Bonacci and Bonacci
[2010] FamCA 331
•30 April 2010
FAMILY COURT OF AUSTRALIA
| BONACCI & BONACCI | [2010] FamCA 331 |
| FAMILY LAW – PROPERTY SETTLEMENT – assessment of contributions – whether expenditure on alcohol eroded financial contributions – the weight to be given an informal agreement – relevant s. 75(2) matters – just and equitable orders – whether a superannuation splitting order should be made |
| Family Law Act 1975 (Cth) ss 75(2), 79, 79(2) |
| Hickey & Anor and Attorney-General for the Commonwealth (2003) FLC 93-143 Robb & Robb (1995) FLC 92-555 Woodland & Todd (2005) FLC 93-217 Dupont (No.3) (1981) FLC 91-103 Browne & Green (1999) FLC 92-873 Norbis v Norbis (1986) FLC 91-712 Pierce & Pierce (1999) FLC 92-844 Coghlan & Coghlan (2005) FLC 93-220 Waters & Jurek (1995) FLC 92-635 Collins and Collins (1990) FLC 92-149 |
| APPLICANT: | Ms Bonacci |
| RESPONDENT: | Mr Bonacci |
| FILE NUMBER: | NCC | 487 | of | 2008 |
| DATE DELIVERED: | 30 April 2010 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Newcastle |
| JUDGMENT OF: | The Hon. Justice Rose |
| HEARING DATE: | 29 & 30 June 2009, |
| WRITTEN SUBMISSIONS: | 18 August 2009 21 September 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | W Tregilgas |
| SOLICITOR FOR THE APPLICANT: | Aubrey Brown Partners |
| COUNSEL FOR THE RESPONDENT: | J Hamilton |
| SOLICITOR FOR THE RESPONDENT: | M G O'Callaghan & Associates |
Orders
That the husband pay to the wife the sum of $90,165.00 on or before 5.00pm 30 June 2010.
Declare that subject to Order 1 each of the parties is the sole beneficial owner of all property in his or her name, possession, power or control respectively.
That all other outstanding applications are dismissed.
That all documents produced on subpoena may be returned to the person who produced the same.
That the proceedings be removed from the active pending cases list.
IT IS NOTED that publication of this judgment under the pseudonym Bonacci & Bonacci is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT NEWCASTLE |
FILE NUMBER: NCC 487 of 2008
| MS BONACCI |
Applicant
And
| MR BONACCI |
Respondent
REASONS FOR JUDGMENT
Introduction
In these proceedings the applicant (who for convenience I shall refer to as “the wife”) seeks property settlement orders and a superannuation splitting order in accordance with her Further Amended Application filed 29 June 2009.
The respondent (who for convenience I shall refer to as “the husband”) seeks an order that the wife’s further amended application be dismissed and declarations that each of the parties be declared the sole and beneficial owner of all property including real property and superannuation entitlements in his or her name respectively.
There is an issue in relation to the periods of cohabitation between the parties. The wife contends that cohabitation commenced in April 1989 and that following a number of periods of separation the parties finally separated on 12 November 2004.
The husband contends that cohabitation commenced early in 1990 and that following a number of different periods of separation to those claimed by the wife, the parties finally separated on 26 September 2004.
I subsequently set out my findings in relation to the periods of cohabitation.
The parties married in 1997. By Divorce Order made 15 December 2009 effective from 16 January 2010 the marriage has been dissolved.
There are no children of the relationship of the parties. However, the wife has two children of her prior marriage namely:
(a)M born in 1975 (“M”)
(b) S born in 1979 (“S”)
The two children were 13 and 9 years respectively at the commencement of cohabitation as contended by the wife. They were 14 and 10 years respectively at the commencement of cohabitation as contended by the husband.
The issues raised included the nature and extent of the contributions made by each of the parties and, so far as the wife’s case is concerned, whether “the husband’s various contributions were compromised and minimised by his purchase and excessive consumption of alcohol and the effects thereof ”[1]. In addition, relevant matters were raised pursuant to section 75(2).
[1] Case outline 26 June 2009 p.8
Historical background
The following are further brief and uncontroversial relevant historical matters.
In May 1983 the husband purchased as vacant land the property at T (“the T property”).
In 1984 the husband caused a house to be constructed on the T property funded by a mortgage advance of $40,000.00.
In early 1988 the wife purchased the property at W (“the W property”). It was unencumbered at the commencement of cohabitation between the parties regardless of whether the date contended by either the wife or husband is correct.
In October 1989, the husband received $300,000.00 in settlement of a personal injury claim.
In October 1989 the husband paid $40,000.00 in discharge of the mortgage over the T property from the settlement referred to in the last paragraph.
He used the balance of that settlement to purchase a truck, a campervan, a BMW motor vehicle, a boat, an investment of $102,000.00 with GIO and to meet a variety of business and living expenses.
In or about 1990 the husband caused C Pty Limited to be incorporated (“the company”). The company’s business undertaking has been that of trucking carried out by the husband.
In 1995 the wife received $50,000.00 in settlement of a personal injury claim.
