Blainey and Blainey

[2009] FamCA 1213

FAMILY COURT OF AUSTRALIA

BLAINEY & BLAINEY [2009] FamCA 1213

FAMILY LAW – PROPERTY SETTLEMENT – Just and equitable – assets acquired post separation

Family Law Act 1975 (Cth)

Chorn and Hopkins (2004) FLC 93-204

APPLICANT: Ms Blainey

RESPONDENT: Mr Blainey

FILE NUMBER: SYF 4105 of 2005

DATE DELIVERED: 7 December 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Justice Fowler

HEARING DATE: 5-6 November 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Anderson

COUNSEL FOR THE RESPONDENT: Mr Gilbert

Orders

1. Within thirty five (35) days husband pay to the wife the sum of $688,339.56.

2. Upon the payment of the sum referred to in Order 1 herein, the wife do all such acts and things as may be necessary to transfer to the husband all her right, title and interest in and to the property situate at and known as E property in the State of New South Wales (“the former matrimonial home”).

3. Contemporaneously with the payment referred to in Order 1 the husband do all acts and things necessary to discharge the mortgage secured on the title of the former matrimonial home or otherwise remove the wife as a mortgagor and procure a release from the mortgagee in favour of the wife and keep indemnified the wife against all monies secured by such mortgage.

4. In the event that the sum referred to in Order 1 is not paid within the time limited, and absent any agreed extension thereof, the husband and wife are to do all acts and things to place on the market for sale and sell the former matrimonial home by public auction for the best price reasonably attainable, with a real estate agent as agreed or failing agreement as determined by the President of the NSW division of the Australian Property Institute with the proceeds of sale to be distributed in the following order and priority:

   (a)       in payment of all costs and expenses associated with sale

   (b)       in payment of all mortgages

   (c)       in payment of the amount owing to the wife under Order 1 and

   (d)       in payment of the balance then remaining to the husband.

5. The wife do all things necessary to transfer to the husband all her right, title and interest in and to the SeaRay Boat and the Formula Boat and to the proceeds of sale of the SeaRay Boat.

6. Within twenty one (21) days the husband and wife are to do all acts and things necessary to agree on the transfer to the wife of half of the furniture and chattels (“the contents”) which remained in the former matrimonial home at the date of separation.  In the event the parties are unable to agree as to such distribution then the following is to occur:

   (a)Within a further seven (7) days the wife shall prepare two lists of such contents of approximately equal value and submit those lists to the husband’s solicitor.

   (b)The husband shall then advise the wife’s solicitor within a further period of seven (7) days as to which list of contents he wishes to retain.

   (c)The husband shall within a further period of fourteen (14) days allow the wife or the wife’s agent access to the former matrimonial home to collect the contents on the list not nominated by the husband and the wife shall retain absolutely the contents contained on that list.  The husband shall be absolutely entitled to the contents contained on the list selected by him.

7. Unless specified in these orders, each party is otherwise entitled to retain absolutely to the exclusion of the other all property of whatsoever nature or kind and including superannuation interests owned by that party and held in the name or possession of that party as at the date of these orders.

8. If either party refuses or neglects to sign within fourteen (14) days of a written request to do so any documents necessary to effect the terms of these Orders, the Registrar of the Sydney Registry of the Family Court of Australia is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act 1975 to execute such documents on behalf of such party.

9. Leave is granted for either party to restore on seven (7) days notice in the event of any difficulties in relation to the implementation of Order 4 herein.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 4105  of 2005

MS BLAINEY

Applicant

And

MR BLAINEY

Respondent

REASONS FOR JUDGMENT

Introduction

1. The proceedings before the court are proceedings in which the parties seek an alteration of their property interests and a settlement of property.

Background Facts

1. Where in this judgment I make statements of fact they are, unless otherwise specified, my findings of fact.

2. In 1943 the husband was born and he is now aged 66 years.

3. In 1944 the wife was born and she is now aged 65 years.

4. In 1967 the wife’s son by her first marriage was born.

5. In 1967 the husband’s first child of his first marriage was born.

6. In 1968 the wife’s second child by her first marriage was born.

7. In 1969 the husband’s second child by his first marriage was born.

8. In 1971 the husband’s third child by his first marriage was born.

9. In 1973 the husband’s fourth child by his first marriage was born.

10. In 1975 the parties commenced cohabitation.

11. In 1976 the parties were married.

12. In 1977 the parties’ first child was born.

13. In November 1978 the parties purchased their first home at C for $52,000.

14. In 1981 the parties’ second child was born.

15. In 1989 the parties sold their property at C for the sum of $415,000 and purchased a property at E for the sum of $600,000.

