Booth and Booth
[2010] FMCAfam 1269
•23 November 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BOOTH & BOOTH | [2010] FMCAfam 1269 |
| FAMILY LAW – Property – 26 year relationship – where the only substantial item in the pool is the former matrimonial home brought into the relationship unencumbered by the husband – where the wife made significant contributions during the relationship as homemaker and parent to the parties four children – where the husband has the care of the two children still under the age of 18 and the wife is paying minimal child support – relevance of the husband’s failure to disclose his post-separation income earning activities – where the husband is 70 & the wife 46 – relevance of the different life expectancies of the parties to an assessment of s.75(2) matters. |
| Family Law Act 1975, ss.75, 79 Evidence Act (Cth) ss.128 |
| Lawrie & Lawrie (1981) FLC 91-102 Mallett & Mallett (1984) 156 CLR 605 |
| Applicant: | MS BOOTH |
| Respondent: | MR BOOTH |
| File Number: | NCC 1700 of 2009 |
| Judgment of: | Terry FM |
| Hearing date: | 28 September 2010 |
| Date of Last Submission: | 28 September 2010 |
| Delivered at: | Newcastle |
| Delivered on: | 23 November 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr Cummings |
| Solicitors for the Applicant: | Fatches Jones Lawyers |
| Counsel for the Respondent: | Mr Fermanis |
| Solicitors for the Respondent: | Hancock Alldis & Roskov |
ORDERS
That the husband shall within 60 days of the date of these orders pay the wife the sum of $274,548.88.
That if the husband fails to comply with Order (1) the husband and wife shall do all acts and things and execute all deeds, documents, instruments and writings necessary to sell Property B being the whole of the land comprised in Certificate of Title Folio Identifier (omitted) (“the property”) on the following terms:
(a)the property be listed for sale with a real estate agent agreed between the parties;
(b)in the event that the parties cannot agree on the nomination of such agent they shall jointly approach the President of the Real Estate Institute of New South Wales and accept his or her nomination of a real estate agent to sell the property;
(c)in the event the parties are unable to agree on a listing price, the time of listing, the method of sale and conditions of such sale in respect of the property they shall accept the recommendations of the real estate agent appointed pursuant to these orders for the sale of the property in respect of each such matter;
(d)upon completion of the sale the proceeds of sale shall be applied as followed:
(i)firstly to pay all costs, commissions and expenses incurred in respect of the sale;
(ii)secondly to pay all outstanding municipal rates and other levies due in respect of the property;
(iii)thirdly to pay the balance as to 61% less $1,548.88 to the husband and 39% plus $1,548.88 to the wife.
That each party is otherwise declared the owner of all property in their possession or under their control.
That in the event that either party shall fail, neglect or refuse to execute any deed, instrument or document to give validity and effect to these orders then upon the other party filing an affidavit setting out such failure, neglect or refusal then a Registrar or a Deputy Registrar of the Newcastle registry of the Court is hereby appointed pursuant to section 106A of the Family Law Act to execute any such deed, instrument or document in the name of the party who defaults and to do all things necessary to give validity to the operation of the deed, instrument or document.
IT IS NOTED that publication of this judgment under the pseudonym Booth & Booth is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT NEWCASTLE |
NCC 1700 of 2009
| MS BOOTH |
Applicant
And
| MR BOOTH |
Respondent
REASONS FOR JUDGMENT
Introduction
These are property settlement proceedings.
The wife and husband, who are 46 and 70 years old respectively, separated in February 2009 after a relationship of more than 25 years and a marriage of 19 years.
The only significant asset available for division is the former matrimonial home at Property B, valued at $700,000.00.
The wife proposed that the Property B property be sold and that she receive half of the sale proceeds. This would allow her to purchase a modest home in the country area where she now lives.
The husband brought the Property B property into the relationship unencumbered. He proposed that he retain it and pay the wife $75,000.00.
The Evidence
The wife relied on her application filed on 16 November 2009 and her affidavit and financial statement filed on 30 August 2010.
The husband relied on his response and financial statement filed on 22 January 2010 and his affidavit filed on 8 September 2010.
Both parties were cross-examined.