In 1997 the parties purchased a unit on the Gold Coast (“the Z property”).
In April 2001 the husband purchased an onsite caravan at N “the caravan”).
In 2003 the wife sold the W property.
In about November 2004 the wife purchased a demountable home (“the demountable home”).
On 9 October 2006 the husband purchased another unit on the Gold Coast (“the Y property”).
In 2006 the wife sold the demountable home to her father.
In or about 2007 the wife purchased the property at L.
Relevant legal prinicples
It is now well established that generally speaking the approach to be taken to determination of property settlement proceedings, concluding with an order that is “just and equitable”, represents four steps.
The first of which is that the Court should determine the property and financial resources of the parties at the date of the hearing.
Secondly, determine the nature and extent of the respective contributions made by each of the parties whether financial or non financial, including contribution to the welfare of family in the role of home-maker and parent.
Thirdly, determine and assess the relevant matters pursuant to section 75(2).
Fourthly, consideration of orders, if any, that should be made that are just and equitable.[2]
[2] Hickey & Anor and Attorney-General for the Commonwealth (2003) FLC 93-143
I will now proceed to make findings in relation to the property of the parties, their respective financial and non-financial contributions and relevant matters (if any) pursuant to section 75(2) of the Act. In addition, I will make findings in respect of the issue of “waste” raised by the applicant.
Property of the parties
An agreed schedule of the property of the parties including superannuation entitlements and controversial items conventionally described as “Add-Backs” is included in Exhibit 6 reproduced as follows:
[BONACCI] AMENDED BALANCE SHEET Item Agreed Husband Wife Husband [T property] 500,000.00 [Z Unit] 398,500.00 Furniture and furnishings therein 1,500.00 [Y Unit] 400,000.00 Furniture and furnishings therein 1,500.00 Share portfolio 144,298.00 Toyota MR2 8,500.00 Troop carrier 1,000.00 [C] Pty Ltd 120,000.00 Household furniture 10,000.00 Cruiser boat 5,000.00 Chevy motor home 1,000.00 Total 1,590,298.00 1,590,298.00 1,590,298.00 Wife Demountable home 170,000.00 170,000.00 Furniture and furnishings therein 2,000.00 Savings 15,000.00 1,556.00 Toyota Rav 4 13,000.00 13,000.00 198,000.00 186,556.00 Total property 1,788,298.00 1,776,854.00 Add-Backs 1 Husband Item Proceeds of insurance claim paid to the Husband in relation to the Lexus $24,350.00 Approximate net rental received by the Husband for the [Z Unit] from October 2004 to 30 June 2006 approximately 2 $13,100.00 $37,450.00 Wife The Husband asserts there should be an add back for moneys taken by the Wife at separation (late 2004) Liabilities Item Agreed Husband Wife Husband Mortgage on [T property] 310,000.00 Mortgage on investment units 430,000.00 ANZ Visacard account 41,580.00 Colonial Marginal loan as at 31.12.2008 113,850.00 Total for Husband 895,430.00 Superannuation 3 Husband Item Agreed Husband Wife Husband Aus Super Account 35,000.00 SAS 4 683,540.00 5 Total Husband’s superannuation 718,540.00 Wife Hesta 2,782,00 AMP 16,750.00 Australian Super 3,872.00 Total Wife’s Superannuation 23,404.00 Total Superannuation 741,944.00 Therefore Wife asserts Property $17,776,854.00 Add-Backs $ 37,450.00 $ 1,814,304.00 Less liabilities $ 895,430.00 Net $ 918,874.00 Net property $ 918,874.00 Plus Superannuation $ 741,944.00 Net property & superannuation $ 1,660,818.00 1 See La Costa v La Costa (2007) 38 FamLR 412 at paragraph 39. 2 This is not admitted by the Husband. 3 See In the marriage of Coghlan (2005) 33 FamLR 414 and Clives v Clives (2008) 40 FamLR 273. 4 Which is in the payment phase and is currently paid as a Consumer Price Index Pension for life of approximately $770.00 per week gross. 5 The Husband argues that this should be dealt with as a financial resource.
“Add-Backs”
The following paragraphs set out my findings in relation to the matters under this sub-heading referred to in paragraph 32.
Proceedings of insurance claim paid to the husband in relation to the Lexus - $24,350.00
This particular matter is agreed upon for inclusion in the net property of the parties as is apparent from the written submissions lodged on behalf of each of the parties.[3]
[3] Wife – 18 August 2009 p.4; husband - 21 September 2009 pp.4-5.
Consequently, this matter will be included in my findings under the heading “revised property of the parties”.
Approximate net rental receipt by the husband for the Z Unit from October 2004 to 30 June 2006 approximately - $13,100.00
No submission was made in relation to this matter. Consequently, it will not be included in the property of the parties but rather taken into account pursuant to s 75(2)(o).
Monies taken by the wife at separation (late 2004) - $37,450.00
This particular matter was not the subject of the written submissions made by counsel, although the financial circumstances of the parties and their actions at and subsequent to separation were analysed in some detail.
