Bingham and Bingham
[2009] FMCAfam 99
•12 February 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BINGHAM & BINGHAM | [2009] FMCAfam 99 |
| FAMILY LAW – Property – add backs – contribution at date of separation – should there be a Kennon-type adjustment – contribution between date of separation and hearing – section 75(2) adjustment. |
| Family Law Act 1975, ss.75(2), 79(4) |
| Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Kennon and Kennon (1997) FLC 92-757 Norbis v Norbis (1986) 161 CLR 513 |
| Applicant: | MR BINGHAM |
| Respondent: | MS BINGHAM |
| File Number: | SYC 152 of 2007 |
| Judgment of: | Altobelli FM |
| Hearing dates: | 7 February & 18 September 2008 |
| Date of Last Submission: | 6 February 2009 |
| Delivered at: | Sydney |
| Delivered on: | 12 February 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Thomas |
| Solicitors for the Applicant: | Carlisle Attorneys |
| Counsel for the Respondent: | Ms Judge |
| Solicitors for the Respondent: | Dettman Longworth |
ORDERS
The husband and wife are to forthwith do all things necessary to complete the sale of the former matrimonial home in accordance with the orders and notations by consent made by this court on 6 February 2009.
The husband and the wife to do all things necessary to divide the net proceeds of sale between them, as follows, but subject to the matters referred to below:
(a)If the net sale proceeds is $1,222,275, as to the wife $774,389, as to the husband $447,885.
(b)If the net sale proceeds is a different figure then the wife is to receive 60% of the net sale proceeds less the value of all items in her possession and control as determined in the reasons for judgment that accompany these orders, and the husband is to receive the remaining balance.
The husband and the wife are otherwise each solely entitled to the exclusion of the other to all other property and resources in their possession or control.
Each party has leave to re-list before Federal Magistrate Altobelli on
14 days notice as regards the implementation of these orders.
IT IS NOTED that publication of this judgment under the pseudonym Bingham & Bingham is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 152 of 2007
| MR BINGHAM |
Applicant
And
| MS BINGHAM |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for alteration of property interests, commonly known as a property settlement. The proceedings were bitterly fought out between the parties. This case should have settled without litigation. The issues are not complex. It seems that from the parties' perspectives, however, the issues were complex. The hearing commenced before me on 7 February 2008 but was not concluded on that day. On 25 March 2008 I heard and determined an interim application which arose as a consequence of the matter not having been concluded on the hearing date. The second and last day of the hearing took place on 18 September 2008. Before I could deliver judgment there was an application to re-open the evidence that was not resolved until 6 February 2009. Based on the information available to me the parties have expended, between them, at least 10 per cent of their wealth in legal fees.
At the conclusion of the first day of the hearing I strongly suggested to both parties that they should reconsider the positions that they had adopted in the litigation and suggested to them that neither was in fact adopting a realistic position. Of course, I have no idea what offers to settle may have been made in these proceedings. An application for costs may be made, in due course, after I publish these reasons. All I can safely say is that, in my opinion, several days of Court hearing time was spent dealing with a case that should have settled without proceeding to a hearing. There were many other cases in my docket that were, in my opinion, far more deserving of the Court's attention than this one. There has been unacceptable adversarial behaviour in this case. Expectations were unrealistic. The Court hopes that the parties' legal representatives in no way contributed to this unsatisfactory situation.
The husband is the applicant in these proceedings. He is 50 years old, is an [tradesman] by occupation, and lives in a Northern Sydney suburb. The wife is the respondent. She is 57 years old. She is a part-time receptionist by occupation and she currently resides in the former matrimonial home in a Northern Sydney suburb.
The husband and the wife commenced cohabitation in December 1983, married in May 1984 and separated on 18 January 2004. They thus lived together for about 20 years. They have two children, [X] who is 22, and [Y] who is 19. When the husband left the former matrimonial home on separation the children remained in their mother's care till March 2007 when [X] went to live with his father, and then September 2007 when [Y] went to live with his father. I formed the impression that the mother's relationship with her children had either broken down completely, or was under considerable stress. The wife appears to have had difficulty coping, in an emotional sense, with the separation. This may have been contributed to by the breakdown in her relationship with her children, as well as the allegations of family violence that the wife makes against the husband.
Both the husband and the wife came into the marriage with modest assets. They purchased the former matrimonial home shortly after cohabitation and I find that they contributed about the same amount of cash by way of deposit, and then borrowed the balance. As at the date of marriage, therefore, there is no doubt in my mind that their contributions for the purposes of s.79(4) of the Family Law Act were equal.