16. In June 2003 the parties separated for a period of four months.

17. On 21 May 2005 the parties separated on a final basis with the wife leaving the matrimonial home and the husband continuing to live in that property.

18. On 4 October 2005 these proceedings were commenced.

19. In January 2006 the wife’s father died and under the terms of his will the wife inherited his home unit at M.

20. In May 2006 Probate was granted of the wife’s late father’s will to the applicant wife.

21. On 18 July 2006 a Decree Nisi for the dissolution of the parties’ marriage was pronounced.

22. In September 2009 the husband received a compensation payment of $223,000 net for injuries sustained in an accident and from those monies repaid the sum of $55,000 to a friend, in repayment of funds borrowed to sustain himself and to meet his expenses.

23. The wife procured a “reverse mortgage” on her apartment inherited from her father post separation to provide monies some (at least $55,000 plus) of which was used to sustain her and pay her reasonable expenses.  An amount of approximately $120,000 was applied to other matters including, in particular, the renovation of the bathroom and kitchen in her apartment at M and the payment of a special levy for the renovation of the lift in the building.  Interest accrued on that mortgage which was added to the capital sum owing and not paid.

24. The “reverse mortgage” was subsequently discharged and a non-reverse mortgage was taken out for the sum owing.  This occurred when the wife was approached by her son to provide a second charge security for certain advances made to the son to enable him to capitalise a business.

25. The wife’s evidence is that the interest payable under her replacement mortgage has been met by her son on an interim basis pending property settlement and that it is her intention to repay him the amount paid by him for that interest on the procurement of the proceeds of this litigation.

26. The wife has suffered from depression and anxiety and is presently under treatment for her continuing anxiety but has managed, she says, to cope with her depression without medication.  She has not worked and the husband says that it is unlikely that she will.  The wife says that she would seek some occupation upon the conclusion of this litigation on a voluntary basis, but did not offer the likelihood or even possibility of gainful employment.

27. The husband has had a crushed foot and asserts that it inhibits him in undertaking his employment in insurance and sales.  He nevertheless has been able to earn a very modest sum of money in those roles of relatively recent times.  The husband is, however, 65 years of age and is approaching an age when he may retire.  I take the view that on the evidence it is more likely that the husband will continue for a time at least to earn a modest income from his enterprise in sales in particular.  The amount was put as likely at $5,000 per year by the husband but the amount he has earned in the recent past has been more than that.

28. It was asserted by the wife that the husband has been less than honest in his disclosure and relied heavily on a number of records produced from the Roads and Traffic Authority showing the husband as the registered owner of a number of vehicles.  I was satisfied at the end of the husband’s cross examination that there had been no failure to disclose matters of substantial consequence although clearly there had been, for example, a failure to reveal noted vehicles registered in his name but owned by others and some other items of limited value.

29. There had been a failure to disclose the existence of a Mercedes motor vehicle but that was remedied.  Although unfortunate, I am not of the view that this is a matter in the overall scheme of this case which should be attributed any great weight in the result.  The assets disclosed will be taken into account.

The Issues

1. What assets of the parties are to be included in the pool for division and how should any assets not so included be appropriately taken into account?

2. The marriage of the parties was of a long duration. The husband asserts that upon a consideration of the contribution factors under section 79 of the Family Law Act 1975 (“the Act”), the Court would, notwithstanding the long duration of the marriage, determine that the contributions are in excess of 50% for the husband and less than 50% for the wife. A figure was suggested in the range of 2.5% as the variation from an equality of contributions.

3. The wife asserts that whilst the husband was hard working and diligent and applied his varied skills to the improvement of the property of the parties that she also applied her skills in the role of homemaker and as a parent, caring for up to six children from time to time.

4. The wife asserts that she also assisted the husband as a bookkeeper and assistant in his several business undertakings and says she also worked and contributed to the household expenses, albeit to a lesser extent than the husband and that any assessment of contributions should be that there is an equality of contribution. Thus, there is an issue of what, in these circumstances, should be the determination made on the parties’ respective contributions?