Consequently, in those circumstances, where this specific matter was not pressed in written submissions I will not include it as an “add-back” in the revised property of the parties for the purpose of a determination as to their net property.
Jewellery (wife) $10,000.00
I accept the submission made by counsel for the husband that this item should be included in the net property of the parties for the reasons set out in those submissions.[4] Those submissions were not opposed in the wife’s submissions in reply.[5]
[4] 21 September 2009 p5
[5] 25 September 2009
Payments received from the husband - notional (wife) - $208,574.00
It was submitted on behalf of the husband that this amount “should be included as a notional asset in the possession of the wife” rather than the items included in the “amended balance” being Exhibit 6 otherwise described in paragraph 32 hereof.
I do not accept those submissions. Money at the disposal of the wife was utilised by her to purchase property described in Exhibit 6. Whilst the value attributed in total of $185,000.00 represents a figure less than the total amount which the husband contends that the wife received, the balance alleged of approximately $23,574.00 will be a matter that falls for consideration pursuant to section 75(2)(o).
Revised property of the parties
I find that the property of the parties is as follows having regard to the findings and the treatment of “add-backs” referred to earlier in this judgment:
Item Husband T property 500,000.00 Z Unit 398,500.00 Furniture and furnishings therein 1,500.00 Y Unit 400,000.00 Furniture and furnishings therein 1,500.00 Share portfolio 144,298.00 Toyota MR2 8,500.00 Troop carrier 1,000.00 C Pty Ltd 120,000.00 Household furniture 10,000.00 Cruiser boat 5,000.00 Chevy motor home 1,000.00 Proceeds of insurance claim paid to the Husband in relation to the Lexus (add-back) 24,350.00 $1,614,648.00 $1,614,648.00 Wife Demountable home 170,000.00 Furniture and furnishings therein 2,000.00 Savings 1,556.00 Toyota Rav 4 13,000.00 Jewellery $10,000.00 $196,556.00 Gross property $1,811,204.00 Liabilities Item Husband Mortgage on T property 310,000.00 Mortgage on investment units 430,000.00 ANZ Visacard account 41,580.00 Colonial Marginal loan as at 31.12.2008 113,850.00 Total for Husband $895,430.00 Net property (excluding superannuation) $915,774.00 Superannuation Item Husband Aus Super Account 35,000.00 SAS 683,540.00 Total Husband’s superannuation 718,540.00 Wife Hesta 2,782,00 AMP 16,750.00 Australian Super 3,872.00 Total Wife’s Superannuation 23,404.00 $ 1,814,304.00 Less liabilities $ 895,430.00 $ 918,874.00 Plus Superannuation $ 741,944.00
Contributions
The parties are at issue in relation to the periods of their cohabitation, it nonetheless being common ground between them that they had a number of separations. An example of the clash of evidence relates to the commencement of cohabitation which the wife contends occurred in April 1989 whilst the husband claims that the relevant date was early 1990. The affidavit evidence reveals the confusion of the “relationship” that they had at different times with the legal concept of “cohabitation”.
Apart from the lack of agreement in relation to the periods of cohabitation, the parties also differ as to the date of their final separation. The wife claims that the relevant date was 12 November 2004 whilst the husband contends that it was 26 September 2004.
I accept the submission made on behalf of the wife that not only “it may be impossible to determine this question of fact” and that “it may also be of limited relevance to the determination of these proceedings”[6] The same approach would apply in relation to other contributions including direct and indirect financial contributions to the property of the parties.
[6] Written submissions 18 August 2009
Whilst the findings I make in relation to periods of cohabitation necessarily means resolving issues of credit so far as the evidence of each of the parties is concerned, I formed the view that the differences between them were matters of perception overlaid by emotion so far as history is concerned, rather than untruthfulness.
Counsel provided detailed submissions in relation to this issue. I am satisfied on the balance of probabilities that the evidence of the husband is more reliable than that of the wife, notwithstanding that part of her evidence was sought to be corroborated by her son. Having observed each of the parties give their evidence I was more impressed with the manner and content of the husband’s evidence rather than that of the wife. I found her evidence at times to be confusing and contradictory. Her recollection of events at times was unreliable and she had difficulty controlling her emotions which could have impacted upon the cogency of her evidence. In that regard, I accept the submission on behalf of the wife regarding her emotional state and reliability of her memory[7]. In contrast, the husband gave his evidence in a consistent and clear fashion. I also accept the submissions made on his behalf by counsel and the reasons put forward in those submissions for preferring the evidence of the husband to that of the wife so far as the issue of periods of cohabitation are concerned.
[7] Ibid paragraph 124.4(c)
Accordingly, I am satisfied on the balance of probabilities that the husband’s evidence is to be preferred in relation to the periods of cohabitation between the parties. As a consequence, I find that the parties cohabitated for a period of about six and a half years in total which commenced in early 1990 and, following various reconciliations and separations, they finally separated on 26 September 2004.
I make the following findings in relation to the financial and non-financial contributions of the parties including the contribution to the welfare of the family in the role of homemaker. So far as the latter is concerned, the parties did not have children of their relationship. However, the wife has two children of her previous marriage, M born in 1975 and S born in 1979 who lived with the parties in the circumstances to which subsequent reference will be made.