The husband was guilty of a serious non-disclosure. In his financial statement he declared that he was in receipt of Centrelink benefits and a small pension from the (country omitted) Government. During cross-examination he admitted that he regularly did jobs for a friend and received cash payments and non-cash benefits in exchange. On any objective view the husband’s evidence amounted to an admission that he was earning income from employment. The husband was given a certificate pursuant to s.128 of the Evidence Act before being required to answer questions about his income earning activities.
The husband’s failure to make full and frank disclosure of his financial circumstances reflects poorly on his credit, and the wife’s counsel urged me to make a general finding that where there was a dispute between the evidence of the husband and the evidence of the wife the wife’s evidence should be preferred.
The wife however was also not an entirely satisfactory witness. She took refuge during cross-examination in many complaints about poor memory. I do not intend to make a general finding that I prefer one party’s evidence to that of the other but will assess the evidence on each disputed issue as it arises.
Background
The husband was born in (country omitted) in 1940. He married his first wife in (country omitted) in 1962 and emigrated with her to Australia.
The husband and his first wife purchased Property B in 1971. They had seven children (one of whom died in infancy) before separating in 1981.
After separation from his first wife the husband became the primary carer of the children of his first marriage, and in 1982 he became the sole owner of the Property B property following a property settlement. At about the same time he ceased work due to ill health and commenced receiving a disability pension. He continued to receive this pension until 2005, when he became an aged pensioner.
The husband met the wife in these proceedings in November 1983 when she was 19 and the husband 43. The wife was unemployed and was in receipt of unemployment benefits.
The husband and wife commenced living together in the Property B property in December 1983 and married in (omitted) 1990.
There are four children of this marriage: W, born in (omitted) 1984, now 26, X, born in (omitted) 1991, now 19, Y, born in (omitted) 1995, now 15 and Z, born in (omitted) 1998, now 12.
The husband and wife separated in February 2009.
On separation the wife left the Property B property and began living elsewhere in Sydney. In about October 2009 she moved to (omitted) in country NSW where she remains. Since March 2010 she has been the carer for one Mr C and she receives a carer’s pension.
The husband has remained living in the Property B property with X, Y and Z. W was an independent adult when the parties separated.
The law applicable to the resolution of disputes about property settlement
Pursuant to s.79 of the Family Law Act, a court can make such orders as it considers appropriate altering the parties’ interests in property. s.79 (2) provides that the court shall not make an order under this section unless the court considers that it is just and equitable to do so.
The procedure usually adopted in determining applications for property settlement is:
a)to identify and value the assets and liabilities of the parties;
b)to assess the contributions of the parties under s.79(4)(a), (b) and (c) and to express those contributions as a percentage;
c)to consider the matters set out in s.79(4)(d),(e),(f) and (g), which include the matters in s.75(2), so far as they are relevant, and to determine whether any adjustment should be made as a result to the contribution based entitlements;
d)to consider the effect of those findings and resolve what orders are just and equitable in all the circumstances of the case.
It is appropriate to follow this procedure in the present case.
The Assets
At the commencement of the hearing counsel for the parties’ agreed that the assets were as follows:
Description
Ownership
Value
Property B Husband $700,000.00 (omitted) Bank account Husband $2,242.00 Ford (omitted) Husband $3,000.00 Toyota (omitted) utility Husband $1,500.00 Household contents Husband $2,000.00 (omitted) Bank account Wife $50.00 Toyota (omitted) Wife $1,000.00 Household contents Wife $2,000.00 Total $711,792.00
The husband admitted during cross-examination that he also owned tools and a caravan. It seems likely that the wife was aware of the existence of the tools prior to the hearing, although she made no mention of them in her affidavit and there was no evidence that she agitated prior to the hearing to have the tools valued. The caravan was acquired by the husband post separation.
As there is no evidence of the value of these items I cannot usefully include them in the pool but I will take the husband’s ownership of them into account when assessing s.75(2) matters.
There are no relevant liabilities and neither party has any superannuation.
Contributions
The wife had no significant assets at the commencement of cohabitation.
The husband owned:
a)Property B unencumbered;
b)furniture;
c)a motor vehicle;
d)a boat.
The parties agreed that the Property B property was worth $70,000.00 in December 1983. No admissible evidence was provided about the value of the remainder of the items.