The husband worked full-time throughout the marriage, and throughout the marriage the wife worked full-time, either in paid employment outside of the home (full-time or part-time) or in unpaid work as a homemaker and parent of the children.
The husband currently works full-time in his employment. The wife works on a part-time basis as a receptionist, currently working 25 hours per week spread over three days. She suffers from some health issues that I will discuss in further detail below.
During the marriage the parties renovated the former matrimonial home. The principal source of funds for this was a bank loan, but, in addition, the wife's parents gifted her $15,000 in 2001, and this was applied towards the cost of the renovations. Whilst I have no doubt that this contribution by the wife's parents was gratefully acknowledged by the parties to these proceedings, the contribution is so small in the overall scheme of things that it has no impact on my assessment of contribution.
The wife nonetheless submitted to me, through her counsel, that her contribution as at the date of separation was greater than that of the husband's, primarily because of his family violence directed towards her. The submission was that her contribution both before and after separation was made more onerous and more significant by the violent and intimidating conduct of the husband. This is a claim commonly known as a Kennon claim, named after the Full Court's decision in Kennon and Kennon (1997) FLC 92-757. This is one of the issues that I will need to decide having regard to the evidence.
The wife also claims that she made a greater post separation contribution because of the fact that she was primarily responsible for the care of the children, and particularly [Y] during his minority. In assessing this claim I will need to take into account the level of support provided by the husband, both directly through child support, and indirectly through payment of the mortgage on the former matrimonial home. I will also need to take into account the fact that the wife has had the exclusive occupation of this home, whilst the husband has paid rental for his accommodation.
There is also a dispute between the parties as to the assessment of the s.75(2) considerations in favour of the wife. The issue is not whether an adjustment should be made, but rather its quantification. This will involve considering all of the matters referred to in that subsection, as well as the evidence about the wife's health.
There are also a number of relatively minor issues about the property pool and valuation. I will deal with these issues below.
Background
The husband filed his application on 10 January 2007. I have already expressed my concerns about the delay in finally determining this matter as well as commenting on the possible causes. On 25 March 2008 I dealt with an application in a case filed on behalf of the husband seeking, in effect, an interim order for sale of the former matrimonial home. I declined that application but made the following orders:
1. The application filed 18 March 2008 is dismissed.
2. Subject to the making of final Orders in these proceedings, the wife be entitled to reside in the former matrimonial home to the exclusion of the husband.
3. The monthly mortgage repayments in relation to the former matrimonial home be met:
(a)Initially from the redraw facility;
(b)After the said redraw facility is exhausted, by the wife.
4. The wife pay Council and water rates.
5. The husband immediately arrange and pay any unpaid premiums in relation to homeowners insurance for the former matrimonial home.
6. Each of the husband and the wife reimburse the other for 50 percent of the monies paid by the other pursuant to Orders 3 and 4 above, such reimbursement to be made from their respective entitlement upon the sale of the former matrimonial home.
7. The costs of both parties are reserved to the final hearing.
NOTATIONS
8. The parties are not precluded from arguing at the final hearing:
(a)The parties respective level of responsibility for the payment of mortgage installments after the date of this Order.
(b)Whether the wife should be responsible for, and repay from her share of sale proceeds, that part of the redraw facility applied to mortgage installments after the date of this Order.
I note that the effect of those orders was that once the redraw facility was exhausted, the wife was to be responsible for the monthly mortgage payments on the former matrimonial home. In addition, order 6 requires a retrospective adjustment to be made to contributions made by the parties to the mortgage, based on the final decision I make. It was common ground between the parties that pursuant to this order she would become responsible to pay for the mortgage from October 2008.
The parties have agreed to the sale of the former matrimonial home and an agreed consent order was made in that regard, after the hearing. For all practical purposes this renders irrelevant some issues that might otherwise have arisen about the valuation that they obtained in relation to the former matrimonial home.
On 6 February 2009 I made the following orders by consent:
1. The Court Notes following definitions for the purpose of these Notations and Orders:
(a) “The home” means the property at Property O (“the home”) Folio Identifier [2].
(b) “The mortgage” means the mortgage to Commonwealth Bank of Australia secured against the title of the home dealing No. [T].
2. The Court Notes the following matters as part of the evidence heard before Federal Magistrate Altobelli in the proceedings presently before the Court pursuant to s.79 Family Law Act, 1975, judgment in which has been reserved.
(a) That the parties have sold the home by contract which sale is due to complete on or about 11 February 2009.
(b) The sale price of the home was $1,395,500.
(c) It is anticipated the payout figure for the mortgage will be about $100,539.
(d) It is anticipated the agent’s costs and commission will be about $34,476.