The wife
I find that the wife made the following initial financial contributions at the commencement of cohabitation which are uncontroversial:
(a)The W property which was unencumbered. There is no evidence of its market value. However, not long prior to the commencement of cohabitation that is, in early 1988 it was purchased for $88,000.00.
(b)A motor vehicle. There is no evidence of its market value at the relevant time.
(c)A savings account. There is no evidence of the relevant credit balance.
(d)Household furniture and furnishings. There is no evidence of market value at the relevant time.
During the periods of cohabitation between the parties the wife made the following further contributions.
The wife carried out domestic work assisted for part of the time by paid domestic assistance the expense of which was met by the husband.
The wife was in employment for a large part of the week and the wages earned by her were applied by her in part towards household expenses.
In 1995 the wife received $50,000.00 as settlement of a personal injury claim arising out of a motor vehicle accident. I accept her evidence that the amount was then pooled with the financial resources of the husband and directly or indirectly utilised for their joint benefit.
The wife sold the W property in the year 2000 for $170,000.00. Although $150,000.00 was placed into a joint investment account ultimately it was withdrawn by the wife following the final separation of the parties and solely held by her.
I find that the wife did assist the husband in relation to a variety of improvements to the T property although to a relatively minor extent. In that regard, I accept the evidence of the husband as being more reliable and indeed, he was not strongly challenged in that respect.
The wife also made contributions to the business and its activities conducted by the husband through the company. I accept that the wife carried out banking and some administrative work whilst the husband was overseas for a period of about one and half months in 1994. I prefer the evidence of the husband to that of the wife in relation to motor vehicle cleaning work carried out by the wife in that it was carried out to a minor extent.
The wife also participated with the husband in improvements that were effected to their van and annexe.
The wife also joined in with the husband in planning renovations to the Z property.
The husband
I find that the husband made the following initial financial contributions. His evidence was not challenged in that regard:
(a)The T property which was unencumbered. There is no evidence of its market value. The land was purchased by the husband as a vacant block in 1983 for $27,500.00. In 1984 the cost of construction of a house on it was funded by a loan to him of $40,000.00. There is no evidence as to whether that represented the total cost of construction.
(b)Funds invested with GIO - $102,000.00.
(c)Trucking business.
(d)VW Combi wagon.
(e)Campervan.
(f)Boat.
(g)Funds in bank accounts approximately $45,000.00.
There is an absence of evidence of the value of items (c), (d), (e), (f) above. He did not have any liabilities. The husband made further contributions during the periods of cohabitation between the parties as follows.
The husband conducted the trucking business through the company. The income earned by him together with other sources of income due to the receipt by him of a pension and interest on his investments were applied by him in meeting liabilities of the parties, living expenses including those of the wife’s two children of her prior marriage.
The husband also funded the purchase of the Z property. It was purchased in 1997 for $170,000.00. The husband paid $70,000.00 from funds at his disposal and borrowed the balance. In addition, he also met the cost of stamp duty and legal costs from his investments.
The husband carried out work in relation to improvements of the T and the Z property as well as meeting the periodic fixed and other charges and expenses in relation thereto.
The husband also utilised funds at his disposal for the purchase of a motor vehicle for the wife.
I further find that the husband made a contribution in the role of homemaker in terms of work performed in or about the T property as well as contributing to living expenses of the wife’s two children and their holiday expenses.
In addition, the husband made contributions in relation to those children by payment of S’s college fees of $3,519.00 and repairs to her motor vehicle as well as meeting the costs of M’s school fees for years 11 and 12. Those contributions by the husband must be taken into account in accordance with the Full Court’s judgment in Robb& Robb[8]. Post final separation, in about October 2006 the husband purchased the Y property for $410,000.00 which was fully financed by mortgage advances by the Commonwealth Bank of Australia.
[8] Robb & Robb (1995) FLC 92-555 at 81,539
Assessment of contributions
As the High Court has made clear in Norbis v Norbis it is open to me to assess contributions on a global basis or an asset by asset basis[9]. The submissions made by counsel on behalf of the parties utilised the global approach with the exception, so far as the husband is concerned, that the asset by asset approach should be utilised in relation to the value of superannuation entitlements. That is the approach that I have adopted in this case especially as the value of the husband’s superannuation entitlements has been calculated in accordance with the relevant legislation and regulations. However, it is accepted that the husband does not have the option of computation.
[9] Norbis v Norbis (1986) FLC 91-712 at 75,173-75,174
It was certainly arguable having regard the facts in these proceedings for the asset by asset approach to be taken in relation to certain of the other property of the parties. In that regard the husband owned the T property at the commencement of cohabitation and he retained it to the present time. The wife for her part owned the W property as part of her pre-cohabitation property and retained it until not long before the final separation of the parties.
Nonetheless, I will take the approach submitted by counsel especially as I did not receive submissions in the alternative. That is not a criticism of counsel, but rather the manner in which the proceedings have been conducted by both counsel who presented well prepared cases and furnished detailed and thoughtful written submissions which have been of much assistance to me.
