Bixby and Bixby
[2014] FCCA 1992
•3 September 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BIXBY & BIXBY | [2014] FCCA 1992 |
| Catchwords: FAMILY LAW – Property – application for property settlement – assessment of the asset pool – contributions of the parties – consideration of factors under Family Law Act 1975 (Cth), s.75(2) – whether any adjustment should be made – where parties agree that former matrimonial home should be sold and proceeds divided. |
| Legislation: Family Law Act 1975,(Cth) ss.75, 79, 106A |
| Cases cited: Hickey & Hickey [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143 Peabody & Peabody [2013] FCCA 1980 Stanford v Stanford [2012] HCA 52; (2012) 47 Fam LR 481; FLC 93-518 Townsend & Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 |
| Applicant: | MR BIXBY |
| Respondent: | MS BIXBY |
| File Number: | SYC 4748 of 2012 |
| Judgment of: | Judge Scarlett |
| Hearing date: | 30 April 2014 |
| Date of Last Submission: | 30 April 2014 |
| Delivered at: | Sydney |
| Delivered on: | 3 September 2014 |
REPRESENTATION
| Solicitor for the Applicant: | Ms Nicholls |
| Solicitors for the Applicant: | Fay Marie Nicholls & Associates |
| Counsel for the Respondent: | Mr Cook |
| Solicitors for the Respondent: | M.G. O'Callaghan & Associates |
ORDERS
The Applicant Husband and the Respondent Wife are to do all such things and execute all deeds, documents and instruments necessary in order to submit the property situate at and known as Property N, [N] in the State of New South Wales for sale by private treaty within one (1) month of the date of these Orders.
The listing price for the said property at Property N, [N] aforesaid shall be as agreed between the parties and in default of agreement as advised by an estate agent nominated by the President of the Real Estate Institute of New South Wales.
The parties are to list the property at Property N, [N] aforesaid for sale by private treaty with a real estate agent who carries on business in the [N] area as agreed between the parties and, in default of agreement, as nominated by the President of the Real Estate Institute of New South Wales.
In the event that the property at Property N aforesaid has not been sold within three (3) months from the date of these Orders, then the parties must do all do such things and make all such arrangements as shall be necessary to procure a sale of the said property by public auction upon the following terms:
(a)The auctioneer shall be as agreed between the parties but in default of agreement as nominated by the President of the Real Estate Institute of New South Wales;
(b)The reserve price is to be agreed upon by the parties but in default of agreement as proposed by the auctioneer; and
(c)The parties are to pay all auction expenses in equal shares prior to the auction.
In the event that the property at Property N, [N] aforesaid is not sold by auction or by private treaty within fourteen (14) days after the date of the auction then the parties must do all acts and things and sign all necessary documents and pay all moneys equally necessary to procure a second auction of the said property within a further five (5) weeks at a reserve price set at ten per cent (10%) less than the previous reserve price.
Upon completion of the sale of the property at Property N aforesaid the parties are to apply the proceeds of sale in the following order of priority:
(a)in payment of all costs, commissions and expenses of the sale and any council and water rates and taxes outstanding in respect of the said property;
(b)to discharge the mortgage and any other encumbrance affecting the said property;
(c)as to 55% to the wife; and
(d)as to the remainder to the husband.
If either party refuses or neglects to execute any deed or instrument or sign any document necessary for the operation of the above orders then the Registrar or a Deputy Registrar is appointed under the provisions of section 106A of the Family Law Act 1975 to execute the deed or instrument or sign the document in the name of the party who has refused or neglected to do so and to do all acts and things necessary to give validity and operation of the deed, instrument or document.
The husband is to retain his Toyota Hilux motor vehicle, all his motor cycles and bike trailer to the exclusion of the wife.
The wife is to retain her Nissan X-Trail motor vehicle to the exclusion of the husband.
The husband is to retain all his right, title and interest in the business known as [G] to the exclusion of the wife.
The parties are to retain all bank accounts and superannuation policies in their own name, and all other items of personalty including furniture, furnishings, jewellery and all other items of purely personal use and adornment currently in their respective possession to the exclusion of the other.
