Burrowes & Waldrup
[2023] FedCFamC2F 397
•6 April 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Burrowes & Waldrup [2023] FedCFamC2F 397
File number(s): HBC 1113 of 2021 Judgment of: JUDGE TAGLIERI Date of judgment: 6 April 2023 Catchwords: FAMILY LAW – property – final orders – both parties made initial financial contributions - weight to be given to large inheritance contributed by Wife –– one or two pool approach - whether Husband’s real property to be sold – disparity of financial contributions – what adjustments required for future needs and affording Husband a reasonable standard of living in all the circumstances – two pool approach determined - 72/28 adjustment of net non-superannuation pool in favour of Wife – no adjustment to superannuation Legislation: Family Law Act 1975 (Cth) ss 75, 75(2), 75(2)(a), 75(2)(b), 75(2)(f), 75(2)(g), 79, 79(2)(n) Cases cited: Bevan & Bevan [1993] FamCA 95, (1995) FLC 92-600, 19 Fam LR 35
Bridges & Bridges [2020] FamCAFC 77
Dickons & Dickons [2012] FamCAFC 154
Dickson & Dickson [1999] FamCA 278, (1999) FLC 92-843, 24 Fam LR 460
Evans & Evans (1978) FLC ¶90-435
Ferguson and Ferguson (1978) FLC 90-500
Hurst & Hurst [2018] FamCAFC 146
Kutcher & Kutcher (1978) FLC ¶90-453
Marriage of Hickey 30 Fam LR 355
Melvin & Melvin [2018] FCCA 1847
Mitchell & Mitchell (1995) FLC ¶92-601
Phillips & Phillips [2002] FamCA 350
Pierce & Pierce [1998] FamCA 74
Stanford and Stanford [2012] HCA 52
Wagstaff and Wagstaff [2018] FCCA 927
Wilson & Wilson [1989] FamCA 34, (1989) FLC 92-033, 13 Fam LR 205
Division: Division 2 Family Law Number of paragraphs: 135 Date of hearing: 15 March 2023 Place: Hobart Solicitor for the Applicant: Ms K Foale, Simmons Wolfhagen Solicitor for the Respondent: Ms H Bassett, Walsh Day Mihal ORDERS
HBC 1113 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS BURROWES
Applicant
AND: MR WALDRUP
Respondent
ORDER MADE BY:
JUDGE TAGLIERI
DATE OF ORDER:
6 APRIL 2023
THE COURT ORDERS THAT:
1.The following non-superannuation assets of the parties be divided such that:
(a)The Wife retains for her sole use and ownership:
(i)The property at B Street, Town C, subject to mortgage for which she will be solely liable;
(ii)Her Motor Vehicle 1;
(iii)Her animals, trailer and gear;
(iv)Motor Vehicle 2;
(v)Farm Equipment 1;
(vi)Farm Equipment 2 and Farm Equipment 3;
(vii)Her bank accounts.
(b)The Husband retains for his sole use and ownership:
(i)Motor Vehicle 3;
(ii)Motor Vehicle 4;
(iii)Farm Equipment 4;
(iv)ANZ Bank account
2.Subject to Order 2A, each party is solely entitled to the exclusion of the other to all other property and chattels in the possession of such party at the date of this order and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s records, insurance policies are deemed to be in the possession of the person named as owner or otherwise named as the beneficiary and superannuation entitlements are deemed to be in the possession of the person named as the employee in the records of the relevant funds.
2A.By consent the husband make available for collection within 28 days any family photographs and personal items at the property at D Street, Town E belonging to the wife, that he does not seek to retain.
3.THAT neither the Wife nor the Husband shall incur in the name of the other, any account, debt or any other liability and subject to the provisions of this Order, shall pay or discharge all accounts, debts and other liabilities presently standing in their respective names or hereinafter incurred by either of them and shall at all times keep the other indemnified therefrom and from all claims, actions and other expenses in connection therewith.
4.That the Wife solely retain the right and benefits of the Super Fund 1 in her name and the Husband will have no entitlement to an interest in the same.
5.The property situated at D Street, Town E (“the Town E Property”) and registered in the name of the Husband be sold and for this purpose the following terms will apply:
(a)The sale will be by private treaty with such agent as the Husband and Wife agree to appoint and failing agreement as to the agent to be appointed within twenty eight (28) days of the Default, then be listed for sale with such agent as the President of the Real Estate Institute of Tasmania (“The President”) shall nominate (“the Agent”) and the costs of and incidental to the request of the President and such appointment to be borne by Husband and the Wife in equal shares as and when they fall due;
(b)The appointment of the Agent shall be on a sole agency basis for a period of not less than six (6) months;
(c)The Agent is hereby authorised and the Husband is to sign any document requested by the Agent within 7 days of the request to:
(i)Authorise the agent to communicate with the Wife;
(ii)Direct the agent to obtain consent from the Wife as to the terms of the Sole Agency Agreement; listing price (and any variation in that listing price); proposed marketing of and the sale price of the Town E Property and to provide feedback to the Wife as to the progress with the sale as if she were a joint owner named on title of the Town E Property;
(iii)Direct the Agent to first obtain, in writing from the Wife or the Wife’s solicitors, the Wife’s agreement to accept any offer to purchase the Town E Property, which the Husband proposes to accept.
(d)In the event of disagreement between the Husband and Wife on any matter referred to in (c) above:-
(i)Either the Husband or Wife may request that the President or his nominee determine the matter in dispute.
(ii)The cost of the President’s determination shall be borne equally between the Husband and Wife.
(e)The Husband will co-operate in every way with the Agent including (without limiting the generality of the foregoing):
(i)making the key to the Town E Property available to the Agent.
(ii)allowing inspection of the Town E Property at all reasonable times requested by the Agent.
(iii)not doing or saying anything to hinder or prevent a sale being effected.