In assessing the contributions of the parties to their net property (excluding superannuation entitlements) I have determined that the contributions of the husband taken globally will exceed those of the wife in the proportions of eighty per cent in favour of the husband and the remaining twenty per cent in favour of the wife for the following reasons.
The wife made financial and non-financial contributions to the welfare of the parties in the role of homemaker. Her contributions and those of the husband must be seen against periods of cohabitation which totalled a relatively short period of approximately six and a half years. During that time the wife made a financial contribution by utilisation of part of her earnings for the joint benefit of the parties as well as carrying out domestic work in the home with the assistance at times of domestic help which I infer was paid for by the husband. The wife was able to retain her principal asset W property due to the husband providing the T property as their residence and meeting all significant expense in relation to retaining and maintaining it.
In addition, the husband implicitly was the principal earner of income which largely funded the lifestyle of the parties.
The husband also made a significant contribution in the role of homemaker especially in view of the provision of the T property as accommodation for the wife’s two children during such periods that they were dependent upon her and meeting significant financial support for them, the subject of my earlier findings.[10]
[10] Pierce & Pierce (1999) FLC 92-844
Whist the wife gave evidence of her support for her two children I am unable to give any weight to such a contribution due to the Full Court’s judgment in Robb[11].
[11] Supra
The wife’s further contribution represented $50,000.00 being the net settlement that she received from a personal injury claim which I accept was utilised for the joint benefit of the parties as a result of having been deposited in the joint account.
The husband made the greater contribution in terms of improvement and maintenance of real estate.
Each of the parties has significantly adjusted their financial circumstances following their final separation. The wife for her part has received $52,000.00 from an account of the parties and transferred to the husband her interest in the Z property. Those matters are the subject of subsequent findings pursuant to section 75(2)(o).
The husband proceeded to purchase the Y property and invest in shares on the basis of a margin loan, all of those transactions taking place subsequent to the matters referred to in the last paragraph.
It was submitted on behalf of the wife that “the husband’s purchase and consumption of alcohol during the relationship did in fact deleteriously impact on the husband’s various financial contributions”[12].
[12] Written submissions 18 August 2009 paragraph 73
Each of the parties gave affidavit and oral evidence. The affidavit evidence of the wife is that the husband drank between one and two bottles of wine a night as well as regularly consuming “Wild Turkey”. The wife herself “would at times have a glass of wine with my meal”. The parties argued in relation to the husband’s consumption of alcohol.
During the course of her oral evidence the wife stated that the parties ate at restaurants two or three nights per week during which she had one or two glasses of wine. The wife claimed that the husband consumed alcohol comprising a beer “nearly always a bottle of wine for entrée”, a bottle of red with the main course and sometimes a cognac as well. The bottles cost $23.00 to $25.00. In addition, the wife claimed that during 2004 the husband consumed two bottles of wine a night although she did not know the cost. During that same year the husband allegedly purchased bourbon by the case costing about $80.00 per bottle and a bottle was consumed over two nights in 2004.
Evidence was given in the wife’s case by her son M. His affidavit evidence was that he frequently observed the husband consuming alcohol and that “he drank most nights but not always to excess”. He considered it not uncommon for the parties to have a bottle of wine whilst watching television. He did not state who consumed the greater proportion of it. He also observed the husband drinking Wild Turkey bourbon after dinner. During his oral evidence he restated the latter observation.
The husband also gave affidavit and oral evidence in relation to this issue of his consumption of alcohol. The substance of his affidavit evidence is that the parties consumed alcohol together, that he enjoyed collecting wine and he denied consuming it excessively. He denied that the cost of alcohol placed any strain upon the financial circumstances of the parties.
During the course of his oral evidence the husband stated that the parties dined out three or four times a week up to 1999 and then resumed in 2003. He purchased or took with him two bottles of wine. In 2003 and 2004 a bottle of wine cost on average $25.00 although not taken to particular restaurants. He further stated that wine that he consumed at home cost $5.00 to $6.00 a bottle, other wine was at variable prices. He denied that the cost of Wild Turkey was as claimed by the wife.
I have concluded that the husband’s financial contributions have not been diluted or lessened due to his expenditure on alcohol for the following reasons.
The evidence does not enable me to make a finding of the approximate expenditure on alcohol throughout all or any of the periods of cohabitation between the parties. There is evidence which I accept that the parties and in particular the husband regularly consumed alcohol both at home and at restaurants. In particular, that occurred during 2004. What is not clear is whether that was for almost all of that calendar year or only for certain parts of it or whether, in any event, the evidence enables me to make a finding of the approximate cost of alcohol purchased by the husband for all or a substantial portion of the periods of cohabitation and even if such a calculation could be made, what is the level of cost that is regarded as reasonable in the circumstances of the lifestyle of the parties. In addition, there is no evidence of substance which would enable me to conclude that the husband’s expenditure on alcohol caused financial difficulties for the parties.