(e) It is anticipated the conveyancing costs will be about $2,529.
(f) It is anticipated the nett adjustments on sale will be about $450.
(g) It is anticipated the amount available to the parties after all costs and expenses of sale will be about $1,222,275.
3. Order that the Application in a Case filed by the husband on 21 October 2008 be dismissed.
4. Order that there be no Order for costs associated with the Application in a Case filed by the husband on 21 October 2008.
5. Order that the listing on 6 February 2009 be vacated.
Irrespective of the original positions adopted by the parties at the commencement of the hearing, their final positions were communicated to the Court by their respective counsel in closing submissions. On behalf of the husband, his counsel Mr Thomas submitted that contribution at separation was equal, that the husband in fact made a greater post-separation contribution than the wife, to the extent of 5 per cent. However, it was conceded that the wife would receive an s.75(2) adjustment in her favour to the extent of 7.5 per cent. Thus, according to the husband, the final overall split should be 52.5 per cent in favour of the wife.
On behalf of the wife, her counsel Ms Judge submitted that at separation, primarily because of the Kennon claim, she had made a greater contribution than the husband and this should be reflected by the way of an adjustment in her favour in the form of a 55:45 split. It was submitted that the wife made a greater contribution than the husband in the post-separation period, and this would justify a further adjustment in her favour of up to five per cent. Moreover, it was submitted on the wife's behalf that the s.75(2) considerations were up to 15 per cent in her favour. Thus, according to the wife, her entitlement should be up to 75 per cent, again to be applied across both the superannuation and non-superannuation pool.
Both parties agreed that there should be no super splitting order, so that any adjustment in the wife's favour out of the husband's superannuation would be paid out of the non-superannuation assets.
Issues
Having regard to the evidence, the issues that I need to decide are as follows:-
1)A number of relatively minor issues relating to the constitution of the asset pool.
2)An assessment of contributions at the date of separation, particularly having regard to the wife's claim for an adjustment in her favour based on the Full Court's decision in Kennon.
3)An assessment of contribution as at the date of the hearing, taking into accounts claims for post-separation assessment made on behalf of both the husband and the wife.
4)An assessment of the s.75(2) consideration operating in favour of the wife.
5)What is the just and equitable order to make under the circumstances?
Applicable law
The preferred approach to the determination of an application under s.79 of the Family Law Act is set out in a passage found in the Full Court’s decision in Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at 39.
The Full Court states that there are four inter-related steps:
1)Identify and value the property, liabilities and financial resources of the parties; and
2)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
3)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
4)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
One of the legal issues that arises is whether I should adopt a global or asset-by-asset approach to contribution. The authority in this regard is, the High Court’s decision in Norbis v Norbis (1986) 161 CLR 513 per Wilson and Dawson JJ at 534-5. It is clear from this statement of the law that either approach is available to me, in part or in whole. My discretion in this regard should be exercised having regard to the facts of this case.
The final legal issue that arises in this case is that raised by the wife – the extent, if at all, that her contributions were rendered more arduous as a result of various aspects of the husband’s conduct. The authority is the Full Court’s decision in Kennon and Kennon (1997) FLC 92-757. A useful summary of the decision is contained at page 84, 294 of the report:
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party's contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties' respective contributions within s 79. We prefer this approach to the concept of ''negative contributions'' which is sometimes referred to in this discussion.
In the above formulation, we have referred only to domestic violence, for the reasons which we indicated earlier, but its application is not limited to that…
However, it is important to consider the ''floodgates” argument. That is, these principles, which should only apply to exceptional cases, may become common coinage in property cases and be used inappropriately as tactical weapons or for personal attacks and so return this Court to fault and misconduct in property matters ¾ a circumstance which proved so debilitating in the past. In addition, there is the risk of substantial additional time and cost.
However, in our view, s 79 should encompass the exceptional cases which we described above. It would not be appropriate to exclude them as a matter of policy because of this risk. It is a matter of commonsense for the lawyers involved and, where that may not be sufficient, it is a matter for a firm hand by the Court at an early stage when a case appears to raise those issues.
It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect and of necessity it does not encompass (as in Ferguson) conduct related to the breakdown of the marriage (basically because it would not have had a sufficient duration for this impact to be relevant to contributions)…
The passage from the Full Court's decision in Kennon clearly indicates that it is a relatively narrow band of cases to which a Kennon-type adjustment would apply. The Full Court's decision focuses on conduct during the marriage, but not afterwards, which suggests the concept was not intended to apply to post-separation contribution. There is a clear emphasis by the Full Court on the need to establish that the violence had a discernable impact on the contributions made by one party. The focus seems to be on establishing either that there has been a significant adverse impact on a party's contributions, or that their contributions are significantly more arduous than they ought to have been. As I read the Full Court's decision, little or no room is left for inference. The claim can only be established by probative evidence that satisfies the Court on the balance of probabilities.
