Bigelow & Reuter
[2006] FamCA 1455
•20 DECEMBER 2006
FAMILY COURT OF AUSTRALIA
| BIGELOW & REUTER | [2006] FamCA 1455 |
| APPEAL – Against decision of Federal Magistrate on property matters – Short childless marriage – Federal Magistrate awarded husband 80% of asset pool based on his greater capital contribution – Federal Magistrate was dismissive of wife’s allegations about the use to which the husband’s monies were put – A significant amount of money brought in by the husband used for his own purposes rather than for the benefit of the marriage partnership – Lack of evidence about the wife’s non-financial contributions – Federal Magistrate placed too much emphasis on the disparity of income between the parties – Nothing to indicate the wife was not pulling her weight in terms of effort – Appropriate finding on contributions should be 70% in favour of the husband – No adjustment for s75(2) factors. |
| Family Law Act 1975 (Cth) |
| APPELLANT: | MS BIGELOW |
| RESPONDENT: | MR REUTER |
| FILE NUMBER: | LNM | 321 | of | 2005 |
| APPEAL NUMBER: | SA | 43 | of | 2006 |
| DATE DELIVERED: | 20 DECEMBER 2006 |
| PLACE DELIVERED: | Melbourne |
| JUDGMENT OF: | THE HONOURABLE JUSTICE KAY |
| HEARING DATE: | 20 DECEMBER 2006 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 30 JUNE 2006 |
| LOWER COURT MNC: | [2006] FMCAfam 387 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | IN PERSON |
| SOLICITORS FOR THE APPELLANT: |
| COUNSEL FOR THE RESPONDENT: | MS TREZISE |
| SOLICITORS FOR THE RESPONDENT: | AT LEGALS |
Orders
The appeal be allowed.
That order 2 of the orders made by Roberts FM on 30 June 2006 be varied to read as follows:
"That on or before 28 February 2007 and contemporaneously with the transfer referred to in order 1 hereof, the husband, by his agents, register a Partial Discharge of Mortgage executed by an authorised officer of ANZ Banking Group Ltd releasing the Wife from all liability pursuant to registered mortgage number […] as security against the title of the former matrimonial home and pay to the wife the sum of $17,400."
That order 9 of the orders made by Roberts FM on 30 June 2006 be set aside.
The usual order as to cost certificates to both parties.
That order 1 be varied to replace the words "within 30 days" with the words "on or before 28 February 2007".
That the security provided by the wife for the costs of this appeal now be released to her.
IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as Bigelow and Reuter
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SA 43 of 2006
File Number: LNM 321 of 2005
| MS BIGELOW |
Appellant
And
| MR REUTER |
Respondent
REASONS FOR JUDGMENT
This is an appeal against a judgment of Roberts FM which was delivered on 30 June 2006 in property proceedings between Ms Bigelow and Mr Reuter. As they have been married it is convenient to refer to them as husband and wife, although I am not quite certain of their current marital status.
They commenced cohabitation in August 2000, the husband being aged presently 32 and the wife 40. They married on 2 November 2002 and separated on 17 June 2005, so they spent something less than five years together. Their cohabitation was punctuated by some periods of separation.
The Federal Magistrate set about determining an asset pool, about which there is no issue in the appeal before me, and then looked at questions of contribution and other adjustments to be made under s 79(4)(e) of the Family Law Act1975 (Cth) before reaching a conclusion as to the division of the asset pool.
The asset pool was set out at pars 36, 37 and 38 of the reasons for judgment of the Magistrate as follows:
The asset pool
I have resolved the issues in dispute between the parties in relation to the assets and liabilities, so the asset pool is as follows:
The property
$142,000
Holden Commodore
$3375
Ducati motorcycle
$7000
Husband's savings account
$5
Husband's GIO superannuation
$15,320
Husband's MTAA superannuation
$5501
Husband's chattels
$5,115
Toyota Corolla
$13,500
Horse float
$1,000
Horse
$1,000
Wife’s savings account
$5,112
Wife’s Hostplus superannuation
$305
Wife’s chattels
$3,055
Total
$202,288
Of those, the husband retains assets to the value of $178,316 and the wife retains assets to the value of $23,972.