In relation to the husband’s superannuation entitlements the value that is given represents the calculation required by the relevant legislation and regulations. The husband receives periodic pension emanating as a result of his discharge from his employment due to health reasons which occurred prior to the commencement of cohabitation between the parties.
I have concluded that it is unarguable that contributions to his superannuation represented by his pension were solely made by the husband[13]. Nonetheless, the husband’s superannuation entitlements as well as those of the wife will fall for consideration pursuant to section 75(2) and for the purpose of the wife’s application for a superannuation splitting order and, of course, pursuant to section 79(2) and otherwise for making property settlement orders that are just and equitable.
[13] Coghlan & Coghlan (2005) FLC 93-220
Relevant Section 75(2) matters
I make the following findings in relation to relevant matters pursuant to the provisions of section 75(2).
The wife and husband were 56 and 54 years of age respectively at the time of conclusion of the evidence. They are now respectively 57 and 55 years.
It is submitted on behalf of the wife that her health is poor. The submissions on behalf of the husband, whilst contending that on an historical basis the wife should not have resigned from her employment, do not make a submission specifically directed to her health.
The wife’s affidavit evidence is that she has endured “extremely indifferent health” for some years “suffering from rheumatoid arthritis” and “early onset Alzheimers”. The wife receives a disability pension which was approved after she had attended various nominated medical practitioners.
The medical evidence in relation to the wife’s health issues comprises clinical notes and reports being Exhibit 5 and the oral evidence of Dr E consultant neurologist and consultant geriatrician.
Exhibit 5 includes a referral dated 18 September 2007 from the wife’s former employer Dr R general practitioner. He expresses “current concern relates to a developing memory problem”, depression “in part reactive and has elements as well of a true morbid depression where a succession of strategies have been to no avail”. He notes other health problems including lower back pain, sciatica, rheumatoid arthritis, asthma (under control) and sleeplessness. One of the matters that he stresses for the purposes of the referral is whether or not the wife “has an early dementia”.
Exhibit 5 also includes a report dated 25 September 2007 from Dr E to Dr R following the latter’s referral. His “comment” included that the wife “has a significant memory and cognitive impairment” however, he recommends further investigation. To that extent he had organised various radiologist tests to be performed and a referral for neuropsychometric assessment.
A report dated 12 February 2008 from KT, a clinical neuropsychologist with the Hunter New England Mental Health Service concluded that “there is no evidence in support of a neurodegenerative condition”. The report noted that the wife’s reported “pattern of memory changes” was in the context of distractors being evident in every day environments. The emphasis therefore was upon the assessment environment which was quiet and had few competing task demands and in that environment the wife was assessed as being able to perform tasks “within expected levels of ability”. The wife did not attend for further review by Dr E.
The wife’s evidence was that she did not do so as the information that she had received from the person who carried out the testing “was positive/bad” in any event following consultation with other medical practitioners she was approved for the purpose of a Centrelink disability pension. I accept the wife’s evidence and was impressed with the sincerity of it.
During the course of Dr E’s oral evidence and having reviewed the report dated 12 February 2008 from the relevant professional at the Hunter New England Hospital, Dr E expressed the opinion that pain, sleeplessness and depression were causes of the wife’s health problems, rather than a dementing illness. He was of the view that the wife has normal memory for her age. He accepted the history that the wife suffered broken sleep due to pain and he was circumspect as to whether or not therapy would be successful. In addition, Dr E was of the view that the wife’s apparent cognitive impairment if not reversed was likely to be ongoing and have the result that continuing employment would be difficult. However, he also expressed the opinion that the memory issue can be improved. He stated that implicitly based upon the wife’s consultations with him, she appeared to be “sincere and gave a reliable history”.
I accept the medical evidence contained in Exhibit 5 and the oral evidence given by Dr E. Consequently, I find that the wife has had and continues to suffer from the health issues to which I have earlier referred, save and except that she does not have a dementing illness and that her memory, based on testing, is normal although affected by her other health issues including pain and sleeplessness.
I find that the wife’s income comprises her disability pension. Exhibit 11 reveals that her pension together with her pharmaceutical allowance and rent assistance amounts to $654.70 per fortnight. In addition, the wife receives a telephone allowance of $23.00 paid quarterly. Her Notice of Assessment for the year ended 30 June 2008 is included in Exhibit 12 revealing a taxable income of $35,207.00 per annum. The evidence does not disclose the sources of that income other than the disability pension.
I find that the wife’s income and other financial benefits are those that are summarised from Exhibit 11.
I find that the wife has the property and financial resources described in paragraph 42.
I further find that the wife no longer has the physical and mental capacity for appropriate gainful employment, notwithstanding her many years experience in the health field and subsequently as an employed nurse. The reason for that conclusion is that despite her undoubted qualifications and substantial experience in those occupations, realistically she cannot exercise that capacity due to the health issues that she has, quite apart from the absence of evidence which would demonstrate that the wife has a reasonable likelihood of being employed, not to mention the range of income which she could now earn.
The husband has the property and financial resources described in paragraph 42 hereof.
The husband has the physical and mental capacity to continue, in effect, his self-employment engaged in the conduct of a trucking business including a truck driver.