5. In issue also is the amount, if any, by which any distribution made upon the basis of contributions should be varied upon a consideration of those matters required appropriately in this case to be considered under the provisions of section 75(2) of the Act.

6. In considering that section it is particularly an issue as to whether the property of the wife received by her post separation and the compensation received by the husband post separation should be treated as a financial resource of each of the husband and the wife in the determination of what is just and equitable.  In submissions each of the parties agreed to that course.

7. It was also agreed that if any allowance was to be made for the relative financial resources of the parties and other the matters for consideration under the provisions of section 75(2), then that consideration would favour the husband.

8. The wife asserts that if such consideration is made then the additional amount to be added to the husband’s entitlement should not exceed 5% of the divisible assets.  The husband seeks an amount of 63% of the divisible pool and that the wife receive a sum equivalent to 37% of that pool.

Property matters

1. The first step I must undertake is to identify the property of the parties or either of them available for division between them.

2. The Court at the commencement of the hearing was provided with the balance sheet set out hereunder for its consideration.

Assets
Description	Wife’s Value ($)	Husband’s Value ($)
[E property] (FMH)  (joint)	1,650,000	1,650,000
SeaRay Boat […]  (joint)	37,000	37,000
SeaRay Boat […] (sold)  (joint)	20,000	35,000
Formula Boat […]  (joint)	40,000	40,000
[…] Sedan (sold)  (h)	14,500	14,500
Contents  (h)	17,370	17,370
Mitsubishi  (w)	9,000	9,000
Jewellery  (w)	2,805	2,805
[M property]  (w)	1,075,000	1,075,000
Bank Account  (w)	5,500	0
Mercedes Sedan  (h)	16,000	16,000
Commodore  (sold)  (h)	6,000	6,000
Commodore  (h)	8,000	8,000
Furniture  (w)	7,802	7,802
Bank Account (excluding compensation moneys)  (h)	4,031	4,031
Bank Account  (w)	441	441
St George Bank Account (containing compensation moneys)  (h)	168,699.81	168,699.81
Total	$3,082,148.81	$3,097,148.00
Addbacks
Description	Wife’s Value ($)	Husband’s Value ($)
0	0
Total	$0	$0
Liabilities
Description	Wife’s Value ($)	Husband’s Value ($)
Mortgage FMH  (joint)	153,000	153,000
Mortgage [M] unit  (w)	169,000	169,000
Total	$322,000	$322,000
Superannuation
Fund & Interest	Wife’s Value ($)	Husband’s Value ($)
Total Assets	$0	$0
Financial Resources
Description	Wife’s Value ($)	Husband’s Value ($)
Total Assets	$0	$0

1. During the course of the hearing the balance sheet was amended to add a further Mercedes motor vehicle of the husband by consent valued at $16,000 and to reduce the amount held by the wife in her bank account to the sum of $210.  I reject the figure of $441 asserted by the husband as that balance since that was not the evidence of the balance presently held in that account.  The difference in any event is inconsequential in the consideration of a just result in this case.

2. The wife has sold her Mitsubishi motor vehicle and purchased a Mazda motor vehicle which is said to have a value of $1,000.

3. The husband sought that the amount of $20,000 be included on the balance sheet in relation to the SeaRay Boat, which was sold.  The wife sought that the value included on the joint balance sheet as $35,000.  I will adopt the figure of $20,000 which is the sum contained in the husband’s affidavit as being the amount received upon its sale.

4. It is noted that this sum was equivalent to a valuation previously obtained and although there was an affidavit making an assertion as to the payment of a further sum.  The husband denied the assertion, alleging mala fides on the part of the witness.  The witness was not further called by the wife in a case in reply to that assertion.  I will in this case allow it to remain in the balance sheet since both parties sought its inclusion at that price.  The same approach was taken in relation to certain other assets which were sold.

5. I will, for the purpose of calculating the parties’ entitlements in these proceedings, remove from the balance sheet the value of the wife’s property at M and the husband’s compensation payment. Both were received post separation and neither party can be said to have contributed to the acquisition, conservation and improvement of those assets by the other. In addition, compensation payments have a peculiarly personal attachment since they are a payment designed to compensate, inter alia, for pain and suffering endured by the recipient. Notwithstanding that I have removed them from the balance sheet I will take them into account in my considerations upon the matters referred to in section 75(2).