Issues relating to the asset pool
I find the pool of assets and liabilities to be as follows:
Asset/Liability
Ownership
Valuation
1
Family Home
Joint
$1,222,275
2
CBA Account
H
$2,241
3
CBA Account
W
$182
4
NAB Account
W
$4,502
5
St George Shares
H
$8,085
6
IAG Shares
H
$1,118
7
IAG Shares
W
$1,118
8
Motorola Shares
W
$2,635
9
Telstra Shares
H
$3,750
10
Telstra Shares
H
$1,560
11
Coles Myer Shares
H
$10,500
12
Toyota Camry
W
$4,000
13
Contents
W
$4,250
14
Jewellery
W
$500
15
Tools etc
H
$2,000
16
Property at Bigga
H
$1,000
17
Mercer Super trust
W
$18,914
18
Ausfund
W
$278
19
REST fund
W
$101
20
STA Fund
H
$6,355
21
MLC Super
H
$57,627
TOTAL ASSETS
$1,352,991
22
CGT Liability
H
$1,542
TOTAL LIABILITIES
$1542
NET ASSETS & LIABILITIES
$1,351,449
Superannuation Assets
$83,275
Non-Superannuation Assets
$1,268,174
In relation to item 1, the value of the family home, this figure is in accordance with the consent order made 6 February 2009. It is therefore a net figure after payment of expenses of sale and mortgage.
Items 8 and 10 are conceded as add backs on behalf of the husband. His evidence, which I accept, is that he sold these shares for the purposes of funding a holiday with the two boys and himself, to Thailand. All of the evidence available to me about this issue leads me to conclude that either all of the money for the holiday, or a very substantial proportion of the same, came from the sale proceeds of these shares. Thus, it is appropriate to add it back in the property pool as notional property belonging to the husband. However, I disallow the wife's claimed add back of the cost of the overseas trip. She has not convinced me that it is appropriate and, indeed, to allow her claim would be to compound the effect of the add back concession made by the husband.
The wife had sought to convince me that a further parcel of shares owned by the husband in the St George Bank ought to be included in the asset pool. However, the evidence satisfies me, on the balance of probabilities, that the husband acquired these shares after separation using his post-separation income. Likewise, the wife had sought to include in the asset pool the husband's contents in his current accommodation, but she agreed, through her counsel, that all the evidence indicated that these items were acquired by the husband, after separation, using his post-separation income.
I note that there was some slight changes in the asset pool between the date of the commencement of the hearing in February this year, and the final date in September. For example, the wife had a further $15,000 in savings with the National Bank, but I accept her evidence about the disposal of these funds and otherwise agree that it would not have been appropriate to include it in the asset pool, in any event. Thus, the total pool of assets is $1,352,991.
The amount owed to the Commonwealth Bank, secured over the former matrimonial home, was agreed at $100,539. The parties also agreed that the husband's capital gains tax liability of $1542, arising from the sale of shares, should be included in the pool. The total liabilities, therefore, are $106,542. The pool of assets at paragraph 26 above only refers to the anticipated net value of the home on settlement of the sale.
The net combined pool has a value of $1,351,449. Of this, superannuation assets total $83,275, and non-superannuation assets $1,268,174.
I mention in passing that there was an issue during the hearing about item 17, a property at Bigga. At the commencement of the hearing the wife had asserted that the value of the husband's interest in this property, a property in fact owned by his father, was $10,000. By the final day of the hearing, she had conceded it should only be $1000. One cannot help but wonder whether these proceedings could have been averted if the concessions made by the wife in the closing stages of the final hearing could have, in fact, been made at a much earlier stage in the proceedings.
Assessing contribution at the date of separation
As foreshadowed above, it was submitted on behalf of the wife that she made a greater contribution as at the date of separation principally because of what she considers to be more arduous contribution in accordance with the Full Court's decision in Kennon. I record the fact that insofar as the wife's claim for additional contribution as at the date of separation is based on other factors, i.e., non-Kennon type considerations, I find it has no basis. The husband and the wife cohabited for a period of almost 20 years during which they both worked assiduously, to their capacities, but in different roles. They entered their relationship on an equal footing, and as at the date of separation, apart from the Kennon-type issues, they left their relationship on an equal footing. As I have indicated above, even the $15,000 provided by her parents in 2001, to assist with the renovations to the former matrimonial home, is a contribution through her that is so small that I decline to take it into account under the circumstances.