The wife was engaged primarily in home duties during the relationship but she did bring in some income. In about 1996 she was recognised by Centrelink as the husband’s carer and commenced receiving a carer’s pension. In 2007 she commenced working at least 10 hours per fortnight as a (omitted) and as far as I can gather continued in this employment until separation.
The husband was in receipt of Centrelink benefits throughout the relationship.
It emerged during cross-examination that the husband was working for a Mr J (my spelling). The husband gave some vague information about the work he did for Mr J and admitted that in exchange Mr J had bought him a car (which is in the pool of assets), given him a caravan, sometimes bought him food, had paid for overseas travel for him and regularly gave him cash.
It seems somewhat unlikely that the husband commenced earning this income and receiving these benefits from Mr J only after separation, which occurred when he was 68 years old. The questions put to the husband by the wife’s counsel during cross-examination suggest a knowledge by the wife of the husband’s activities which it is hard to believe she could have obtained after separation, and the husband, once forced to admit his association with Mr J, hinted at the fact that he had also worked for Mr J during the relationship and indeed suggested that the wife had too.
However the wife played a careful hand in relation to this issue. She made no reference in her affidavit to the husband’s financial relationship with Mr J, and her counsel was careful not to suggest to the husband that he had engaged in these income earning activities during the relationship. While I have some suspicions that the husband earned undeclared income during as well as after the end of the relationship, the evidence does not allow me to make a finding to this effect.
I am satisfied that all of the money received by the parties during the relationship (from Centrelink in the case of the husband and from Centrelink and paid employment in the case of the wife) went to the support of the family and maintenance and improvement of the home. The fact that the husband may have spent some money on his (hobby omitted) activities does not alter my view. Parties to a marriage are entitled to spend some money on hobbies and interests.
As to non-financial contributions, it was the wife’s case that she was the primary homemaker and parent.
I accept that the wife played the primary role in parenting the children. I also accept that she made a contribution to the welfare of the family at the beginning of the relationship by assisting the husband with the care of the youngest two or three children from his first marriage for some period (perhaps less than two years).
I accept the wife’s evidence that she did cooking, cleaning and washing during the relationship and that she cared for the husband when he was ill.
The husband’s evidence was that he also did some homemaker and parenting tasks. He gave some brief evidence about the nature of the parenting tasks and gave evidence that he did the cooking during the first four years of the relationship. It was his evidence that he maintained the lawns and garden and carried out repairs and maintenance to the home.
In her affidavit the wife accused the husband of neglecting her and the children and spending his time looking after his (hobby omitted) and visiting friends, and was not willing to concede that he had done anything at all on the home front save for helping to look after his children from his first marriage in the early years. However she made some grudging concessions during cross-examination (for example saying that he had done “not much” of the domestic work rather than none at all) and in answer to some questions (for example in respect of a query about whether the husband did the laundry) resorted to saying she could not recall.
I am satisfied that the husband did make some contribution to domestic and parenting duties, although I consider it more likely than not that the relationship/marriage proceeded on traditional lines and that the wife carried out the majority of the parenting and the cooking/ washing/cleaning tasks.
During the relationship some improvements were carried out to the home and I accept the wife’s evidence that she assisted with the work, which included the removal and disposal of rendering in the front bedroom, removal of carpet and preparation of floorboards for varnishing, renovation of a bathroom, painting the interior of the home on two occasions and painting parts of the exterior on other occasions, as well as designing and planting gardens.
I accept the husband’s evidence however that he was the person primarily involved in removing rendering, removing carpet, preparing and varnishing floorboards, doing painting, renovating the bathroom, and designing and planting gardens and that the wife simply assisted him with these tasks. I accept that he carried out other tasks including fixing leaks in the roof, replacing wooden window frames with aluminium frames, converting the laundry into a bathroom and enlarging the garage. It is consistent with the information about the parties’ skills and backgrounds (such as it was) that the husband was primarily responsible for carrying out or orchestrating these tasks.