6. In relation to liabilities I note that the husband repaid a loan of $55,000 from his compensation payments, thereby reducing the amount he has to the amount specified in the original balance sheet. The evidence is that this sum was spent on reasonable living expenses and the payment of tax referable to income derived during cohabitation. I do not intend to add this loan to the balance sheet. I will, however, take into account otherwise in my considerations of the matters to be considered under section 75(2) the fact that the husband paid tax which accrued pre separation from his compensation payment received post separation.

7. The wife borrowed money for the purpose of buying furniture and supporting herself and paying costs in relation to certain proceedings in another court in which she was acquitted of driving offences. She also applied that loan to the payment of interest on the monies borrowed and towards renovations made to the home unit in which she resides. I will not include the amount in the balance sheet but in making a determination as to adjustments under the provision of section 75(2) I will take into account the application of the monies borrowed and the amount owed. That appears to be an amount of about $92,500 which is referable to the assets included at gross value in the balance sheet. There is, in addition, accrued interest on the sum which is not specifically calculated.

8. In relation to legal costs I will take into consideration, in the exercise of my discretion, both the paid costs and those said to be owing.

9. The husband disclosed a further sale of a motor vehicle, which I include in the balance sheet.

The Balance Sheet

1. Accordingly, I determine the pool of assets against which orders should be made to be determined as follows.

2. I find the assets and liabilities of the parties are as follows:

Assets	($)
E property (FMH)  (joint)	1,650,000
SeaRay Boat (joint)	37,000
SeaRay Boat (sold)  (joint)	20,000
Formula Boat (joint)	40,000
Sedan (sold)  (h)	14,500
Contents  (h)	17,370
Mazda  (w)	1,000
Jewellery  (w)	2,805
Bank Account  (w)	210
Mercedes Sedan  (h)	16,000
Mercedes (sold) (h)	16,000
Commodore (sold)  (h)	6,000
Commodore  (h)	8,000
Furniture  (w)	7,802
Bank Account (excluding compensation moneys)  (h)	4,031
Total Assets	$1,840,718
Liabilities
Mortgage FMH  (joint)	153,000
Total Liabilities	$153,000
Nett Assets	$1,687,718

Section 79(4) contributions to date of separation

Initial Contributions

1. Neither of the parties had significant assets at the date of the commencement of their cohabitation.

Contributions to the date of separation

1. Throughout the course of this marriage the husband worked hard and up to six days per week and some times at two jobs.  The husband had a range of skills as a home handyman and builder.  He supervised and undertook significant additions to the home at C which contributed to the capacity of the parties to realise an amount on sale which enabled them to acquire the property at E.  I accept that the husband had those skills, that he used them and that he worked hard throughout the marriage.

2. The wife was, apart from the early part of the relationship and for a period later as a part time employee, primarily responsible for the welfare of the family in the primary role of home maker and parent.  That is not to say that the husband was not also involved in those roles when at home, however given his hours of work, the heat and burden of that task was shouldered by the wife.

3. It is, of course, undoubtedly true to say that were it not for the role that the wife fulfilled as mother and carer, at times of up to six children, that the husband would have not been able to afford the time and effort in doing what he did.  It is as a consequence of her role in that way that the husband was enabled to use his skills and work the hours that he did.

4. In a marriage such as this it is, in my view, inappropriate to regard the contributions that the husband and wife made as anything other than equal, different it is true, but equal nevertheless.

Contributions post separation

1. The husband made much of the fact that after separation he paid the outgoings of and mortgage payments relating to the former matrimonial home in which he resided.  Although I also take into account that the husband however had the exclusive use of the property and the wife’s capital.

2. It is the usual practice in cases such as this to regard such payments, absent any extraordinary outgoings, to be a quid pro quo for the exclusive use of the property and the wife’s capital and I will so treat them.

3. Post separation the wife lived in the property that she inherited and made no contribution to the maintenance of assets in the possession of the husband.  The wife sold the car that she had and purchased a cheaper one.  She applied the difference to her upkeep and expenses.