The wife's Kennon claim seems, on the evidence, to be based on a number of specific incidents that occurred during the marriage, and after separation. However, insofar as her claim is based on post-separation conduct, it does not, in my opinion, fall within the Full Court's judgment in Kennon and I must disregard it. Separation occurred in January 2004. At any stage after then the wife could have commenced proceedings. Her decision not to may well have been influenced by the fact that she was in occupation of the former matrimonial home at no direct cost to her. It was the husband who commenced proceedings, three years later. Insofar as the wife seeks relief for post-separation conduct of the husband, she must look elsewhere, but it is not within the powers of this Court to make a Kennon-type adjustment in her favour, for post-separation conduct.
Focusing, therefore, on the pre-separation conduct, the wife's case seems to focus on three specific events of violence, and some less specific behaviour. She asserts that in 2001, on two occasions, the husband threw the telephone at her, or in her vicinity. She asserts that on 11 July 2002 the husband punched the wife in the mouth. Finally, she asserts that on separation, in January 2004, the husband hit the wife. For present purposes, I am prepared to accept that these events occurred, as alleged by the wife. I note that there is sufficient corroborating evidence in the supporting documents, and the fact is that even the husband makes appropriate concessions about these events. In any event, the fact is that the wife was not cross-examined about these allegations.
The wife also relies on further conduct which she asserts was distressing for her, but which does not amount to violence as such. She asserts, for example, that the husband belittled her, and minimised her role in the family. Whilst she does not use this word herself, on reading her affidavit evidence one is left with a strong impression of the wife's perception of her husband as a misogynist.
At paragraph 100 of her affidavit she describes her reaction to an incident which occurred on 18 January 2004. The wife states:-
I felt afraid and in danger. I feared for my safety. At the time I believing I would not get out of the home alive. I was in shock. [Mr Bingham] walked out of the bedroom and kicked all over the shopping bags which contained rubbish I had collected from each of the bedrooms and the bathroom. [Mr Bingham] kicked them down the hallway and towards the from door and walked out the front door. I rang a domestic violence clinic.
One can only have deep sympathy for what the wife experienced as a result of these events. The husband's behaviour was unacceptable. Even he conceded that during cross-examination. He was not so much trying to justify his actions, as to suggest that, perhaps, the wife's reaction was disproportionate to what in fact happened.
The wife presented evidence in her case of a medical nature, part of which goes to s.75(2) considerations, and part of which goes to the Kennon claim.
There is an affidavit of Ms J that was read in the wife's case. She was not cross-examined. Ms J is a counsellor with Centacare [location omitted], who produces a very short reported dated 30 January 2008 confirming that the wife had been a client of various Centacare services since 2003. The report is of no assistance to the Court whatsoever. It lacks particularity. It reads as if Ms J was providing a report on the basis of her access to the business records of Centacare. Indeed, there is nothing to suggest that Ms J has even met the wife. Accordingly, her report, as brief as it is, is full of conclusions which are unsupported by any evidence and which appear to be no more than the opinion of a non-expert.
The only other relevant evidence is a report dated 4 January 2008 produced by the wife's treating doctor, Dr W. This report was admitted subject to weight. The report clearly does provide corroboration of the wife's assertions of certain incidents of violence. However, it provides much more information about the wife's medical condition and the extent to which it is, or may be, attributable to the violence. At paragraph (c) of her report, Dr W stated as follows:-
Ms Bingham is receiving treatment from me for depression (prothiaden) and for her agitation/disorganisation/difficulty focusing on tasks, tendency to paranoia/insomnia in the build up to court with Zyprexa 2.5mg one nocte.
At paragraph (d) on page 3 of the report Dr W states:-
A constant theme in my initial contacts with her was of her domestic experience of feeling her partner to be aggressive (29/10/02) or that she reported actual physical assault by him (28/1/04) or that she was receiving “harassing” phone calls" (28/1/04, 9/2/04). I considered some of her symptoms to be related to post traumatic stress/domestic violence but her degree of problems with organisation and some paranoia (9/2/04 & 18/12/07) and after discussion with Dr C (Psychiatrist,) I also felt she may have some underlying mental illness.
At paragraph (g), again on page 3, Dr W states:-
The social difficulties arising from Ms Bingham's domestic situation, especially ongoing difficulties in her relationship with her sons and lack of social support and income from a partner, in addition to her emotional and psychological problems in consequence of the difficulties of the last 10 years, mean she is likely to continue to suffer from emotional and psychological problems with periods of increased stress.