(iv)ensuring the Town E Property including the grounds are in a neat and clean condition at the time of inspection by the Agent and/or prospective purchasers; and
(v)upon completion of the sale, the net proceeds of sale be paid to the Trust account of Walsh Day James Mihal.
(f)By consent the parties will engage F Company, Mr H for the purposes of the sale of the Town E property.
6.Notwithstanding Order 2, the Motor Vehicle 5 in the name of the Husband be sold and the net sale proceeds of sale be paid to the Trust account of Walsh Day James Mihal and for this purpose, the Husband and Wife are to agree within twenty eight (28) days the basis upon which sale is to be effected.
7.Notwithstanding Order 2, the Motor Vehicle 6 presently in the possession of the Husband be sold and the net sale proceeds of sale be paid to the Trust account of Walsh Day James Mihal and for this purpose, the Husband and Wife are to agree within twenty eight (28) days the basis upon which sale is to be effected.
8.Upon all sale proceeds referred to at orders 5, 6 and 7 being in the Trust account of Walsh Day James Mihal, the parties are to reach agreement about the calculation of the distribution of the funds held in trust so to achieve a 72/28 adjustment in favour of the Wife of the net non-superannuation assets in accordance with the reasons for judgment.
THE COURT NOTES THAT:
A.For the avoidance of doubt, no adjustment is to be made for the chattels, household effects and other property which each party currently has in their possession for the reasons at [71] of this judgment.
B.For the avoidance of doubt for the purposes of order 8 the value of items 1, 2 and 5 ordered to be sold will be determined upon sale as the agreed sale price, less agent’s costs, less conveyance costs.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Judge Taglieri
These are property proceedings between the applicant wife Ms Burrowes (“the Wife”) who is 59 years of age and the respondent husband Mr Waldrup (“the Husband”) who is 68 years of age.
On any view of the evidence, the parties were in a marriage and/or marriage like relationship for a relatively short time. On the Husbands’ account the relationship was for about five and a half years, but on the Wife’s version it was about three and a half years.
There is significant dispute about what contributions each of the parties made during the relationship, but there is little dispute as to what assets are in the matrimonial asset pool. It is evident that there is also agreement about the values of most assets.[1]
[1] Parties’ Case Outlines filed 9 March 2023 by Wife and 10 March 2023 by the Husband.
Furthermore, I was advised at the start of the hearing that the parties agreed that their initial contributions at the commencement of the relationship were equal. The significant dispute relates to what treatment should be given to the substantial inheritance the Wife received in 2016 from her late mother’s estate. I was informed that the parties agreed that the sum inherited was approximately $1,800,000.
The parties both seek orders pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”), but they disagree about what orders should be made. The Husband seeks to retain the property at Town E (“the Town E property”), in which he has lived and which he brought into the relationship. It is a large rural property. However, the Wife wants the Town E property to be sold and seeks an 80/20 adjustment of the net non-superannuation assets in her favour.
THE PARTIES’ EVIDENCE
The Wife
The Wife’s trial affidavit filed 24 February 2023 was read into evidence, subject to some minor objections, which were either allowed or conceded. It is not necessary to identify the evidence that was not received. Her Financial Statement filed 9 March 2023 was also taken as read. The Wife gave some additional oral evidence with the leave of the Court and without objection. In summary, the relevant evidence of the Wife was that:
(a)She is qualified as a health care worker and works four days a week at J Centre;
(b)She made extensive improvements to the Town E property from funds received from the inheritance. This included internal and external works, groundworks, animal-related infrastructure, and fence work. The expenditure involved exceeded $600,000;
(c)She purchased vehicles and machinery for the use of the Husband in the sum of about $200,000, also from the inheritance funds she received;
(d)Following receipt of the inheritance monies, the Wife arranged to obtain financial advice and followed the suggestions or recommendations made in respect of use of the funds. In particular, three investment accounts were established: one in the name of each of the parties and a joint investment account;
(e)When the parties separated in July 2019, she arranged to obtain updated financial advice, which led to separation of the parties’ finances;
(f)She disagreed that the Husband had done most of the work related to the animals, being grooming and feeding;
(g)She disagreed that the Husband had done most of the earthworks and fencing on the Town E property. She identified photographs taken by her of various contractors, including Mr G and Mr K, whom she said were engaged and paid by her. The photos were received in evidence;[2]
[2] Exhibit A-1.
(h)She had purchased an animal and equipment for the Husband, as well as a truck to transport the animals. She identified various photos taken of the animal with the Husband and other animals with whom she said he worked and trained;[3]
[3] Exhibit A-2.
(i)The Wife denied allegations in the Husband’s affidavit contained in Annexure W01 about items of property she had taken or sold at separation and the suggestion that they were valued in total at over $300,000. However, she admitted taking and still having use of:
(i)Farm Equipment 5;
(ii)the animal L;
(iii)a trailer;
(iv)clothing;
(v)equipment that was sold with some of the animals; and
(vi)other animal-related equipment.
(j)She denied taking animal food, stating it had been used up before she moved. She gave evidence that she prepared a schedule responding to that annexed to the Husband’s affidavit, and it was tendered in evidence;[4]
(k)The only joint bank account the parties had was established from money that she received from the inheritance;
(l)The Wife’s bank statements were tendered in evidence with highlighting, demonstrating the expenditure she made from the parties’ benefit from the inheritance monies;[5]
(m)A series of photos of the Town E property tendered in evidence show the improvements made from the Wife’s inheritance;[6]
(n)She described the state of the property around the time she moved in, in 2016, stating: the gutters were bad, there were mouldy areas in the rooms, weatherboards needed painting, the yard was overgrown with fences falling down, the roof over the kitchen was leaking badly, the kitchen cupboards made of chipboard were damp and swollen, and there were gaps in walls where mice and rats were getting inside; and
(o)The total expenditure on the Town E property, demonstrated in her bank statements by the highlighting, was approximately $645,500.
[4] Exhibit A-3.
[5] Exhibit A-4 from the Wife’s tender bundle at Tab D; Exhibit A-5 from the Wife’s tender bundle at Tabs E, F and G.