The husband is to indemnify the wife and keep her indemnified in respect of the following liabilities:
(a)A personal loan from Mr B; and
(b)A taxation debt owing to the Australian Taxation Office.
The wife is to indemnify the husband and keep him indemnified in respect of the following liabilities:
(a)A personal loan from Ms K and Mr K; and
(b)A car loan from ESANDA; and
(c)Any other debt standing in her sole name.
If either party seeks an order for costs he or she must file and serve an Application in a Case setting out the amount of costs sought together with an affidavit setting the way in which and the basis upon which those costs are calculated within one (1) month of the date of these Orders.
IT IS NOTED that publication of this judgment under the pseudonym Bixby & Bixby is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 4748 of 2012
| MR BIXBY |
Applicant
And
| MS BIXBY |
Respondent
REASONS FOR JUDGMENT
Application
This is an Application for orders for adjustment of property between the Applicant Husband and the Respondent Wife.
The Husband seeks orders that:
a)The parties should sell the former matrimonial home at Property N, [N];
b)The parties should distribute the net proceeds as to 60% to the husband and the balance to the wife;
c)A Registrar or a Deputy Registrar of the Court should be appointed to execute any deeds or documents so as to transfer the Wife’s interest in a property at Property B to the Husband;
d)In the alternative, that the Husband should buy the Wife’s interest in the property for $242,000.00 within 42 days;
e)The parties should divide their furniture equally between them; and
f)The parties should each retain their bank accounts, superannuation entitlements and other items of personalty.
By her Response, filed on16 August 2013, the Wife seeks orders that:
a)The Husband should transfer his interest in the property at Property N, [N] to her within 28 days;
b)She should pay the Husband the sum of $152,000.00 and refinance the mortgage on the property at Property N, [N];
c)Alternatively, the parties should join in the sale of the property and divide the proceeds between them as to 60% to the Wife and 40% to the Husband; and
d)That there should be a splitting order as to the Husband’s superannuation using the base amount of $37,000.00.
However, at the final hearing, the Court was told that the parties had agreed to sell the house and divide the proceeds.
Background
The Husband was born on [omitted] 1966.
The Wife was born on [omitted] 1961.
The parties commenced cohabitation in April 1995[1] or 1 June 1996[2]. Living with them was the Wife’s son from a previous relationship, [Z].
[1] According to the wife
[2] According to the husband
The parties’ son [X] was born on [omitted] 1997.
On 10 February 1998 the Husband sold the home unit in which the parties were living for $225,000.00 and paid out the balance of $110,000.00 owing on the mortgage.
On 20 March 1998 the parties purchased the house at Property N, for $360,000.00 with a mortgage of $280,000.00.
The parties were married on [omitted] 1998.
The parties’ daughter [Y] was born [in] 1999.
The Wife’s son [Z] moved out of the home at Property N.
[Z] died on [omitted] 2002 at the age of 21 years.
The parties separated on 6 August 2010[3] or 5 August 2011[4]. The Application for Divorce gives the date of separation as 5 August 2011.
[3] According to the husband
[4] According to the wife
The parties were divorced on 1 November 2012 by Order of this Court.
After an incident on 7 April 2013 the Wife applied for an Apprehended Violence Order against the husband on 8 April 2013. She did not proceed with the Application and no order was made.
Procedural History
The Wife filed an Application for Divorce on 9 August 2012, returnable before this Court on 20 September 2012. The Application was adjourned to 1 November 2012.
On 1 November 2012 the Court made a Divorce Order, to become effective after a month.
The Husband commenced proceedings by filing an Application for property orders on 27 May 2013, accompanied by an Affidavit and a Financial Statement. The Application was returnable on 5 August 2013.
The Wife filed a Response, an Affidavit in support and a Financial Statement on 16 August 2013.
The parties were directed to attend a Conciliation Conference before a Registrar on 18 November 2013. The parties attended the conference, accompanied by their legal advisers, but no settlement was reached.