Each of the parties has commitments necessary for his or her support in accordance with their respective financial statements and the evidence given in their primary affidavits.
Neither of the parties has responsibility to support any other persons.
Each of the parties is eligible for superannuation benefits as described in paragraph 42 hereof.
An issue arose in relation to financial transactions between the parties subsequent to their final separation whereby the wife withdrew $52,000.00 from the Viridian Account in October 2004 and the subsequent completed transfer by the wife to the husband of her interest in the Z property.
I find that there is no issue between the parties that, pursuant to their agreement, the receipt by the wife of $52,000.00 was and is not in contention although the unilateral withdrawal of it has raised controversy between them. Similarly, considerable evidence was given in relation to the circumstances surrounding the ultimate transfer by the wife to the husband of her interest in the Z property, especially due to the conversations that took place between the parties and her former employer.
There are differing accounts given by the parties as to their understanding as to the effect of each of the transactions to which I have referred in terms of whether or not those transactions represented finality having been achieved between them in relation to a property settlement. I accept the submission made on behalf of the wife that “the exact circumstances surrounding the November 2006 transfer of the wife’s interest in the [Z] unit to the husband is unclear”[14]. The legal implications that each of the parties considered applied at the time of the transfer seemed to me to be borne out of their perception as non-lawyers without the benefit of considered professional advice. I accept the submission made on behalf of the husband that the transactions taken together represented “an informal settlement of the property”[15].
[14] Written submissions 18 August 2009 paragraph 64
[15] Written submissions 21 September 2009 p.34
In that regard such a view is fortified by the lack of any step taken by or on behalf of the wife to pursue a claim for property settlement over a considerable period of time prior to the institution of these proceedings by the filing of her application in November 2007.
Nonetheless, whether it was “an informal agreement” or not does not detract from its lack of legal status in that the agreement, however described, does not oust the Court’s jurisdiction to hear and determine property settlement proceedings between the parties nor, does it represent anything other than a historical circumstance to take into account and to be given appropriate weight in the particular facts of this case.[16]
[16] Dupont (No.3) (1981) FLC 91-103 at 76,763; Woodland & Todd (2005) FLC 93-217 at 79,605
The husband subsequently acquired his interest in the Y property and also purchased shares in circumstances that created significant liabilities. I accept his evidence that he did so following information given at a professional seminar. With the benefit of hindsight it would have been more advantageous to him not to have followed that information. Nonetheless, I am satisfied on the balance of probabilities that he has not engaged in financial reckless or irresponsible conduct. Indeed, there is an absence of evidence to demonstrate that he was negligent at the time in following that seminar information and that he should have sought other professional advice, let alone the absence of any expert evidence of different advice that was available for him to receive at the relevant time.[17]
[17] Browne & Green (1999) FLC 92-873
I find that the husband has taxable income for the year ended 30 June 2008 in the amount of $39,231.00 in accordance with Exhibit 15. His taxable income for the financial years ended 30 June 2004 to 30 June 2007 range from $62,530.00 to $53,440.00.[18] His Financial Statement sworn 4 February 2008 reveals total average weekly income of $1,212.00 gross or $63,000.00 per annum approximately. His income is derived from a combination of the company, his pension with the impact of negative gearing so far as the income from the Z property is concerned.
[18] Exhibit 15
Assessment of relevant Section 75(2) matters
I have determined that there will be an adjustment in favour of the wife of fifteen per cent of the net property of the parties excluding superannuation due to the weight that I give to my findings of relevant matters pursuant to section 75(2) of the Act. The following are my reasons.
The husband’s overall financial position is much superior to that of the wife. That is borne out by the level of his income, his greater net property and his superannuation entitlements represented by his pension. In addition, he has the proven capacity to continue to earn income generated by the business activity of the company which he controls. His standard of living is significantly higher than that of the wife.
The wife’s health is poor. The husband enjoys good health. The wife does not have a capacity to earn income that can be exercised. Her income is limited to principally the disability pension. The wife has very modest superannuation entitlements.
The wife does own her own home unencumbered, utilising principally the proceeds of sale of the W property.
Conclusion
As is apparent from my assessment of the parties’ respective contributions and relevant matters that arise under sections 75(2), the wife is entitled to thirty-five per cent of the net property of the parties excluding superannuation entitlements. I have excluded the latter due to the separate treatment that will be given to it especially in the context of the wife’s application for a superannuation splitting order.
The net property of the parties, excluding superannuation, amounts to $915,774.00 together with the sum of $52,000.00 which the wife received after the parties finally separated and pursuant to the informal agreement to which I have earlier referred. Consequently, the net property of the parties amounts to $967,774.00 [emphasis added]. I have concluded that orders that provide for the wife to receive the benefit of thirty-five per cent of that net property are just and equitable. Whilst there have been a number of judgments that have referred to the requirement of making orders that are just and equitable in accordance with section 79(2) of the Act very few have come to grips with an analysis of the requirements inherent in that concept. A judgment that falls within those that have given detailed consideration to the meaning of that concept is that of Fogarty J, with the implicit agreement of the other two member s of the Court, in Waters & Jurek[19]. Having referred to the assessment of contributions and the evaluation of relevant section 75(2) factors Fogarty J held as follows:
“The connection between the s.75(2) factors and a just and equitable property order is more difficult since the criteria are expressed very broadly and are fundamentally prospective in their operation. The provision does not invite a process of social engineering (Clauson (1995) FLC 92-595 at 81,912). In Mallet, supra, at 638 Wilson J said that:-
"The objective of the section is not to equalize the financial strengths of the parties. It is to empower the court, following a dissolution of a marriage, to effect a redistribution of the property of the parties if it be just and equitable to do so ... ."