The wife’s counsel pressed me strongly to make a finding that the wife contributed more than the husband during the parties’ twenty six year relationship, not just as homemaker and parent but overall when all financial and non-financial contributions were considered. He relied on the following matters:
a)the husband provided the most meagre evidence in his affidavit about his contributions as a parent, suggesting that he really did not do much in this regard at all;
b)the husband gave evidence in his affidavit that he took the children to extra-curricular activities but conceded during cross-examination that this was incorrect;
c)in an Application for Consent Orders filed on 7 July 2009 (although no orders were subsequently made) the husband conceded that the wife “made greater contributions” as homemaker and parent[1].
[1] Exhibit B
I do not accept that these matters should lead to a finding that the wife’s contributions during the relationship exceeded the husband’s overall.
Firstly, the evidence provided by the wife in her affidavit about her parenting contributions was almost as meagre as that provided by the husband and the meagreness of evidence is therefore not a good reason to disregard the husband’s evidence. Secondly the wife, like the husband, was guilty of inaccuracies in her evidence about contributions. In her affidavit for example she asserted that she “Mr Booth would never help with any domestic duties”, but during cross-examination amended this to say that he did not help much. Finally, the fact that the husband conceded in an earlier document that the wife was the primary homemaker and parent during the relationship does not preclude him from arguing that the parties’ financial and non-financial contributions of all kinds during the relationship should be assessed as equal.
In considering the husband’s contributions during the relationship it is important not to lose sight of the fact that he introduced the Property B property, which provided accommodation for the family throughout the relationship without the necessity for payment of rent or a mortgage.
In Mallett & Mallett[2] the High Court emphasised that a judicial officer should not simply assume that contributions by the parties in a long marriage were equal but must “evaluate the respective contributions of the husband and wife under paragraphs (a) and (b) of ss.(4) difficult though that may be in some cases.”
[2] Mallett & Mallett (1984) 156 CLR 605
I am satisfied that during this relationship each party contributed to the parenting and homemaking tasks, maintenance and repairs and work on the home and financial support of the family to the extent of the funds and assets available to them and in accordance with their aptitudes and abilities. I am satisfied that the financial and non-financial contributions of the parties during the relationship should be assessed as equal.
After separation in February 2009 X, Y and Z continued to live with the husband. X turned 18 in (omitted) 2009 and has now left school and is doing tertiary education. Y and Z are still at school.
The wife is paying child support of $30.00 per month[3] for the two youngest children, the money being deducted from her Centrelink payments. No information was provided about when these payments commenced and on any view the wife is paying a minimal amount of child support.
[3] Wife’s affidavit filed 30 August 2010 annexure E
The wife said that she also gave Y and Z $60.00 per fortnight between them by placing this amount in X’s bank account and asking that X distribute it to the other children. The husband said that he had no knowledge of this arrangement.
X did not give evidence and it is impossible for me to make findings about whether he has in fact been passing $60.00 per fortnight on to his brothers. In any event this payment is of no direct assistance to the husband in meeting the needs of the children.
The wife has spent limited time with X, Y and Z since separation.
It was the wife’s case that she visited the children regularly for a short period immediately after separation. The husband disputed this and I am unable to resolve this dispute. The husband was not a witness of credit and the wife’s evidence was not always reliable and I have no reason to prefer the evidence of one of them to that of the other on this issue.
There was no dispute however that between October 2009 and the date of the hearing the wife did not see Y and Z other than when she visited them in Sydney in July 2010.
It was the husband’s case that his post-separation contributions exceeded those of the wife because he cared for Y and Z in particular for more than eighteen months after separation with minimal financial and non-financial contribution from the wife.
It was the wife’s case that the husband’s rent free occupation of the former matrimonial home offset this post separation parenting contribution. However this is not a case where the wife is a joint owner of the home. She had no legal right to occupy it except by licence of the husband and she did not give up a legal right when she left the home upon separation.
The husband made a consistent and important financial and non-financial contribution to the care of Y & Z post-separation and I am satisfied that his post separation contributions exceeded those of the wife.
Conclusion about contributions
The parties did not acquire any significant assets during the relationship. The principal asset available for distribution is the Property B property which the husband brought into the relationship.
The property was worth $70,000.00 in 1983 or a little under 10% of the pool as it currently stands. However it would be wrong to simply focus on the value of the property in 1983. In Williams & Williams[4] the Full Court said as follows:
We think that there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution towards the parties. Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing or the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation.