The liabilities are:
ANZ Mortgage
$49,722
Capital Finance loan
$9,164
Husband’s Citibank credit card
$3,492
GE Finance
$2,628
Wife’s Commonwealth credit card
$244
Total
$65,250
The most significant of those assets is the real estate owned by the parties at in Tasmania, which has equity of around about $90,000 or slightly more. The husband has superannuation worth about $15,000, a motor vehicle of small value and a motorcycle of $7000. As can be seen from the list of assets, there are presently standing to the wife's credit assets to the value of about $24,000 and to the husband's credit assets to the value of about $180,000.
The issue of how much the husband should be providing to the wife for her interest in the matrimonial home has dominated the proceedings.
The orders of the Federal Magistrate were that the asset pool be divided as to 80 per cent to the husband and 20 per cent to the wife, leading to a payment required by the husband $3700. The wife had at trial sought an order for $50,000 but in this appeal she seeks a payment of $30,000.
The wife came into the relationship with assets worth about $10,000. She had some liabilities that were paid out by her husband from a former marriage.
Shortly after the relationship commenced, the husband received some significant sums of money. His father provided him with $9000 in June 2000, $11,000 in August 2000, $78,581 in September 2000 and $10,361 in March 2001, a total of $108,942. In addition, he received by way of settlement from a previous marriage $73,075. Thus there was total cash brought in by the husband that exceeded $180,000.
By the end of 2001, however, within some 18 months of the money having been received by the husband it was all gone, and much of the trial centred around exploring where it had all gone to. The solid assets that were visible by the time the search party had returned back to base, so to speak, was that $50,000 had found its way into some real estate purchased by the parties at C in New South Wales, with the advantage of some borrowings from a bank, and that some of the money had been accounted for in expenditure on motor vehicles.
$27,000 was spent by the husband in acquiring a Commodore car which was subsequently damaged in an accident and then involved perhaps at least $5000 on repairs. It was ultimately traded in on a Landcruiser for another $8750. So that explained at least $40,000 of the $180,000, in motor cars for the husband, if not more. As I have already said, $50,000 went on real estate and $7000 went on a Honda motorcycle and $3500 went on a car for the wife.
Throughout some of this period at least, both of the parties were working. The items that I have already identified demonstrate where $100,000 of the moneys went to. Another $80,000 was simply absorbed in what the husband tried to describe as a “high-maintenance girlfriend” but gave no examples of what that meant. It was taken by all involved in the proceedings down below to be some snide reference of the expenditure required, supposedly to meet the wife's demands.
It is the wife's case that the money was gambled or drunk away by the husband. The husband denied it, but there was some fairly clear evidence in the bank statements that the husband was regularly to be seen at a Business and Sports Club and was regularly making a number of small withdrawals from the cash machine at the site all on the one night. I have not done the mathematics of it, but it certainly runs into several thousand dollars that can be demonstrated to have been taken from the ATM at the Business and Sports Club.
The Federal Magistrate was somewhat dismissive of the wife's claim that the husband had been wasting the asset pool in drinking and gambling and described it this way:
58.I turn now to the question of whether that assessment of contributions should be affected by the wife’s allegations against the husband in relation to gambling and drinking, which the husband denies. In essence, I see that as an allegation by the wife of a negative contribution by the husband.
59.The wife called no other witnesses to corroborate what she said about gambling and drinking, and one must presume that there would have been witnesses if the husband was gambling and drinking to excess in public places.
60.The husband was cross-examined about his withdrawals of cash at hotels and clubs. He did not deny any of those, but it would appear that he treated pubs and clubs as his bank. Many people these days treat ATM machines wherever they are, or “cash-out” outlets at supermarkets and the like as their methods of banking.