[6] Exhibit A-6.
When cross-examined, the Wife:
(a)Denied that the parties had commenced cohabiting in late 2013, but agreed she stayed at the Town E property for up to two nights per week and the Husband stayed at her home in Town M at times;
(b)Agreed that she had probably had animals at the Town E property in early 2014, and had not paid boarding for her animals and others she bought and kept on the property later before she moved in full-time;
(c)Agreed that she moved into the Town E property full-time in late 2015 and that until her property at Town M sold, she let it out through short stay rentals. The fees were used to pay her mortgage;
(d)Agreed that she had resigned her employment as a health care worker in 2015 due to health difficulties and she identified her letter of resignation, which was tendered in evidence.[7] She also agreed that she had returned to work in 2020 and had not been earning an income in the prior five years;
[7] Exhibit R-1.
(e)Denied the suggestion that the Husband had assisted her in the maintenance and upkeep of her property at Town M. However, she admitted that he helped twice when preparing it for sale and when she moved out;
(f)She agreed that she had sold the Town M property for less than she had purchased it, but added that it was a case of having to sell at what the market allowed at the time;
(g)Disputed the Husband’s evidence that he had made considerable repairs to the Town E property, stating it was only after the inheritance was received in 2016 that she had arranged for most work to be done;
(h)About creation of the three investment accounts, she stated that the object of the financial advice she received was to minimise tax, maximise return, and put enough into the Husband’s name for investment so he had a superannuation pension. She identified various advices which were tendered as Exhibit R-4 and Exhibit R-5;[8]
[8] From the Husband’s tender bundle at pages 98 and 96 to 97 respectively.
(i)Conceded that, with the set-up of the investment accounts, the Husband had lost his Centrelink pension, but she added he probably got more from the inheritance than he would have otherwise received. She denied that she wanted the arrangement more than the Husband, and said they discussed it and agreed to follow the advice given;
(j)Agreed that she had arranged to separate their finances in July 2019, but disputed she had orchestrated getting all the money into her name. She added that the Husband had gone with her to the financial adviser, they received advice, and agreed a way forward;
(k)When challenged about selling items of property at a loss, the Wife agreed they were sold for less than the purchase price, but said that was normal as items were worth less as used. She said she had advertised the items on social media, and one animal was given away in return for the work a trainer had done with him;
(l)Rejected the suggestion that she had sold items at below their value;
(m)When challenged about her evidence concerning the level of the Husband’s contributions, maintained that which she had stated in evidence in chief. The effect of this was that the Husband helped with improvements and maintenance, ongoing work around the property and with the animals, but she disputed that he did more than her;
(n)When questioned about the invoices of Mr G, the Wife stated they were handwritten by Mr G, agreed there was no ABN, and that she paid him cash “to save money”;
(o)When Counsel for the Husband observed “you have put more money into the property than its worth”, the Wife simply remarked, “that’s a shame”. She then added that if the property been used as a working farm, it would have been worth more, and said it was not her fault that the Husband decided not to pursue that;
(p)She also rejected the notion that the Husband had not wanted the installation of recreational facilities at the Town E property;
(q)Agreed that she had purchased a property at Town N with inheritance money, then sold it to acquire a property at Town C;
(r)Stated that she worked 0.8 of a full-time equivalent and earned $77,000 per annum. She said that the figure identified as her income in her Financial Statement of $100,000 per annum was based on full-time work and not correct;
(s)Disputed that she was planning to retire shortly. She said that she likes her job and can manage it, despite her health conditions, working four days a week;
(t)Asked about what happened with the Town N property before it sold, she stated that it was “looked after” by a friend, but when this was further explored admitted the friend had stayed there free. Her explanation for this was that it was in return for them allowing her to live with them immediately after separation;
(u)Denied she was “reliant” on the Husband to help her around the property with the animals and household tasks or bringing in firewood because of her health and injury issues; and
(v)Maintained that Motor Vehicle 5 had been bought for the Husband because he wanted it, not because he required it to drive her to medical appointments.
The Husband
The Husband’s trial affidavit filed 7 March 2023 was read, also subject to objections, which were conceded. His Financial Statement filed the same date was also taken as read.
When cross-examined, the Husband’s evidence was, in summary, as follows:
(a)He worked in a voluntary capacity for 40 years at O Company. He was unpaid, but they provided food and accommodation;
(b)He then worked for two years in his business, but ceased that when he moved to Town E due to purchasing that property in Tasmania;
(c)When asked why he did not resume his business, he stated that he did not know. It was put to him that he felt he did not need to work because he had the inheritance from which he had bought the Town E property. He did not directly reply, but said he had about $30,000 left after buying the Town E property;
(d)He conceded that there were problems with the roof, water pipes and electrical work at the Town E property when he bought it. However, the full effect of his evidence was that it was habitable and he was doing work gradually on the property to effect repairs. The tenor of his evidence was that the property was not in as dire a condition as conveyed by the Wife;
(e)He denied the Wife had moved into live with him in late 2015, stating that she often stayed at the house earlier than that. He did concede that she moved in “full-time” in late 2015;
(f)He maintained that the feeding of the animals was shared work, and that sometimes he did it alone and sometimes they both did it. Later he maintained it was mainly he who did the work with the animals and said it was proportionally 60/40;
(g)Confusingly, he maintained that the caretaking was done when he fed the animals, but then said that the Wife probably did most of it;
(h)When challenged about evidence in his affidavit that he had “bought” hay bales, he eventually conceded it was purchased by the Wife. However, he stated he did not believe she ever collected and moved the bales of hay;
(i)When asked about the evidence that he had bought posts for fencing, again he agreed he did not pay for them and instead maintained he had collected them and helped Mr G put every post into the ground. When the photo tendered as Exhibit A-1 was put to him, he said that was only the first bulk batch of posts delivered and he later had to collect other posts;
(j)Regarding the animal stall, he maintained he had put in all the cross-bars onto the posts and hand dug the holes for the posts, except for a few which may have been pushed in with machinery by Mr G. He specifically disputed that the Wife had put the cross-bars on;
(k)Asked about the produce operation, he said he had initially harboured hope of resurrecting it, but it did not happen and only once had they got a crop from it.