[4] Williams & Williams [2007]FamCA313
The Property B property is currently worth $700,000.00, or very close to 100% of the pool. The parties did some work on the property during the relationship but there was no evidence that the work materially contributed to the property’s increase in value. It is reasonable to infer that the increase in value of the property was largely the result of market forces.
The husband’s initial contribution of the home therefore looms large and must be given weight, but the decided cases have repeatedly emphasised that in a final assessment of contributions all contributions made during a marriage must be weighed and balanced, and that the significance of an initial contribution diminishes as time passes and other contributions come into play.
In Williams & Williams the Full Court added after the above exhortation to have regard to the current value of the property:
But in so doing it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.
In Pierce & Pierce the Full Court said as follows:[5]
In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached in all the circumstances to the initial contribution. It is necessary to weigh the initial contributions by a party with all the other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the former matrimonial home.
[5] Pierce & Pierce (1999) FLC92-844
How then to assess contributions in a case where the husband introduced the only significant asset and made greater post separation contributions but in which the relationship was a long one and the wife made significant contributions over a period of more than twenty five years?
The wife’s counsel submitted that contributions should be assessed as equal, but this submission relied on me making a finding that the wife contributed more than the husband during the relationship, and I have declined to make that finding.
The husband’s counsel submitted that contributions should be assessed as 75/25 in the husband’s favour and relied heavily on the importance of his introduction of the Property B property. I do not accept that such an assessment gives adequate recognition to the wife’s contributions.
This was a long marriage and when the wife’s contributions over a period of more than twenty five years, including her contributions as homemaker and parent, her financial contributions from income and her contribution to the maintenance and improvement of the home from time to time are weighed and balanced with the contributions of the husband during the same period, namely his important contribution in introducing the home which has appreciated so greatly in value during the relationship and his unmatched post separation contribution to the care of the two youngest children, it is reasonable to assess contributions as 61% by the husband and 39% by the wife. The 1% is my attempt to give some meaningful recognition to the husband’s important post separation contribution to the care of the children.
This would entitle the husband to $434,193.12 and the wife to $277,598.88.
The matters in s.79(4)(d)-(g)
Ss. 79(4)(d) and (f) of the Family Law Act have no relevance in these proceedings. S.79(4)(g) requires me to take the payment of child support into account. I have taken the past payment of child support into account in assessing contributions and I will take child support likely to be paid in the future into account in the context of considering s.75(2) matters.
As required by s.79(4)(e) I therefore now turn to consider the matters in s. 75(2).
The wife is 46. It was her evidence that she suffered from postnatal depression following W’s birth in 1984 and that in 1986 she began suffering from Obsessive Compulsive Cleaning (sic) Disorder. It was also her evidence that she currently suffered from anxiety attacks and stress.
The husband accepted that the wife had suffered during the marriage from the conditions she described, but the wife produced no medical evidence about her current state of health and in her affidavit said that she was “…of sound physical and mental capacity for gainful employment.”[6]
[6] Wife’s affidavit filed 30 August 2010 paragraph 77
The wife is not in paid employment at the moment and her counsel submitted that because of her age and her lack of qualifications and experience there must be considerable doubt about her capacity to obtain paid employment in the future.
I do not accept this submission.
The wife’s age (46) is certainly not a barrier in itself to her obtaining employment.
It is true that the wife has limited workplace skills and experience. She was on unemployment benefits when she and the husband met in 1983, and she did not work in paid employment between 1983 and 2007. In 2007 she commenced part-time work as a (omitted).
The wife’s only qualification is a (qualifications omitted) which she obtained several years ago and which was designed to provide her with the knowledge and skills to work in (occupation omitted). The wife has never actually worked in an (omitted) and I accept that there is nothing which inspires confidence that she could easily obtain an (omitted) job.
There are other kinds of employment however. The wife has experience as a (occupation omitted) and there was no evidence that she could not do this kind of work now if she chose.
There was no evidence that the wife had actively but unsuccessfully looked for work since separation and the only reason she gave for not being employed at present was that there was no work available for (omitted) in (omitted).