Conclusion based on contribution

1. All in all I assess the contributions of the parties to the acquisition, conservation and improvement of the property of the parties to the marriage or either of them, including such property which is no longer the property of the parties to the marriage or either of them, to be equal to the date of their separation.

Section 75(2) considerations

1. The significant consideration under this heading is the fact that the wife’s capital is vastly superior to that of the husband given that she has since separation received a bequest of a value in excess of one million dollars.  One would have to allow that, in determining the value of that property, an amount would have to be allowed for the monies borrowed by the wife in improving the property.  Nevertheless, the difference between the wife and the husband in their ability to support their lifestyle in the future is significant.

2. The husband has re-partnered, although the evidence is that his new partner contributes to the household probably only the additional expense that she creates by living in it.  She is not, it seems, a significant source of expenditure so far as the husband is concerned.  Ms Q, the husband’s new partner, deposes that her assets including superannuation of $167,000 exceed her liabilities by an amount of about $111,400 and that she is in receipt of an income in the order of $90,000 per annum.  She deposes that at this time the husband and she are keeping their finances separate and that they have no present intentions to marry, although she expresses the hope that their relationship will be long term.

3. The husband has repaid a debt from his compensation monies in the sum of $55,000 used for the purpose of meeting, inter alia, expenses which arose prior to separation.  The husband has the balance of monies received from the compensation payments which I have removed from the balance sheet and which were also acquired post separation it seems.

4. The wife has an obligation for the amount payable under the mortgage she has taken out on her inherited unit and also an obligation, she says, to repay her son interest payments on that sum presently met by him.

5. The husband has a very modest earning capacity and the wife probably none.

6. The wife is disabled by her anxiety and former depressive illness and has to incur expenses in and about the treatment of those conditions.

7. The husband has had a physical injury to his foot which he says inhibits him in his earning capacity and recently was diagnosed with prostate cancer.  That latter condition appears to have been successfully treated at this time.

Conclusion on section 75(2)

1. For all the reasons referred to above and particularly in circumstances where the capital held by the wife is significant, I think that an appropriate division based upon a consideration of contributions as set out above should be supplemented by an allowance to the husband for these factors in the amount of 8% of the assets to be distributed.

Overall division of assets

1. The above determination will see the husband receive 58% of the parties’ assets and the wife receive 42%.

Just and equitable

1. The division of assets would see the wife receive $708,841.56 worth of nett assets and the husband receive $978,876.44 worth of nett assets.

2. In the circumstances of this case, I determine that result to be just and equitable and requires no further amendment.

Orders which should be made

1. The wife sought an order for the return of certain furniture of the parties held by the husband.  The value of the furniture was contained in the balance sheet.

2. I propose to allow the husband and wife some 21 days in which to determine whether they can agree on the transfer of the furniture to the wife.  I will make an order that if they cannot do so then the whole of the contents are to be divided into two lists by one party and the other party will have the first choice of the lists.  That other party will retain the contents on the list so chosen and the balance will be retained by the other party.

3. I propose orders which will give effect to the following division.

4. The wife will receive:

Assets	($)	($)
·       Jewellery  (w)	2,805
·       Furniture  (w)	7,802
·       Bank Account	210
·       Mazda	1,000
·       Household contents to be received	8,685	20,502
·       Cash payment from the husband to the wife	688,339.56
Total Assets	$708,841.56

The wife will retain her financial resources.

1. The husband will receive:

Assets	($)	($)
·       E property (FMH)  (joint)	1,650,000
·       SeaRay Boat (joint)	37,000
·       SeaRay Boat (joint) (sold)	20,000
·       Formula Boat (joint)	40,000
·       Sedan  (sold)  (h)	14,500
·       Half Contents  (h)	8,685
·       Mercedes Sedan  (h)	16,000
·       Mercedes Sedan (sold) (h)	16,000
·       Commodore  (sold)  (h)	6,000
·       Commodore  (h)	8,000
·       Bank Account  (excluding compensation moneys)  (h)	4,031	1,820,216
Liabilities
·       Mortgage FMH  (joint)	153,000
·     Payment from the husband to the wife	688,339.56	841,339.56
Net Assets	$978,876.44

The husband will retain his financial resources.

1. To give effect to this division I make the orders set forth above.

I certify that the preceding seventy-seven (77) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler.

Associate: 

Date:  7 December 2009