(l)He agreed that the Wife had paid for the vet, care and food for the animals. He agreed that he would want it to be inferred that he was not interested in the animals;
(m)He claimed that he received less from the superannuation pension established from his investment account through P Company than he would have otherwise received from Centrelink. He identified that he had been on a Centrelink Disability Support Pension which was about $450 per week, while the income stream was only $410 per week;
(n)When played an interview about animals, he agreed he had done the interview and conceded eventually that he included himself in the reference to “[animal] people”. He agreed that the animals were his interest too for many years, but added it was not something he would action and agreed that was because he did not have the money to do so;
(o)Asked about his animal Q, the Husband’s evidence was to diminish his interest and claim in the animal, stating it was not at his instigation but went along with it to keep the Wife happy;
(p)He denied that he had instigated the purchase of the Motor Vehicle 5. However, he agreed that the Wife had bought Motor Vehicle 5, Motor Vehicle 7, and Motor Vehicle 8 and had had also the recreational facilities installed, in part for his benefit;
(q)He maintained that he did most of the domestic tasks around the home. He stated that the Wife did only five to 10 per cent of cooking, and in five years he could not recall her vacuuming, but she did tidy the pantry as it was her desire for it to be organised;
(r)He agreed that he did not bring in any cash assets other than a small amount of savings to the relationship;
(s)When asked about his statement that the Wife had taken all the funds from the inheritance at separation, he claimed ignorance of the arrangement whereby a sum of about $50,000 was given to him at the time the finances were separated;
(t)Cross-examination about this $50,000 was detailed and the Husband had many opportunities to reconsider the reliability of his evidence, but did not do so. He left the Court with the clear impression that he had to wait 12 months to be eligible for Centrelink and had no money post-separation until he resumed receiving the disability pension;
(u)He was tested about how he had produced Annexure W01 to his affidavit and attributed values to the items of property he alleged the Wife took or sold for herself. His evidence was vague, but eventually he accepted they were his estimates only rather than based on any particular knowledge or source;
(v)He rejected the evidence of the Wife about the state of disrepair of the Town E property and stated the extent of work undertaken by the Wife would not have been done by him and that he could have gradually done repairs and work himself as he had previously owned a maintenance company;
(w)Despite this, he accepted that he had been involved in choosing colours and layout of the kitchen and had been content for the work that had been undertaken because the Wife wanted it;
(x)He denied the value of the Town E property had tripled, but agreed after some pressing that it was now valued at two and a half times the price for which he had bought it. However, he stated that he did not agree the reasons for the increase;
(y)He had not recently looked for properties that he may purchase if the Town E property had to be sold, because lately he “had been in a mess”. However, he stated that he sees what properties are worth and that he would need to spend at least $500,000, and for that price would not get a property as good as the Town E property;
(z)He agreed that the Town E property is 20 hectares and has a house with four bedrooms. It was suggested to the Husband that he could purchase suitable smaller housing which he would be better able to manage due to his health issues. When shown documents revealing searches on a real estate website,[9] he accepted the search results and what they revealed, but stated he would not want to live in the four examples given;
(aa)The Husband conceded that the Wife has spent in excess of $600,000 “in connection with us”, but said he did not ask her to do so;
(bb)A fact sheet and information from the R Authority[10] were put to the Husband. He agreed the Town E property was zoned “Rural” and accepted that subdivision was only permissible as a discretionary use because there were minimum lot sizes required for subdivision of rural land.
[9] Exhibit A-7.
[10] Exhibit A-9 and Exhibit A-10.
In re-examination, some of the evidence given by the Husband was clarified. He stated that he had done roof repairs over the lounge room with a friend and intended to repair the leak over the kitchen, but the Wife got impatient and arranged for it to be done. He stated that the property was useable when the Wife moved in, but he suggested it did not look as good as the Wife wanted. He also stated that he had started paying for help with upkeep of the property in 2014.
He said he could not agree that the four example properties shown to him in Exhibit A-7 were suitable for his purchase and, in effect, his evidence was that he did not want to live in a unit or suburban area or deal with closely-adjacent neighbours.
Counsel for the Husband tendered a number of documents from the Husband’s tender bundle, which consisted of financial documents relating to the investments placed with P Company.[11]
[11] Exhibit R-7 from the Husband’s tender bundle at pages 82, 86, 96, 97, and 99 to 102.
CONTENTIONS OF THE PARTIES
Both parties relied upon the case outlines filed by the Wife on 9 March 2023 and by the Husband on 10 March 2023.
Counsel for the Wife’s submitted that there were three limited issues for determination by the Court:
·First, the weight to be given to the Wife’s contribution of close to $2 million from the inheritance;
·Second, the impact of the parties’ short relationship on the weight attributed to the contribution; and
·Third, whether there ought to be any adjustments for the considerations set out in s 75(2) of the Act and, if so, what those adjustments ought to be.
It was submitted that a two-pool approach should be taken and that the parties had already agreed that the superannuation pool should not be adjusted because of:
(a)The short duration of the relationship; and
(b)The agreed fact that the Wife already had her superannuation interest prior to cohabitation and that it was “topped up” during the relationship solely by the inheritance she received.
The submission referred to above was consistent with that submitted in the contentions section of the Husband’s case outline filed 10 March 2023 at [6]. However, Counsel for the Husband made a contrary submission in her oral closing.
For the Wife
The Wife made detailed submissions about the authorities concerning the treatment of the contributions made by the parties to a marriage.