The Application was listed for final hearing on 30 April 2014. The parties attended the hearing, accompanied by their lawyers, and gave oral evidence.
Evidence and Submissions
The Husband relied on the following:
a)his Application filed on 27 May 2013;
b)his Financial Statement filed on 27 May 2013; and
c)his affidavit affirmed on 7 April 2014.
The Wife relied on the following:
a)her Response filed on 16 August 2013;
b)her Financial Statement filed on 16 August 2013;
c)her affidavit sworn 10 April 2014.
The parties also relied on a joint balance sheet, which was helpful.
The Husband gave oral evidence and was cross-examined by Mr Cook of Counsel for the Wife.
Similarly, the Wife gave oral evidence and was cross-examined by the Husband’s solicitor, Ms Nicholls.
Mr Cook confirmed to the Court that the parties had agreed to sell the former matrimonial home and split the proceeds of sale in the way the Court deemed just and equitable. He submitted that the Wife has the sole responsibility for the parties’ daughter who needs counselling and assistance. She has booked the child into a private school and will bear most of the expense of the child’s schooling.
It was submitted that the Wife should be entitled to more than 50% of the asset pool and that the proceeds should be divided as to 60% to the Wife and 40% to the Husband.
On the other hand, Ms Nicholls for the Husband submitted that over a 14 year marriage the Husband’s greater original contribution should entitle him to receive 60% of the asset pool. Each parent has one child in his or her care and the subsection 75(2) factors do not favour either party. It is of significance that the Wife has been living in the former matrimonial home for the past four years.
It was therefore submitted that the Husband should receive 60% of the asset pool and the Wife should receive 40%.
The proper approach to determination of a property application
The way a court approaches a property application under s.79 of the Family Law Act 1975 (Cth) is, first of all, to follow the principles set out by the High Court of Australia in Stanford v Stanford.[5] First, the Court must consider the requirement in subsection 79(2) of the Act that prescribes:
The Court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
[5] [2012] HCA 52; (2012) 47 Fam LR 481; FLC 93-518
The High Court held at [37] that the Court must identify the existing legal and equitable interests of the parties in the property. Although s.79 confers a broad power on a court to make a property settlement order, “it is not a power that is to be exercised according to an unguided judicial discretion” (at [38]).
The third principle, and perhaps the most important, is:
…whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial contributions) set out in s.79(4).[6]
[6] [2012] HCA 52 at [40]
Thus, the decision in Stanford means that the Court must consider the requirements of s.79(2) before embarking on the four-step process set out in Hickey & Hickey.[7]
[7] [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143
In Hickey, the Full Court of the Family Court set out a process of four inter-related steps that must be taken by a court when determining a property application:
Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions to the parties…and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters…including…the matters referred to in s.75(2) so far as they are relevant…Fourthly, the Court should…resolve what order is just and equitable in all the circumstances of the case.[8]
[8] [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143 at [39] per Nicholson CJ, Ellis & O’Ryan JJ
It is neither contrary nor redundant to consider again whether a proposed order is just and equitable under s.79(2), because the Court is considering the matter after undertaken the three previous steps referred to in the Hickey decision.
Just and Equitable
The parties have divorced. It is clearly in the interests of both of them to resolve the property issues between them so that they may move on. The former matrimonial home is registered in the names of both parties and there is no issue that the property will need to be sold and the proceeds divided between the parties.
I am satisfied that it is just and equitable to make orders for settlement of property in all the circumstances.
The Property and Liabilities of the Parties
A very helpful balance sheet has been provided to the Court. It has been used to identify and assess the value of the property, liabilities and financial resources of the parties. There are certain amounts of expenditure that are submitted should be added back into the asset pool. One of them is the amount of $8,000.00, representing the value of the Wife’s superannuation, which she cashed in after separation, saying in her oral evidence that the money “went straight to the mortgage”.[9]
[9] Affidavit of Ms Bixby 10.4.2014 at paragraph [51]
This amount should be added back into the pool (Townsend & Townsend[10]; Peabody & Peabody[11]). The Husband also seeks that the proceeds of sale of the Wife’s motor vehicle should be added back into the pool, however, the evidence of the sale is so vague that it is not possible to put a date on the sale or a value on the proceeds of sale.