Dr W goes on to express the opinion that some improvement in mental health is likely if legal issues are resolved with certainty, though her son's health and mental health will remain a source of concern and distress to her in the future.
Thus, the wife's own evidence creates a much more complex picture of her health, and specifically in this context, whether her health is attributable to her husband's conduct. Whilst all of this material is highly significant in the context of assessing the wife's needs under s.75(2), the present context is different. The focus is on the consequences of her husband's conduct directed towards her. Her own doctor's evidence indicates that the wife has underlying psychological, and possible psychiatric problems that might be attributable to her husband's conduct, but might equally be attributable to the breakdown in the marriage and the subsequent litigation, as well as the breakdown in the relationship with her sons, as well as concerns about her youngest son's mental health.
There is an issue of causation in any Kennon-type claim. The claimant must establish the "course of violent conduct by one party towards the other during the marriage". I am prepared to accept that the evidence, on the balance of probabilities, satisfies me of this. However, the Full Court goes on to say that such course of violent conduct is "demonstrated" to have had a certain impact. The use of the word "demonstrated" clearly illustrates the need for the claimant to establish that a certain impact is causally linked to the violent conduct. The wife's evidence does not so satisfy me. Even if she were to convince me to the requisite standard of the impact on her contributions, I could not be satisfied that this was attributable to family violence because her medical condition was much more complex than to allow that simple causative conclusion.
In any event, the Full Court in Kennon goes on to refer to a course of violent conduct which is demonstrated have had "a significant adverse impact upon that party's contributions to the marriage". There is simply no satisfactory evidence adduced on behalf of the wife which could satisfy me about this, on the balance of probabilities. It is left to mere inference. I am left to infer that because of the husband's course of violent conduct her contribution was made more difficult, or significantly more arduous. I do not think there is any room for inference in a Kennon-type claim. Clearly the Full Court was seeking to limit these types of claims and to avoid opening the floodgates. The Full Court emphasised that these principles apply to a "relatively narrow band of cases". The evidence before me in this case does not establish that there was any adverse impact on the wife's contributions, and even it if did, because of the wife's complex psychological and psychiatric condition, I could not be satisfied that the conduct caused any impact on that contribution.
The wife's claim for a Kennon-type contribution fails. Indeed, on the evidence that has been before the Court since February 2008, the wife's claim was always doomed to fail. I hinted that this might be the case at the close of the first day of the hearing, and encouraged her to reconsider this aspect of her claim. By no means was this a pre-judgment of her case, but merely an encouragement to reality test what she herself was asserting. With great respect to the wife, and to those who represent her, the evidence about the Kennon claim was as clear on the first day of the hearing as it is on the day that this judgment is being dictated. One can only wonder whether this case might have settled at a much earlier stage, and without resort to a hearing, had there been undertaken a more robust assessment of the merits of this part of her claim.
Assessing contribution between separation and the date of the hearing
Both the husband and the wife claim that they made further contribution over and above that made by the other during the four and a half year period since separation. The wife asserts that she had the care of the children, particularly the younger one [Y], between January 2004 and September 2007, when [Y] went to live with his father. She asserts that she did this in difficult financial circumstances and during a period when the husband was not providing an appropriate level of child support, though he may well have been paying the mortgage on the home.
On behalf of the husband it is asserted that he made a significant post-separation contribution to preserving the matrimonial assets by paying the mortgage and thus enabling the wife and the children for a considerable period, to have sole occupation of the home, all at a period when he was paying rental. From September 2007 the husband asserts that he has had the responsibility for providing for both children, but in particular [Y], who was still at school. [Y] turned 18 in August 2007.
There is no doubt that the wife has had the sole occupation of the former matrimonial home. The evidence clearly indicates that the husband was solely responsible for paying the mortgage between January 2004 and the end of August 2007. Indeed, the principal of the loan was reduced by $13,560 during this period, and the husband's total payments amounted to a much, much greater figure.
From the end of August 2007, up until the date of the hearing, the mortgage has been paid out of the parties' redraw facility, and thus, for all practical purposes, their contribution to this is equal.
The evidence before me also indicates that during the period since separation the husband has paid rental totalling $37,830.
The child [Y], who is in the father's care, whilst not technically a child because he has turned 19, is nonetheless fully dependent on his father, as he would be on the mother, if he were living with her. He is currently undertaking his final year's studies at high school.