I accept that given the wife’s history and her lack of qualifications the only work likely to be available to her is unskilled work such as (omitted) (although there are other unskilled occupations), and I accept that any work the wife obtains may not be highly paid. I do not accept however that the wife is incapable of obtaining paid employment of some kind should she choose to look for it.
The wife is entitled to $277,598.88 on the basis of contributions. She has assets to the value of $3,050.00 in her possession and would therefore be entitled to $274,548.88 from the sale of the Property B property. Her evidence about house prices in (omitted) suggests that this would go a considerable way toward enabling her to purchase a modest home in this location.
No evidence was given about whether the payment of legal fees was likely to impact on the net amount available to the wife.
The wife does not have the care of any of the children but said that it was possible that she might have the care of Z in the future. However there was no evidence that Z was likely to voluntarily leave Sydney and the husband’s care and move to country NSW to live with the wife. The wife did not suggest that Z was unhappy living with the husband or was expressing any desire to change residence. The wife has not brought any application for parenting orders, and has spent almost no time with Z and Y since October 2009. I could not find on the state of the evidence that there was any real likelihood that Z might live with the wife in the future.
There was no evidence that the husband’s health was likely to deteriorate to the point where he could not care for Z.
I have to take into account a standard of living which is appropriate in all the circumstances.
The wife is currently renting with friends and her evidence was that she “considered her standard of living reasonable given the current circumstances.”[7] There was no evidence that purchase of a home would materially improve the wife’s standard of living although it would certainly provide her with better financial security for the longer term.
[7] Wife’s affidavit filed 30 August 2010 paragraph 81
There was no evidence that the wife had re-partnered.
The wife’s counsel submitted that the difference in the parties’ life expectancies was a relevant consideration and that it favoured the wife. According to life expectancy tables the husband (70) has a life expectancy of 16.29 years while the wife (46) has a life expectancy of 42.29 years.
Life expectancy is occasionally taken into account in property cases, but usually in circumstances where one party is suffering from a terminal illness and does not have long to live. In Lawrie & Lawrie[8] for example the husband had terminal cancer and it was agreed had a life expectancy of about six months. The marriage had been a long one. The husband was living in the former matrimonial home while the wife was living in Housing Commission flat in modest and basic circumstances. The trial judge found that contributions should be assessed as equal. He held that except for the husband’s limited future financial needs he would not have diverged from a 50/50 division of the property. However in view of the husband’s life expectancy he ordered that the husband have the right to live in the home until his death and that upon his death the home be sold and the proceeds be distributed 65% to the wife and 35% to the husband’s estate. It was envisaged that this would provide the wife with sufficient money to purchase a suitable dwelling.
[8] Lawrie & Lawrie(1981)FLC91-102
The Full Court by a majority dismissed the husband’s appeal against these orders, which Fogarty J described as “proper and sensible in the circumstances.” Fogarty J went on to say however:
…..any concern that the upholding of the orders in this case may open the floodgates to disputes in other cases as to the future life expectancy of parties is misplaced. This case is unique because of the particular circumstances that the evidence as to the husband’s life expectancy was clear and not in controversy and related to an early future date. Further and in any event, the task is to do what is just in the case at hand.
The wife’s counsel did not spell out which provisions of s.75(2) he relied on in support of his submission that life expectancy was relevant in the case before me and I struggle to understand how the wife’s potentially longer life expectancy is a relevant factor favouring for the wife. If the husband has 16.29 years to live he does not have limited future needs, and the wife’s counsel did not suggest that I allow the husband to live in the Property B property until he died and then make provision for the wife by giving her a percentage share of the property well in excess of 50%.
It could be more persuasively argued that the difference in the parties’ ages favours the husband, and perhaps the submission by the wife’s counsel was an attempt to head off this submission.
The wife is fit and healthy and capable of obtaining some employment, and has perhaps two decades in front of her, barring accidents or illness, in which to exercise that capacity and improve her own situation. On the other hand while the evidence reveals that the husband is currently working, it seems somewhat unlikely that he will still be valued as an employee when he is 90.
Given what emerged during the hearing about the husband however it is important not to make hasty assumptions about his situation but rather to look closely at the evidence.
The husband is 70. He is in receipt of an aged pension and a small pension of $18.00 per week from the (country omitted) Government.[9]
[9] Husband’s financial statement Part D15.