[10] (1994) 18 Fam LR 505; (1995) FLC 92-569
[11] [2013] FCCA 1980
The only evidence about the motor car comes from the Husband’s affidavit of 7 April 2014, where he deposes:
19. I bought Ms Bixby a motor vehicle a Honda CRV $9,900.00 on or about the year 2000.
20. My understanding is that the wife sold this motor vehicle and purchased another being a Nissan X-Trail.
21. I have no knowledge of what she did with the proceeds of sale of this motor vehicle.[12]
[12] Affidavit of Mr Bixby 7.4.2014 at [19]-[21]
That evidence is insufficient to allow the Court to make any finding about the value of the vehicle to be added back into the asset pool.
Non Superannuation Asset Pool
I find the non-superannuation assets to be:
a)Property N, [N] $820,000.00[13]
[13] Agreed value
b)Husband’s Westpac Bank account $ 500.00
c)Husband’s Toyota Hilux motor vehicle $ 10,320.00
d)Wife’s (boat omitted] and trailer $ 3,000.00[14]
[14] Agreed value
e)Husband’s household contents $ 2,000.00
f)Wife’s household contents $ 5,000.00[15]
[15] Agreed value
g)Husband’s [G] business $ 15,000.00
h)Wife’s Nissan X-Trail motor vehicle $ 17,000.00[16]
i)Husband’s four motor bikes ([X]) $ 3,200.00[17]
j)Wife’s bank accounts Not known
k)Husband’s bike trailer for [X]’s bikes $ 2,000.00[18]
Total $878,020.00
[16] Agreed value
[17] Agreed value
[18] Agreed value
Liabilities
According to the Balance Sheet, the Husband claims as a liability a loan of $20,000.00 from his parents. The Wife neither agrees with nor denies the existence of that loan.
The Husband refers to the loan in his Financial Statement at paragraph [50] as a personal loan from Mr B, presumably his father, with his share being shown as $10,000.00. He does not refer to the loan in either of his affidavits, nor is there an affidavit from Mr B or any document evidencing the loan. The Wife does not refer to the loan in her Financial Statement.
The evidence is insufficient to show that there was a loan to both parties by the Husband’s parents in the sum of $20,000.00, if that is what is claimed. The most that can be said is that there is a personal loan of $10,000.00 from Mr B to the Husband.
The Husband also claims an amount owing to the Australian Taxation Office in the sum of $2,119.00. I note that in his Statement filed on 27 May 2013 the Husband referred at paragraph [54] to an amount of $1,111.00 owing to the Australian Taxation Office “based on 2012 return”, so it is reasonable to infer that the amount of $2,119.00 claimed in the Balance Sheet refers to the husband’s income tax liability for the following financial year.
I find the parties’ liabilities to be:
a)Husband’s personal loan Mr B $ 10,000.00
b)Husband’s tax debt to ATO $ 2,119.00
c)Mortgage to Aussie Home Loans $225,000.00
d)Wife’s personal loan from parents $ 20,000.00[19]
e)Wife’s car loan $ 15,000.00[20]
[19] Agreed value
[20] Agreed value
Total liabilities $272,119.00
By deducting the total liabilities of $272,119.00 from the total of the non-superannuation asset pool, being $878,020.00, I arrive at a net total of $605,901.00.
I find the net total of the non-superannuation asset pool to be $605,901.00.
Superannuation
The Balance Sheet shows a value for the Husband’s superannuation with [W] Super in the sum of $30,283.00, but the Husband gave evidence that he rang the [W] Super Fund prior to the hearing and obtained a figure of $41,400.82 as the current value. I accept that uncontradicted evidence.
I find the parties’ superannuation assets to be:
a)Husband’s [W] Super Fund $41,400.82;
b)Wife’s superannuation added back: $ 8,000.00
Total superannuation $49,400.82
By adding the total of the parties’ superannuation entitlements, namely $49,400.82 (rounded up to $49,401.00), to the total of the non-superannuation asset pool, being $605,901.00, I arrive at a total of $655,302.00.