Referring to Pierce & Pierce [1998] FamCA 74 (“Pierce”), it was submitted that the Court needs to assess the weight of each party’s contributions compared to the overall contributions of both parties. In this case, it was argued that there was agreement that the initial contributions were equal, and that during the relationship the Wife made a large contribution of close to $2 million from the inheritance.
Regarding the parties’ non-financial contributions, it was submitted that there is disagreement on the evidence as to which party did more around the property and around the home. Counsel for the Wife contended that the Husband’s evidence about non-financial contributions lacked credibility and that during cross-examination the Husband got caught up in semantics and did not give clear evidence about who had paid for various materials and work. This, Counsel argued, was significant and telling in respect of credit. In contrast the Wife’s evidence should be preferred because it was clear and consistent, and has also supported by objective records.
Pointing to the Husband’s evidence about his interest in animals, in effect it was submitted that the Court should be concerned about the contradiction in his claim that he did the majority of the work in relation to animals, but did not really have an interest in them.
Counsel for the Wife submitted that the Court should reject the foreshadowed contention by the Husband that the Wife had wasted money or sold items at a loss. Instead, her evidence that she had researched sale prices and looked at what the market was doing online before selling demonstrated that she had acted reasonably. It was noted that her evidence was not challenged successfully. Furthermore, the Court could take judicial notice that items of property will sell for less than they were purchased due to ageing and wear.
Addressing the anticipated submission that the Wife had over capitalised the Town E property, Counsel for the Wife submitted that this was immaterial to the assessment of contributions by the Court. However, in weighing the value of Wife’s contributions, there are two relevant considerations:
·First, the short length of the relationship;[12] and
·Second, the use to which the contributions were put.[13]
[12] Pierce at [27].
[13] Pierce at [28].
It was submitted that the Wife’s evidence was detailed in relation to the use to which the inheritance monies were put and in broad terms there was approximately $650,000 spent on the Town E property and $200,000 spent on vehicles, which was corroborated by the bank records tendered in evidence.[14]
[14] Exhibit A-4.
I enquired of Counsel for the Wife as to whether it was conceded that the Husband had made an indirect financial contribution by agreeing to restructure his finances when the Wife received the inheritance funds, so to provide a tax saving to the Wife. Counsel agreed that this was an indirect financial contribution, but said that the value of it was minimal.
Counsel then noted authorities dealing with how contributions from inheritances were dealt with in various factual scenarios and referred to the list of authorities relied upon. She submitted that they were merely indicative and that each case would turn on the facts before Family Law Act 1975 (Cth) ss 75, 75(2)(b), 75(2)(d), 75(2)(o), 79, 79(2) the Court and what findings were made about respective contributions and their weights.
In respect of the consideration set out in s 75(2) of the Act, it was submitted that there ought not be any adjustments in favour or against either party. It was submitted that:
·The parties were of similar age and states of health;
·As to their respective health issues, each party deposed to symptoms relating to their age which was not particularly challenged, but each managed these;
·The Wife continues to work by managing her hours and earns $77,000 per annum, noting that there is an error in her Financial Statement for which Counsel took responsibility;
·In contrast, work was never a priority for the Husband, as is evident from him working in a voluntary capacity for 40 years and not returning to the workforce after he gave up the business he ran for two years;
·Accordingly, it was submitted that the Wife ought not to be penalised for her attitude to work. Further, the Husband does have capacity for work, but chooses not to exercise it. This submission was said to be established by the Husband’s evidence concerning that the work he did around the Town E property and skills used in his maintenance business, including electrical ones;
·The Husband is receiving a Centrelink pension and the outcome of these proceedings will not interfere with the receipt of the pension; and
·On the facts of this case, there is no need to make orders requiring the maintenance of a pre-separation standard of living because there was clear evidence of the Husband’s ability to rehouse on the adjustment sought by the Wife. Evidence of the types of properties that could be purchased for under $300,000[15] was highlighted and the concession by the Husband that he did not require a large property or a house with four bedrooms.
[15] Exhibit A-7.
Counsel for the Wife submitted that there was no evidence adduced by the Husband about his capacity to borrow and that the Court should infer that he cannot borrow sufficiently to pay out the Wife’s interest in the Town E property. Consequently, it was submitted that the sale of the Town E property was unavoidable.
Noting concessions by the Husband in cross-examination, Counsel for the Wife contended that the evidence establishes that the Wife did not retain assets valued at $369,300 as set out in the Husband’s trial affidavit at Annexure W01. Accordingly, the composition of the non-superannuation pool was essentially agreed.
Counsel for the Wife submitted that the judgment of the Court should reflect a final adjustment of the parties’ assets on a two-pool approach where superannuation is not adjusted at all for the reasons referred to at [14] and non-superannuation assets are dealt with in a separate pool. The adjustment sought was 85/15 in favour of the Wife based on her significantly greater contributions. No explicit submission was made about a percentage adjustment that may be warranted based on considerations in s 75(2). I understood the Wife to contend that there should be no adjustment for s 75(2) considerations as this appears to be the effect of her Case Outline.[16]
[16] Filed 9 March 2023 at page 4.
A schedule was provided as an aid to the Court and was said to demonstrate the respective outcomes sought by the parties by reference to percentages and distribution of assets and liabilities. The schedule noted non-superannuation assets valued at $1,548,500 and liabilities valued at $183,000, calculating to a net non-superannuation pool of $1,365,500.
The schedule also demonstrated that the Wife sought to retain her property at Town C, a share of the proceeds of the Town E property, her Motor Vehicle 4, a trailer, Motor Vehicle 2, and also to remain responsible for the mortgage on the Town C property and her credit card. Conversely, that the Husband should receive a share of the net sale proceeds of the Town E property, Motor Vehicle 1, Motor Vehicle 3, and Farm Equipment 4. This proposal involved the Motor Vehicle 5 and Motor Vehicle 6 with accessories also being sold, and the net sale proceeds of all property sold being divided to achieve an 80/20 adjustment overall. This conveys some further adjustment potentially being conceded either for s 75(2) or the justice and equity of the case, but the submissions were not entirely clear.