Although the husband himself has an eccentric view of what is meant by working in paid employment (he said in reference to his activities with Mr J “I don’t call it work - he helps me and I help him”) I am satisfied that the husband is working and earning an income. The husband is also a (hobby omitted). He denied that he sold (omitted) for profit and claimed that he was unable to do so because he did not have a licence, but admitted that in order to acquire the Ford motor vehicle after separation he gave “(hobby omitted) plus cash.”
The husband did not reveal in his affidavit that he was earning income, and he provided insufficient evidence during cross-examination (despite the s.128 certificate) to allow me to form a view about exactly how much he receives from Mr J from time to time in cash or in kind. I also have no idea how much the husband’s (hobby omitted) activities are worth to him.
It may be that the (hobby omitted) activities are not particularly lucrative once the costs of maintaining the (hobby omitted) are factored in, but the same cannot be said about the husband’s employment. He admitted that he had received food, overseas travel, a motor vehicle and a caravan from Mr J and that he received cash in varying amounts such as “$100.00 - $50.00 - $200.00”.
There was no evidence that the husband had health problems which were likely to affect his income earning capacity in the immediate future. He provided no medical evidence and when asked in cross-examination whether he intended to continue working for Mr J he said “If I can handle it, why not?”
On the basis of contributions the husband’s entitled to $434,193.12. His financial situation is perhaps more realistically viewed from the perspective that if the assets are divided in accordance with percentages, he will be required to pay the wife $274,548.88 in order to retain the Property B property. There was no evidence that this was likely to be achievable for the husband and if I make an order to this effect he may well be forced to sell the Property B property.
However in a worst case scenario, if the property is sold and if the husband is unable to purchase a modest unit or dwelling with the money he receives from the sale and is required to rent, he will have capital to draw on to supplement his income even once he ceases working and is solely in receipt of Centrelink benefits. He should thus even in those circumstances be able to maintain a reasonable standard of living.
In addition to the items from the pool which are in his possession the husband owns some tools and a caravan. Although I do not know how much these items are worth it is reasonable to infer that ownership of these assets gives the husband only a fairly marginal advantage over the wife in dollar terms. The husband owes something less than $3,400.00 to (omitted) for the purchase of a bed. By agreement this debt was not included as a liability as the bed was not included in the pool as an asset. The husband is paying $26.00 per week to (omitted). He also has a small credit card debt. While the husband continues to work for Mr J these debts are easily manageable.
No evidence was given about the husband’s liability for legal fees.
The husband has the care of Y, aged 15 and Z, aged 12. His evidence during cross-examination was that Y would start a (omitted) apprenticeship at the end of 2010. This may not of course mean the end of the husband having to support Y but it will reduce that requirement and will see Y on the way to independence.
Z, 12, has just commenced high school. It is impossible for me to make findings about whether he too will leave school in his mid-teens or whether he will complete high school.
The wife is paying $30.00 per month child support for Y and Z. As previously observed, the $30.00 per fortnight per child she says she pays to these children in addition, even if received by them, does not assist the husband.
The husband is assured of receiving child support from the wife while she remains on Centrelink benefits because it will be deducted from her benefits. However, $30.00 per month does not do much to assist the husband to provide for Z and Y. If the wife gains paid employment (and there was no evidence that she was motivated to do so at the present time), she is likely to be in low paid employment and this may not result in the husband receiving a great deal more in child support in the future.
The wife’s counsel urged me not to give undue weight to the husband’s responsibility for the care of the children when assessing s.75(2) matters on the basis that the husband was in receipt of Centrelink benefits and in reality the children were being supported by the public purse and not the husband.
This submission is not soundly based on the evidence as the husband is not solely in receipt of Centrelink benefits.
Even if it were soundly based on the evidence it could not succeed. The wife complained in her affidavit about how hard it was to make ends meet for the family during the relationship when both parties were in receipt of Centrelink benefits. Centrelink benefits provide a very basic level of income. It might well be just and equitable, in circumstances where one party is in receipt of Centrelink benefits and the other is capable of paying only minimal child support for the party caring for the children to receive an extra share of the property to assist them in the future.
The husband has not re-partnered.