…
62.Having heard the evidence, I am not satisfied the husband's drinking and gambling was of such significance that I should treat them as negative contributions.
I must say that the statement that many people these days treat ATM machines as a method of banking stretches the imagination when the material clearly shows, as I have indicated, on several days many withdrawals from the one machine, all within a short period of time and all at a site where there are poker machines. I think the only reasonable conclusion that could have been drawn was that drawings at the Business and Sports Club, where there are successive drawings, were utilised for the purposes of the husband's gambling and that there was more to the wife's complaints about the husband's gambling than the Federal Magistrate gave reasonable attention to.
The amounts as I have indicated may not amount to much, but they certainly amount to more than the Federal Magistrate reasonably paid attention to. Indeed, bearing in mind that the findings are that the husband was in constant employment throughout much of the relationship, earning something like 30 or 40 thousand dollars a year, I find that there is really unexplained something like 70 or 80 thousand dollars of the husband's capital which has gone without any reasonable explanation.
One ought to have reasonably drawn, on the evidence, a conclusion that that money was utilised by the husband basically for his own endeavours. He is perfectly entitled to do that and nobody can complain about it in terms of the determination of the division of the current asset pool, save to say that when one then looks to the contributions that are required to be looked at under s 79 towards the acquisition, conservation and improvement of assets and towards the marriage partnership as a whole, it would be inappropriate in my view to give credit to the contributions simply by looking at what cash each of the parties started with. What is required is to look at the contributions that ultimately found their way towards the mutual benefit of the parties or to the acquisition of the asset pool as it reasonably stands.
The other feature of the acquisition of the asset pool as it presently stands is that the NSW house was eventually sold. The parties relocated down to Tasmania from New South Wales. They there acquired the real estate, which is the subject of the proceedings, in, Tasmania. They bought it for a very modest sum indeed and then carried out significant renovations to the property.
It was the wife's case at trial that she had physically been a significant contributor towards the renovations, as had her father. Those contributions needed to be tempered by the fact there was on site a builder who was paid from the moneys either borrowed jointly from the parties or that came from the sale of the NSW property which made a profit for the parties in the sense that the $50,000 that the husband put in turned itself into something like $90,000 that he was able to take out when the property was sold.
The difficulty with the wife's case on contribution towards the renovations and improvement, which is acknowledged by her before me, is that the evidence that she sought to rely upon before the Federal Magistrate, at least in the affidavit form, was very scant indeed. She simply said that she worked on the property. I do not want to belittle her work because one of the findings of the Magistrate is that she was capable of carrying out some hard work on the property, but I do not have the advantage of her oral evidence, she having acquired only the transcript of the husband's cross-examination.
So when the Federal Magistrate dealt with the contributions towards that property, he dealt with it rather by saying that each of the parties tried to minimise the other party's contribution but they had been unsuccessful in so doing. He did not identify what it was that they actually did on the properties other than in one sentence where he said:
I am satisfied that each worked according to their abilities in relation to the renovation of the home.
He is a bit critical of the other evidence - and I think appropriately - of the work that the wife's father did, not in criticising the effort of the wife's father but in saying that the evidence that was provided does not really assist the Court.
52.The wife’s father also contributed some of his labour to the renovations and improvement of that home. In paragraph 5 of the wife's father’s affidavit, he says:
I principally worked as a labourer with Mr [F], the builder. I assisted with demolition work, building work, framework, roofing work, foundation work, digging of trenches for pipes and laying of pipes for stormwater drainage. I was not paid for any of these works and gave my time free of charge.
53.In my view that is the only paragraph in the whole of the affidavit by the wife's father that assists the court. The rest of his affidavit is generally hearsay, opinion that he is not qualified to give or is evidence that is not relevant.
54.I also point out that the wife's father does not say for how long he did those things set out above. He says he gave his time free of charge, but he does not say how much time it was. There is no quantification or valuation of the wife’s father’s labouring efforts and I conclude that it was not of any significant value in terms of the total value of the property.