I enquired whether it was relevant in any sense to the Court’s task that the evidence may demonstrate that, pre-cohabitation, the Husband had an unencumbered home in the country where he chose to live an alternate lifestyle, and if the Town E property was sold he would no longer have this.
Counsel for the Wife submitted it was irrelevant to the Court’s task. Further, Counsel for the Wife warned the Court against undertaking “social engineering”.[17] This was in the context of the suggestion that the Town E property might be capable of subdivision, such that it may allow the Husband to retain part of it. Counsel placed emphasis on the length of time that it would take for investigation and then practical completion of a subdivision even if it were approved by the relevant council, which was questionable. She submitted that making such an order would not be consistent with the objective of finality of separation of the parties’ financial interests.
[17] Sinclair [2012] FamCA 388 at [27].
For the Husband
Counsel for the Husband submitted that despite the statement in his the written case outline at [6], it was open to the Court to adopt a one-pool approach. No particular justification was given for a one-pool approach. I detected Counsel lacked enthusiasm for the submission, because on my question as to the reasons for such an approach, she simply repeated that it was open to the Court to take that approach.
No specific submissions were made in relation to what findings should be made about the composition of the pool of assets, but general reliance was placed on the written case outline filed 10 March 2023 and accordingly I will take that into account.
On behalf of the Husband, the Court was urged to find that the parties’ relationship commenced in 2013 as a marriage-like relationship. On this basis, it was submitted that the relationship was not particularly short and instead of five and a half years’ duration.
Concerning the assessment of the parties’ contributions to the acquisition, improvement and maintenance of the matrimonial assets, it was submitted that both parties brought in equal assets and subsequently conducted their relationship as a practical union whereby they contributed as they could to their mutual purposes. The Court was referred to the authorities of Hurst & Hurst [2018] FamCAFC 146 (“Hurst”) at [15] to [17] and Dickons & Dickons [2012] FamCAFC 154 (“Dickons”) at [20] to [22] in support of the approach that the Court should take. Relying on the principles noted by Counsel, it was submitted that the parties had mutually decided not to work and to live their lives on the Town E property. The Wife’s evidence of giving up employment in mid-2016 prior to receipt of the inheritance was said to be telling.
It was submitted that the evidence establishes that the Town E property was liveable and the Wife alone made decisions as to what improvements would be made on the property. In effect, those decisions led to over capitalisation of the property. It was submitted that it was of relevance for the Court to take into account that the money spent on the Town E property was because she wanted certain things done to improve the property.
Counsel submitted that the Court ought to accept that the Husband did not particularly want the expenditure on the property, animals, or animal-related equipment/infrastructure. Counsel noted that the Husband had not owned animals prior to the parties forming their relationship and no longer has animals.
Concerning the suggestion in the Wife’s evidence that the Husband failed to attend to and up-keep the produce operation, Counsel submitted that neither of the parties particularly invested their time and resources into the farm. Further, that there was no evidence that the Town E property would be more valuable if the farm was viable and productive.
In seeking to justify an outcome that would permit the Husband to retain the Town E property, Counsel submitted that:
·He had brought in the property, having paid for it in full for $265,000 prior to cohabitation;
·He had bought the property because he wanted to live in the country; and
·He had lived at the property for years.
Contrary to the suggestion that there was no merit in the argument that the Wife had taken items from the property and either kept or sold them for her own use, Counsel noted the Wife’s concessions that she did, in fact, take some items and sold others, from which the Court should infer that she retained the sale proceeds.
Counsel for the Husband submitted that the Wife was in control of what was spent on the Town E property and how, although the Husband did support the choices the Wife made. Furthermore, despite having stated that she would not live at the property she subsequently did and her financial contributions should be assessed in that light.
Turning to the considerations in s 75(2) of the Act, Counsel for the Husband submitted that an adjustment in his favour was required due to the Wife’s greater earning capacity and the fact that she was not yet of retirement age. In contrast, it was said that the Husband had chosen to volunteer, something which of the Wife was accepting of, and he was now in receipt of an age pension.
It was contended that sale of the Town E property was not the only option and that the Court ought to consider making an order which permits the Husband to explore subdivision of the Town E property as a means of retaining the home and a smaller parcel of land. Counsel requested that if the Court made an order for sale of the Town E property, it should be delayed for a period of 12 months, but subsequently sought delay for six months.
Counsel submitted that the Husband had made the majority of the non-financial contributions and had done the majority of the domestic tasks and maintenance on the Town E property. Allowing for the parties’ respective financial and non-financial contributions, Counsel submitted that on a one-pool approach there ought to be adjustment of the parties’ interests on a 60/40 basis in favour of the Wife. Further, taking into account adjustments on the evidence for s75(2) of the Act and the Husband’s greater future needs, an adjustment in favour of the Husband of five per cent should be made, leading to a final adjustment of 55/45 in favour of the Wife on a one-pool approach.
As I was troubled with the evidence given by the Husband referred to at [9(s)], I enquired whether there had been disclosure of any records such as bank statements for the Husband or from P Company around the time the parties both said an appointment took place to separate finances in July 2019.
I was told by Counsel for the Wife that she had not been able to access records from P Company confirming the $50,000 payment they were instructed be made to the Husband, because of privacy considerations. She submitted that the Court could safely infer the payment had been made because of the content of the P Company business record tendered.[18]
[18] Exhibit A-8.
Counsel for the Husband told me that she had only been retained relatively late in the proceedings and was unaware of such documents or records. As there was dispute about the payment based on the parties’ evidence, resolution of this in fact was relevant to credit and reliability of the Husband’s evidence generally. As such, I adjourned the hearing briefly for the parties to make necessary enquiries and ensure disclosure of the Husband’s bank records or communication to the husband from P Company.