Conclusion about s.75(2) matters
The husband’s counsel in his outline of case document submitted that the husband should receive a 10% adjustment in his favour for s.75(2) matters because of his responsibility to provide accommodation and financial support for the children and because, “due to his age and infirmity, the [husband] is unable to obtain gainful employment.”
The difficulty for the husband is that the evidence which emerged showed that not all of those things were true.
I accept that the husband will need to provide accommodation for Z for the next few years but accommodation can be provided by renting as well as by owning property.
I accept that the husband can expect fairly minimal child support from the wife, regardless of whether she remains on Centrelink benefits or obtains a job. I accept that the husband will shoulder the major burden of financially supporting Z over the next few years. I accept that the husband may need to continue to assist Y even if Y obtains an apprenticeship.
In many circumstances this situation would result in the husband receiving something extra from the property pool in addition to his contribution based entitlement.
This matter is complicated however by the husband’s failure to make full and frank disclosure. There are circumstances in which it is not appropriate to make an adjustment in favour of the party with the care of the children because despite the fact that little child support is being paid, the party with the care of the children has at the same time the much stronger income earning capacity. I cannot make a finding about the husband’s income earning capacity in this case and the reason I cannot do so is because the husband first hid the fact that he was earning income and when it was revealed, made some very limited admissions about the remuneration he was receiving and about his financial relationship with Mr J.
The comparative circumstances of the parties therefore as they are known to me are that the husband has the care of the children but an unknown income earning capacity and that the wife does not pay much child support but has emerged from a 26 year marriage in which she did little paid work with a capacity to earn only a fairly low income.
It may be that in time the wife will enter the paid workforce and certainly she has in theory a longer working life in front of her. On the other hand at present the husband is working and receiving unknown benefits and the wife is out of the workforce, so in the immediate future it may be the husband rather than the wife who makes better financial headway, despite his care of the children.
It was the wife’s case that there should be no adjustment for s.75(2) factors and given that I am unable to make a proper comparison of the parties circumstances because of the husband’s failure to make full and frank disclosure, I consider this the appropriate outcome. The wife will thus remain entitled to $277,598.88 and the husband to $434,193.12
Whether the proposed orders, and the outcome, are just and equitable
The wife has assets to the value of $3,050.00 in her possession and the husband will need to pay her $274,548.88 if he is to retain the Property B property.
There was no evidence that the husband would be able to raise such a sum and the result of ordering the payment of this sum may be that the husband loses the home, but I cannot decline to make the order for this reason alone.
It will be sad if the husband loses the home he has owned and lived in for forty years but the following comments by the Full Court in Lee Steere v Lee Steere[10] apply just as much to the situation of home ownership as they do to the situation of farm ownership:
In our view, the correct principle was laid down by Asche J in Magas and Magas (1980) FLC 90-885, a decision of the Full Court on appeal from the Family Court of Western Australia. His Honour said there at p. 75,591:
If arrangements can be made which would relieve the spouse who is working a farm as a farmer, from selling the farm but at the same time doing proper justice to the claim of the spouse who is not living on the farm, then of course those arrangements should be made.
However, His Honour then went on to say:
If there is no other way to do that which is just and equitable then a sale must take place. It becomes an incident of the sad fact that, when two persons separate, property which might have given them together a reasonable competence will not be sufficient for each when divided. That is an inescapable situation and cannot be used as an argument to deprive one party of that to which he or she is otherwise properly entitled.
[10] Lee Steere v Lee Steere (1998) FLC 91-626
As to the appropriate orders I intend to give the husband an opportunity to try to come up with the required funds, because while it seems unlikely that he will be able to do so it is not beyond the bounds of possibility and no injustice will be done to the wife if she has to wait an additional 60 days before the home is listed for sale.
If the husband is unable to raise the money by the end of 60 days then the orders will be home is sold and the proceeds divided as to 61% to the husband and 39% to the wife.
For all of the above reasons the orders shall be as set out at the beginning of this judgment. I am satisfied that the orders, and the outcome, are just and equitable.
I certify that the preceding one hundred and twenty nine (129) paragraphs are a true copy of the reasons for judgment of Terry FM
Associate:
Date: 23 November 2010
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