55.I also note that the husband says that the work done by the wife’s father was in return for his respraying of the wife’s father’s motor home. The wife’s father says it was not, although he does concede that the work was done. The dispute is whether it was in return for the respraying or not. I conclude that while there may have been no formal quid pro quo agreement, each was essentially doing for the other the sort of favour that I would have thought that sons-in-law and fathers‑in‑law generally do for each other.
That being so, having determined that the contribution of the parties emanated from the husband's capital but was contributed to by the physical effort of both of the parties, the husband's income during the marriage and the wife's income during the marriage in the work that she did, the Federal Magistrate concluded that the capital contribution should be seen as 95 per cent favouring the husband and that the in-marriage contributions should be seen as 70 per cent favouring the husband because of his greater earning capacity in the course of the marriage, leading to an overall assessment contributions at 80:20.
Having already indicated that I think that the Federal Magistrate is in error in providing too great an emphasis on the cash that the husband commenced the relationship with, I think there is also an error in relation to the placing emphasis upon the income-earning inequalities of the parties during the course of their relationship. The wife is semi-skilled. Her work has been of providing, amongst other things, massage services. The husband unkindly sought to describe her in his material as working as a prostitute when he met her. The Federal Magistrate made no findings about that matter and nor do I think that it is a relevant issue.
What was the relevant finding is that the wife, whatever she was doing in the course of the relationship, was not able to earn money at the same rate that the husband was able to earn, but there is nothing to indicate that she was not pulling her weight in terms of effort and endeavour. In the circumstances, my view is that the Federal Magistrate erred in his measure of the contributions that each of the parties has put into this relationship.
I think that a more reasonable outcome - bearing in mind the large differential in capital together with the difference in income, but the lesser emphasis to be placed on that difference because of the effort that should have been properly given to the endeavours of the parties in the construction and accumulation of the assets, particularly the asset that ultimately represents the bulk of the pool - should have seen a division of the pool in the ratio of 70 per cent to the husband and 30 per cent to the wife rather than the conclusion that the Federal Magistrate reached.
I agree with the findings of the Federal Magistrate that there were no s 75(2) factors that would have led to a further adjustment being made. The wife does have an earning capacity, as does the husband, she having worked as a security officer, a builder's labourer, a resort cleaner, an industrial cleaner and a home-based massage therapist, plus she was in a new relationship. Nothing about the matters otherwise in s 75(2) would lead me to make a further adjustment to the wife, even though there is a capital disparity as a result of the proposed orders.
Returning then to the pool of assets as found by the Federal Magistrate, which are not the subject of any dispute before me, on a net pool of $137,038, if the wife is to receive 30 per cent her entitlement is $41,111.40. She already retained $23,728. It would leave a balance of $17,383.40 which for convenience I shall round up to $17,400. What I propose is that the appeal in relation to the property orders be allowed and that par 2 be varied by substituting the sum of $17,400 for the sum of $3700.
In the matter of Bigelow v Reuter, appeal SA 43 of 2006, I make the following orders:
1. The appeal be allowed.
2.That order 2 of the orders made by Roberts FM on 30 June 2006 be varied to read as follows:
"That on or before 28 February 2007 and contemporaneously with the transfer referred to in order 1 hereof, the husband, by his agents, register a Partial Discharge of Mortgage executed by an authorised officer of ANZ Banking Group Ltd releasing the Wife from all liability pursuant to registered mortgage number […] as security against the title of the former matrimonial home and pay to the wife the sum of $17,400."
3.That order 9 of the orders made by Roberts FM on 30 June 2006 be set aside.
4.The usual order as to cost certificates to both parties.
5.That order 1 be varied to replace the words "within 30 days" with the words "on or before 28 February 2007".
6.That the security provided by the wife for the costs of this appeal now be released to her.
I certify that the preceding Twenty Nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kay
Associate:
Date: 30 January 2007
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