On resumption of the hearing, Counsel for the Husband advised that they had been able to access the Husband’s bank account transactions and the sum of $50,000 had been received by him in July 2019, as was asserted by the Wife. I received that acknowledgement from Counsel for the Husband as indicative that the evidence previously given by the Husband that he was unaware of the payment or receipt of it, had been demonstrated to be incorrect.
For the Wife in Reply
Counsel for the Wife distinguished the authorities of Hurst and Dickons on the basis that they were much longer relationships and involved different facts, in Dickons, particularly that there was a child of the marriage. Further, she submitted that the Court should strongly disagree with the suggestion that the Husband would be homeless if the Town E property was sold. She emphasised that the only evidence before the Court indicated that there were properties the Husband could purchase from funds he received in an 80/20 adjustment of the non‑superannuation assets.
In respect of the suggestion that the Court’s order for sale of the Town E property should not take effect for a period of six months, Counsel for the Wife submitted that there was no basis for such an order and that it would not be just and equitable as the suggestion or proposal by the Husband was too little too late.
Finally, Counsel for the Wife submitted that the proposed one-pool approach on the Husband’s case had taken her by surprise, given the contents of the Husband’s case outline. Nonetheless, in all the circumstances of the case, Counsel for the Wife submitted a one-pool approach was not appropriate.
RELEVANT LEGAL PRINCIPLES
The relevant statutory provisions and legal principles which govern proceedings for property adjustment under the Act are not contentious and are well-established.
The ultimate objective and task of the Court is to make a determination if it should make orders adjusting property interests on the basis of what is just and equitable. Considerable guidance has been given by various authorities, but for present purposes it is sufficient to note the useful summary provided by Judge Reithmuller in Wagstaff and Wagstaff [2018] FCCA 927 (“Wagstaff”) from [118] to [137], referring to Stanford and Stanford [2012] HCA 52 (“Stanford”) and in Marriage of Hickey 30 Fam LR 355 (“Hickey”).
In adopting the approach referred to in Stanford, I find that the parties were in a relationship of either about three or about five years and agree that they separated in July 2019. Each party seeks orders to adjust their joint and respective interests in property and I am satisfied that it is in all the circumstances just and equitable to make orders pursuant to section 79 of the Act for the reasons expanded on below.
It is also necessary to take the well-known four step approach explained in the Marriage of Hickey and summarised in Wagstaff.
EVALUATION AND FINDINGS
Much of the Husband’s evidence about financial contributions to the property was subjective and not corroborated by independent or objective sources of evidence. In contrast, the Wife’s evidence was mostly corroborated with contemporaneous business records, which generally bore out the effect of the evidence she gave.
Consequently, where the evidence of the parties is in conflict about financial contributions, I prefer the evidence of the Wife, subject to some minor exceptions discussed below.
I also have some concern about the reliability of the Husband’s evidence because I infer that he misrepresented facts about receipt of the $50,000 post-separation.[19] I do not accept that he genuinely did not know or remember if he had received the payment as he claimed in cross‑examination. This is because he agreed that he and the Wife had both attended a meeting with the financial adviser in mid-2019 for the purpose of returning to the Wife inheritance money previously put in an investment account in his name,[20] and it was at this time that the instruction was given by the Wife. Further, it begs belief that a person would not notice a deposit of $50,000 into their bank account.
[19] At [50] of these reasons
[20] Affidavit of the Husband filed 7 March 2023 at [86].
Despite my reservations about the Husband’s evidence, it is not necessary for me to make widespread credit findings against him because the concessions made by each party in their cross-examination otherwise enables me to make findings on the basis of commonality of evidence. This is so, despite the Husband being reluctant to make concessions and clearly having a subjective perception about some issues.
THE PARTIES’ RELATIONSHIP - FINDINGS
The Husband’s evidence was that the parties commenced cohabiting around the time the Wife began agisting her animals on the Town E property in late 2013 or early 2014. The Wife disputes this and states that they commenced cohabiting in late 2015 when she then rented out her Town M property for short stay holiday accommodation.
Noting that the Wife made concessions about staying at the Town E property for up to two nights per week prior to late 2015 and her concession that she did agist animals at the Town E property from 2014, I consider it likely that the Wife’s occupation and cohabitation with the Husband gradually increased during the period in dispute. I find that the parties were probably cohabiting as married persons by mid-2014. By this time, the Wife and Husband were intermingling finances to a degree as the Wife did not pay for boarding of her animals and because of that likely spent considerable time at the property living there as a couple. In making these findings I do not ignore that the Wife had been employment at S Company,[21] but I infer from the evidence that most weekends and additional days during the week were likely to have been spent with the Husband and that they effectively were living as husband and wife by then.
[21] Affidavit of the Wife filed 24 February 2023 at [5].
There is no dispute that the parties separated in July 2019, and accordingly I find that the parties were in a marriage-like relationship initially and then married for a total period of about five years.
There are no children of the parties’ relationship.
The Husband did not work during the relationship and has not since. He now receives an Age Pension. The Wife earns $77,000 gross per annum as a health care worker.
MATRIMONIAL ASSETS, LIABILITIES AND RESOURCES - FINDINGS
The case outlines filed by the parties and evidence before the Court establish that only the Wife as a superannuation interest. I find that the interest is with Super Fund 1 and is valued at $291,484.
There is considerable agreement about most of the non-superannuation assets as they have either been the subject of single expert valuations,[22] which the parties adopt, or are otherwise agreed.
[22] Exhibit R-6 and Exhibit A-11.
The parties appear to adopt a position that there ought not to be any further division or distribution of chattels or household items. I infer this from the parties’ case outlines and because the Wife does not include any item or value for chattels and household items in Part D of her Case Outline filed 9 March 2023.
While the Husband includes values in Part D of his Case Outline filed 10 March 2023 in both “Household Contents” and “Items retained by Wife at Separation”, it is plain that the figures attributed by the Husband are purely guesses in view of his evidence referred to at [9] of these reasons. I do not accept Annexure A of his affidavit filed 7 March 2023 as being reliable, so reject the suggestion that the Wife took assets valued at $369,000 when she separated. However, based on the Wife’s evidence referred to at [6] and [7] of these reasons, I find that the value of items (excluding animals) taken are likely to be in the region of $13,095.