Accordingly, I find the total net asset pool to be 655,302.00.
The Parties’ Contributions
The Husband claimed in his affidavit an initial contribution of a home unit at [N], which he sold in about 1997 and used the net proceeds of sale of about $80,000.00 as a deposit on the matrimonial home at 30 Property N, [N]. He claimed that the Wife did not contribute towards any of the cost of the purchase of the home, although he concedes that she worked on a part-time basis throughout the relationship.
The Husband claimed that the Wife made the relationship more difficult by her “erratic and unpredictable” behaviour during the course of the marriage, due to her ongoing depression, for which she was on medication.[21] He described in his affidavit that on one occasion after the parties separated the Wife attempted suicide by overdosing on sleeping pills and on another occasion she threatened to harm herself but did not carry out her threat.
[21] Affidavit of Mr Bixby 7.4.2014 at [14]
The parties’ son [X], born on [omitted] 1997, resides with him “and has done so for the most part since separation”.[22]
[22] Ibid at [31]
It is the Wife’s evidence that the parties’ daughter [Y], born on [omitted] 1999, lives with her and has no contact at all with her father.
The Wife claims in her affidavit that her contribution was made more difficult by the Husband’s heavy use of marijuana during the first ten years of the marriage, which would make his behaviour at times “delusional and paranoid” and “very unpredictable”.[23] The Wife also deposed that the Husband always drank to excess and, when drunk, became aggressive and abusive towards her.[24]
[23] Affidavit of Ms Bixby 10.4.2014 at [42]
[24] Ibid at [40]-[41]
The Wife also deposed that the Husband was always abusive towards her son [Z] from a previous relationship and would physically hit him. The Husband would not allow [Z] to visit the other two children at the home and she would have to meet him outside the house.
The Wife deposed that during the entire period of the relationship she worked either part-time or full-time with various employers. She would use the money she earned to pay for the children’s needs and household bills because the Husband never gave her any money from his income.[25]
[25] Ibid at [14]-[15]
It appears that the relationship of the parties lasted for approximately 15 years. Whilst the Husband made the initial contribution towards the former matrimonial home, both parties were employed during the marriage. The Husband’s income has always been modest. He deposed in his affidavit of 7 April 2014:
I have always earned less than $50,000.00 per annum.[26]
[26] Affidavit of Mr Bixby 7.4.2014 at [16]
It seems clear on the evidence that the Wife’s contribution over the term of the relationship, both before and during the marriage, in financial and non-financial terms, should be regarded as approximately equal to that of the Husband.
I am satisfied that the contributions of the parties should be regarded as 50% to the Wife and 50% to the Husband.
The effect of any proposed order upon the earning capacity of either party.
Subsection 79(4) requires, at paragraph (d), that the Court consider the effect of any proposed order upon the earning capacity of either party to the marriage. In my view, the proposed orders will not have any effect upon either party’s earning capacity.
Relevant matters referred to in subsection 75(2)
The Husband’s solicitor has submitted that the subsection 75(2) factors do not favour either party, as both parties are in reasonable health and each party has one child living with them. I do not agree with that submission.
The Husband was born on [omitted] 1966. He is therefore 48 years of age. He appears to be in good health.
The Wife was born on [omitted] 1961. She is now 53 years of age. She does not appear to be in such good health as the husband, as both parties agree that she has suffered from depression requiring medication throughout the term of the parties’ marriage. The Husband asserts as much in his affidavit.
The Husband has a [omitted] business where he earns a modest income which does not, on his evidence, exceed $50,000.00 per annum.
The Wife is training to be a [omitted]. She deposes to an income of approximately $700.00 per week.
The parties’ son [X], aged 16 years and 11 months, lives with the father. On the mother’s evidence he has left school and is currently working as a [omitted].[27]
[27] Affidavit of Ms Bixby 10.4.2014 at [7]
The parties’ daughter [Y], aged 15 years and 3 months, lives with the mother. She is still at school. On the mother’s evidence, [Y] has no relationship with her father and has not seen him for well over a year. She requires counselling for grief and loss.
