into account the Husband’s position that he wished to try and retain the home and pay out the Wife.
I agree with the submission of the husband that the appropriate interest rate to apply to the sum ordered to be paid under this judgment is that fixed by rule 10.17 of the Rules.
The orders that I make also provide for the payment of the any outstanding sum upon the sale of the property in accordance with the percentage share that the cash sum of $505,364 comprises the attributed value of $950,000. That percentage is 53.20% of the sum of $950,000. I do this because of the uncertainty regarding the value of real estate. In Goudarzi & Bagheri (No 2) [2017] FamCAFC 190 the Full Court per Thackray, Ryan and Forrest JJ stated at [48]:
The undesirability of making orders which do not account for the possibility of real estate selling for much more or much less than the values relied upon at trial has been consistently discussed in the authorities (Waters and Waters (1981) FLC 91-019, Smith and Smith (1991) FLC 92-261; Docters Van Leeuwen and Docters Van Leeuwen (1990) FLC 92-148; Jarrott & Jarrott [2012] FedCAFC 29. Although these authorities encourage the use of percentages in orders providing for the division of the proceeds of sale of an asset, this should clearly be understood as meaning that the percentage employed should be the same as the overall proposed percentage distribution of the assets. The orders then need to provide for payment by one party to the other (from their share of the proceeds of sale) such adjusting amount as will bring about the desired outcome.
Given this is a case where the asset pool is modest, I have made an order reflecting the views of the Full Court. If the value of the property has increased or decreased then the payment to the Wife will reflect this fluctuation. To do otherwise may result in unfairness to the Wife if the property value has increased and likewise to the Husband if it has decreased.
CONCLUSION
I will reserve the question of costs and make orders for the parties to file written submissions and any supporting affidavits regarding costs of all or parts of the proceedings. I will then determine the question of costs on the papers.
I certify that the preceding eighty-one (81) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McNab. Associate:
Dated: 11 May 2022
4
0