In assessing whether there are legitimate claims for greater contribution in the post-separation period, one must also take into account the fact that the husband was in a better financial position than the wife. Thus, he had the greater capacity to pay the mortgage, whereas the wife did not. Another relevant factor is this. The wife has taken no steps to initiate proceedings to bring to a head any negotiations that might, or might not, have been taking place about property settlement over the last four years. Even the husband took no action until early 2007. I do not wish to be critical of anyone who seeks to avoid litigation, and I would readily accept that the commencement of proceedings is often with a view to precipitating a settlement, and not necessarily to have a hearing. But in a case like this where the wife, and to a lesser extent the husband, has delayed in commencing proceedings then the Court should not ignore the benefits that each had derived as a result of their inaction. For example, the wife clearly enjoyed the benefit of occupying the former matrimonial home, for the benefit of the children and herself when they were together, and on her own subsequently. Indeed, I formed the strong impression from the evidence she gave in cross-examination that she would be just as content to allow this situation to continue were it not for the pressure that a final hearing brings to bear on a litigant's contemplation of the future. Indeed, I even have evidence about the value to the wife of her occupation of the home. The evidence of the single joint expert indicates that from January 2004 to January 2008 the rental value of the former matrimonial home would have been between $800 and $850 per week. From January 2008 it would be between $850 and $900 per week. The wife was given the opportunity to adduce her own evidence about rental value, but declined to do so. This is evidence before the Court that I cannot ignore, even in a situation where the husband did not specifically press me to quantify the benefit to the wife of her remaining in occupation.
From the husband's perspective, however, his behaviour about the payment of child support up until August 2007 was opportunistic.
He could have done more but chose to adopt a somewhat legalistic approach to quantifying his financial commitment as regards child support.It should not be forgotten that both parents, through their delay, have had the benefit of any increase in the value of the former matrimonial home since the date of separation.
The fact is that both the husband and the wife made contributions in the post-separation period and it is impossible for me to make any assessment of the difference in a quantitative sense of these contributions. Accordingly, whatever contribution they made in this period I will treat as being equal, and make no further adjustment in favour of either of them.
Assessing the s.75(2) adjustment in favour of the wife
On behalf of the husband it was submitted that the s.75(2) adjustment in favour of the wife should be about 7.5 per cent. The wife asserts it should be close to 15 per cent.
The wife is 57 years old, seven years older than the husband. Her working life is, therefore, much shorter.
There appeared to be no relevant health issues affecting the husband. In relation to the wife, I have already discussed the evidence of Dr W in the context of the wife's Kennon claim. Much of that evidence is, however, highly relevant in the context of the wife's s.75(2) claim. She is at least depressed, but possibly suffers more severe psychological and/or psychiatric problems, only some of which might be relieved by the conclusion of the proceedings. Dr W concludes at paragraph (h) on page 4 of the report as follows:-
She is not likely to be financially secure or able to earn a high wage, and is likely to be stressed by too high demands of a workplace. Nonetheless (without knowledge of employer's assessments of her abilities) my impression has been that she has benefited from working part-time and has some skills from previous employment such as typing reports etc.
According to Dr W, therefore, the wife does have a capacity for employment, but not one which would realise a high wage such as to provide her with financial security. Putting aside issues about her capacity for employment, Dr W' report does present a picture of a woman in poor health and who seems to struggle with life for various reasons, only some of which are attributable to the breakdown of her marriage.
On behalf of the wife further evidence was adduced about her health. There was an affidavit of Ms A, a physiotherapist that was read on behalf of the wife. The husband did not require this person to be cross-examined. Ms A is a physiotherapist who provides a short report about a problem that the wife experiences with her anterior abdominal wall. The report was unhelpful because it really did not provide the level of information to be able to assist me to work out whether the health issues are such as to, for example, affect the wife's ability to earn an income. If anything, the report creates the impression that the issue commented on is not serious.
There is also the affidavit of Mr L, a podiatrist. This affidavit was read on behalf of the wife but, similarly, the deponent was not sought to be cross-examined. Again, the report was unhelpful to me in assessing s.75(2) considerations. Insofar as it reports on the problems that the wife has experienced with her feet, for many years, and which has resulted in her wearing orthotics for more than 20 years, it presents a picture of the wife's condition that is expressed in far more measured terms than the wife describes in her own affidavit. The wife is, apparently, a keen dancer, an activity from which she derives much enjoyment. This does suggest, however, that any problems the wife has with her feet are not such as to seriously debilitate her.
Clearly, the more serious medical concerns relating to the wife are contained in the evidence of Dr W.