The Court can only apply one or more of the paragraphs of that provision where it is satisfied that that step is relevant to arriving at a just and equitable result. Once that primary issue is determined the weight which a particular judge gives to one or more of the factors so identified has long been recognized as subjective and capable of review on appeal only when the Appeal Court is satisfied that the conclusion falls outside a reasonable range or, as Brennan J said in Norbis (1986) 161 CLR 513 at 541 outside the "generous ambit within which reasonable disagreement is possible".[20] [emphasis added]
[19] Waters & Jurek (1995) FLC 92-635
[20] Ibid at 82,376
The making of orders which are just and equitable is more complicated than the usual run of cases in that the principal property of the parties, which they held at the first period of cohabitation, was retained by them in the case of the husband to the present time and so far as the wife is concerned. Although sold not long before the final separation, she ultimately retained it for her sole use and benefit, the net proceeds of sale. In addition, each has significantly adjust their financial circumstances subsequent to the transactions that took place between them after their final separation and more particularly described in paragraphs 55, 69, 111, 115 and 126 hereof.
It is well established that for the purpose of making property settlement orders, one must not lose sight of the extent of the periods of cohabitation which in this case is relatively short and the parties did not have a child or children of their relationship.
I have taken into account that the husband retained rent received from the Z property subsequent to the final separation of the parties. At the same time, he solely bore the responsibility for meeting the liabilities and expenses associated with that property.
I accept the evidence of the wife that following the withdrawal of in total $200,000.00 at or about the time of the final separation of the parties she utilised $165,000.00 for the purchase of a relocatable home, implicitly stamp duty and other costs associated with it, the purchase of a motor vehicle for $18,000.00 and the acquisition of house furniture and household items. I consider that that expenditure was reasonable and does not represent a notional asset to be added back for the consideration of the making of property settlement orders, other than the relocatable home she sold and a different home purchased with the sale proceeds and of course furniture, the wife also received long service leave and superannuation entitlements following the parties’ final separation. I accept her evidence and the submissions made on her behalf that the amount involved were utilised to meet her reasonable needs.
In having made reference to the adjustment in favour of the wife for relevant section 75(2) matters, I have not accepted the submissions made on behalf of the husband that the focus should be on “future needs”. That “needs” based approach was rejected by the Full Court in Collins and Collins[21] and not departed from in subsequent judgments. As has been emphasised in Waters and Jurek, an assessment must be made of relevant matters that fall pursuant to that sub-section[22].
[21] Collins and Collins (1990) FLC 92-149
[22] Ibid
The wife received $52,000.00 retained solely for her benefit as a result of withdrawal from the Viridian Account as part of the arrangements between her and the husband albeit that he did not consent to the actual withdrawal form that account at the time that it took place. I will treat that amount as representing a distribution of property in her favour which was retained for her use in her sole discretion. In the same way I have also concluded that the transfer by the wife to the husband of her interest in the Z property has been utilised by him as he determined with all of the liabilities and expenses that have ensued including the acquisition of the Y property.
Accordingly, I have concluded that it is just and equitable for the wife to receive thirty-five per cent of the net property of the parties which I found to be $967,774.00 excluding superannuation. Thirty-five per cent is equivalent to $338,721.00. The latter amount will be satisfied as follows:
Wife retains property -
$196,556.00
Wife received
$52,000.00
$248,556.00
Plus Lump sum payable -
$90,165.00
Total
$338,721.00
I will provide a period of two months for the husband to make the payment to the wife of $90,165.00. In the event of default the Rules in relation to interest will apply and the wife may take such steps for enforcement as she may be advised.
I have determined that the wife’s application for a superannuation splitting order will be dismissed. The period of cohabitation between the parties in total was relatively short being some six and a half years. The sole contributions that were made were those of the husband in the circumstances to which I have earlier referred.
The wife also had superannuation entitlements which she was able to access following the final separation of the parties. The wife currently has superannuation entitlements albeit very modest.
I have given weight to the husband’s greater superannuation entitlements compared to those of the wife as well as other relevant section 75(2) matters for the purpose of the proposed orders pursuant to section 79. There are no children of the relationship of the parties.
The wife has the security of her unencumbered home and income albeit principally her disability pension.
The valuation of the husband’s superannuation entitlements is an amount struck by applying the relevant legislation and regulations. He does not have an option to convert his periodic pension into a lump sum.
I certify that the preceding one hundred and thirty-five (135) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rose.
Associate:
Date: 30 April 2010
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