The mother receives Austudy and Centrelink benefits as well as an allowance from the Department of Family and Community Services as an allowance for caring for a foster child who lives with her.
On the mother’s evidence, the father has re-partnered. There is no evidence that the mother is cohabiting with any other person than her daughter and the foster child.
The Husband pays child support under the Child Support (Assessment) Act 1989 (Cth).
In my view, it cannot be said that the fact that one child of the marriage lives with each parent balances out the s.75(2) factors, as has been submitted on behalf of the husband. [X], who lives with the husband, has left school and is working for wages, even though he is still under the age of 18 years.
On the other hand, the parties’ daughter [Y] has emotional and health problems, is younger and is still at school. She has no contact with her father and thus the Wife bears the entire burden of looking after this child.
Even on a conservative basis, an adjustment of 5% in favour of the Wife is called for.
Just and Equitable
Again, the Court must consider whether the proposed orders are just and equitable. The Wife will receive 55% of the net asset pool and the Husband will receive 45%. Neither party will be able to afford to keep the former matrimonial home at Property N, [N]. They have agreed that it will have to be sold.
The Wife deposed that she will not be able to buy a home anywhere in Sydney and she believes that she will have to relocate to regional New South Wales.[28] She will have to rehouse herself and the child, who will be at school for about another three years.
[28] Affidavit of Ms Bixby 10.4.2014 at [55]
The Husband will be able to retain his [omitted] business so his earning capacity will be unaffected.
I am satisfied that the proposed orders are just and equitable.
Orders to be made
The net asset pool amounts to $655,302.00. 55% of that figure is $360,416.00, rounded down to the nearest dollar. The Wife should therefore receive $360,416.00, although that figure will be affected by the amount of the balance of purchase price of the former matrimonial home.
45% of the net asset pool amounts to $294,886.00, rounded up to the nearest dollar. Similarly, the Husband should receive $294,886.00, but, again, that figure will be affected by the amount of the balance of purchase price of the former matrimonial home.
The Wife will receive the following:
a)(Boat omitted] and trailer $3,000.00
b)Household contents $5,000.00
c)Nissan X-Trail motor vehicle $17,000.00
d)Superannuation added back $ 8,000.00
e)55% of the net value of the balance of the sale price of the former matrimonial home.
She should bear the liability for her car loan of $15,000.00 and her loan of $20,000.00 from her parents.
If the Wife were to receive 55% of the net value of the former matrimonial home, she would in theory receive the amount of $327,250.00, which is very close to the difference between the amount of $33,000.00, being the total of the assets in paragraph 87(a) to (d) above and the amount of her entitlement of $360,416.00, which would give her a notional $327,416.00.
However, there are variables, being estate agents’ fees, conveyancing costs and the amount of the payout figure on the mortgage. Thus, to achieve a just and equitable result, the order should be that the Wife bears her own liabilities and receives an amount equivalent to 55% of the balance of the sale price.
There does not appear to be any utility in making a superannuation splitting order. The Wife had a small amount of superannuation and she chose to cash that amount in in order to meet a liability on the mortgage on the former matrimonial home, as she deposed.
The Husband will retain his superannuation intact, his business, his motor vehicle, the motor cycles and his bank account. Again, an order should be made that he will receive an amount equivalent to 45% of the balance of sale price of the former matrimonial home, whatever that may be.
The Husband, too, should bear the liability for his own debts, being the amount of $10,000.00 to Mr B senior and the Australian Taxation Office.
As it appears that the orders to be made are within the range suggested by the parties’ legal advisers, it appears unlikely that either party will seek an order for costs. However, there may be matters under s.117 of the Family Law Act of which I am unaware, and if either party seeks an order for costs, he or she will need to file and Application in a Case and a supporting affidavit within one month of the date of the orders.
I certify that the preceding ninety-four (94) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Associate:
Date: 3 September 2014
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