The wife's age and health obviously reflects on her physical and mental capacity for appropriate gainful employment. She presently earns $643 per week working three days with her current employer. After the wife's cross-examination on the topic of her capacity for employment, I must say I was left with the strong impression that she had been rather selective with her evidence in this regard. Particularly telling in her evidence was her admission that she had applied for a loan to the Commonwealth Bank with a view to either refinancing the loan and borrowing additional funds to buy out her husband, or alternatively to borrow funds to pay the mortgage in accordance with the order that I had made in March 2008. She gave evidence that she made an application to the Commonwealth Bank and had been granted approval for a loan of $100,600. When she was pressed in cross-examination to explain how she would possibly service such a loan having regard to her disclosed income, in my opinion she could provide no satisfactory answer. She did refer to the possibility of borrowing money from her family to assist her in servicing the loan, but this did appear to be an afterthought. I think that the wife has a capacity for employment that exceeds her present capacity, but I am not prepared to hold that this necessarily means she has the capacity for full-time employment. In any event, s.75(2) invites a comparison of the financial circumstances of both parties. The husband earns $1,708 per week, well over twice that of the wife. He will have a much longer working life.
The father does have the care of the youngest child, but that will only be for the next few months.
As there is agreement to sell the former matrimonial home, the mortgage will be paid and the sale proceeds will provide to each of the parties more than enough for each of them to meet the commitments that they have, including any amounts owed to family, and their respective solicitors for legal fees.
This was a long marriage during which the wife was in and out of the paid workforce.
Both parties will need to reaccommodate themselves out of the sale proceeds of the former matrimonial home. The husband has more superannuation than the wife does and will have every prospect of continuing to contribute in a meaningful way towards that.
In assessing contribution I must take into account the actual impact of any adjustment I make. The net pool of assets is just over $1.3 million. If I make an adjustment in her favour of 7.5 per cent this produces a differential of 15 per cent, or $202,000. An adjustment of 15 per cent produces a differential of $405,000. Under the circumstances, I assess the adjustment that ought to be made in favour of the wife at 10 per cent, thus producing a differential of 20 per cent and which I think adequately recognises the health difficulties the wife faces, as well as the issues relating to her age and earning capacity.
Conclusion
Having regard to all of the matters set out above, the wife would be entitled to receive 60 per cent of the asset pool available to the parties. The case of both the husband and the wife proceeded on the basis that this percentage should be applied against all assets, and having regard to the rather modest superannuation pool I agree that that is appropriate. Is this just and equitable under the circumstances? For the reasons that I have set out above, I believe that it is. It provides with sufficient funds for both of them to be able to get on with the rest of their lives, and reaccommodate themselves to a reasonably comfortable standard, although perhaps not to the level of the former matrimonial home.
On the basis that each of the husband and the wife retain assets in their control, and in particular that the husband would retain intact his superannuation entitlement, this would mean that the further adjustment in favour of the wife would take place out of the sale proceeds of the home, subject only to an adjustment to cover the husband's capital gains tax liability. Under the circumstances I think this is the neatest and simplest way to implement the settlement.
I appreciate that the order I made on 25 March 2008 may necessitate a further adjustment between the parties, if they so desire. If that were the case, it would make sense that this further adjustment come out of the sale proceeds.
The intent of these orders is that there be an overall property settlement allocating to the wife 60 per cent of the net assets including both the superannuation and the non-superannuation pool. They would each retain the property in their possession or control. Any adjustment is to be made out of the sale proceeds of the former matrimonial home.
Accordingly, if I accept the parties estimate of the net sale proceeds of the home at $1,222,275, this means the net pool of assets is $1,351,449. If, however, the net sale proceeds are different, the parties will need to make an adjustment having regard to their respective percentages as per these reasons for judgment.
Out of a net pool of $1,351,449 the parties’ entitlements is as follows:
Wife 60%
$810,869
Husband 40%
$540,579
The wife’s assets will consist of:
Commonwealth Bank Account
$182
National Australia Bank Account
$4502
IAG shares
$1118
Motorola shares
$2635
Toyota Camry
$4000
Contents
$4250
Jewellery
$500
Mercer Superannuation
$18,914
Ausfund
$278
Rest Fund
$101
$36,480
In order to make up her entitlement, the wife should recover $774,389 from the sale proceeds.
The husband’s assets will consist of:
Commonwealth Bank Account
$2241
St George shares
$8085
IAG shares
$1118
Telstra shares
$3750
Telstra shares
$1560
Coles Myer shares
$10,500
Tools
$2000
Property at Bigga
$1000
STA Superannuation
$6355
MLC Superannuation
$57,627
Capital Gains Tax
($1542)
$92,694
In order to make up his entitlement, the husband should receive $447,885 from the sale proceeds.
I certify that the preceding eighty-two (82) paragraphs are a true copy of the reasons for judgment of Altobelli FM
Associate: 12 February 2009
Date: Anthony Thompson
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