Proportionally and pragmatically, given the lack of direct reliable evidence, I find that what the Husband and Wife have each retained upon practical separation and now have in their possession relatively equal valued chattels. I propose to make an order that each party retain the items they each have in their possession, other than what I include in findings below.
By reference to the case outlines, the parties evidence and the approach at [71] of these reasons, I find that the value of the net non-superannuation assets is approximately $1,382,260.00 made up and owned/possessed as follows:
Asset Ownership Value 1 The Town E Property Husband $650,000.00 2 Motor Vehicle 5 Husband $9,500.00 3 Motor Vehicle 3 Husband $17,500.00 4 Motor Vehicle 4 Husband $3,000.00 5 Motor Vehicle 6 Husband $20,000.00 6 Farm Equipment 4 Husband $10,000.00 7 ANZ Bank account Husband $4,600.00 8 Animals retained by Wife at separation Wife $9,500.00 9 The Town C property Wife $775,000.00 10 Motor Vehicle 1 Wife $40,000.00 11 Animals, gear and trailer Wife $9,000.00 12 Motor Vehicle 2 Wife $6,000.00 13 Farm Equipment 1 Wife $1,000.00 14 Farm Equipment 2 Wife $1,000.00 15 Farm Equipment 3 Wife $9,000.00 16 CBA Bank Account Wife $6.00 17 T Bank Account Wife $1,378.00 Total Assets $1,566,484.00
The parties’ case outlines and respective Financial Statements identify only three liabilities. On the basis of the same, I find the liabilities of the parties to be as follows:
Liability Ownership Value 1 Mortgage on the Town C property Wife $178,082.00 2 Credit card debt Wife $5,822.00[23] 3 Credit card debt Husband $320.00[24] Total Liabilities $184,224.00 [23] Total net non-superannuation assets owned by the Wife of $851,884 less $183,904 = $667,980.
[24] Total net non-superannuation assets owned by the Husband of $714,600 less $320 = $714,280.
Contributions - Findings
Although the parties both submitted and stated in their case outlines that the parties’ initial financial contributions were equal, I am unable to accept that to be in fact the case for the following reasons.
I have found that the parties commenced cohabiting in about mid-2014. At that time the Wife’s unchallenged evidence is that she owned the Town M property subject to mortgage and other property described in her affidavit filed 24 February 2023 at [7]. The total value of her initial contributions was $110,000 in non-superannuation assets and $158,438 in superannuation.
In contrast, the Husband owned assets probably close to $300,000 in mid-2014, given the unchallenged evidence in his affidavit filed 7 March 2023 at [21] and the evidence he gave during cross-examination.
If there is to be no adjustment of the Wife’s superannuation interest for the reasons submitted by her Counsel, it is necessary to assess the initial contributions by reference to the non-superannuation assets only as it is those alone that will be subject to adjustment pursuant to s 79 of the Act.
Alternatively, if the Wife’s superannuation interest is to be taken into account for the purpose of assessing initial contributions, in my view a one-pool approach is necessary in order to afford a just and equitable outcome.
Noting the above and the findings I have made about the character, composition and value of the non-superannuation pool, I prefer a two-pool approach where the superannuation pool is not adjusted. This is as the parties had initially agreed. I consider that it is just and equitable not to adjust the superannuation pool for the reasons submitted by Counsel for the Wife. Accordingly, in assessing contributions I only assess the parties’ respective contributions to the non-superannuation pool.
In view of the parties unchallenged evidence about their initial financial contributions,[25] they were disproportionate and closer to 70/30 in favour of the Husband, in view of the findings and reasons at [75] and [76].
[25] Affidavit of the Wife filed 24 February 2023 at [7]; affidavit of the Husband filed 7 March 2023 at [10] and [21]
Subsequent to the parties’ initial contributions, I note that the uncontested evidence is that the Wife worked from commencement of cohabitation until mid-2016. During this period, the Husband did not work for an income and so likely did the vast majority of work around the property and domestically within the home. This follows because the Wife was in employment. In this period, both parties had income: the Wife from earnings and the Husband from Centrelink.
After the Wife ceased employment in mid-2016, the parties’ evidence discloses considerable dispute about what contributions each of the parties made. Based on the unchallenged evidence of the Wife and because her evidence about facts and events after mid-2016 are corroborated, I find in respect of financial contributions as follows:
(a)The Wife received a total of approximately $1,800,000 from her mother’s estate in three parts, as set out in her affidavit filed 24 February 2023 at [13];
(b)From the inheritance, the Wife made direct financial contributions of:[26]
[26] Affidavit of the Wife filed 24 February 2023 at [18].
(i)$600,000 to improvements to the Town E property;
(ii)$600,000 equity into the Town C property;
(iii)$204,000 to vehicles and equipment;
(iv)$287,000 to living expenses;
(v)$100,000 to top up her superannuation; and
(vi)the Wife solely made financial contributions whether directly from the inheritance moneys or indirectly through contributions the Husband made from the pension investment fund established from the inheritance;
(c)The Husband was in receipt of a Disability Support Pension until 2016, when it discontinued due to the establishment of a retirement fund in his name from moneys the Wife received from the inheritance; and
(d)Neither party was in paid employment between mid-2016 and separation in July 2019, meaning that their income was derived from the invested inheritance money.
Concerning non-financial contribution after mid-2016, both parties undertook physical work on the property and, noting the parties respective concessions during cross-examination, I find that:
(a)The Husband made the majority of domestic and household contributions;
(b)Both parties contributed by organising or facilitating improvements around the Town E property, but the Wife did more in this respect as she had the financial capacity to orchestrate much of the work to be done by contractors, pay for materials and equipment, and was likely more motivated given my observation of the parties;
(c)Both parties fed and groomed the animals and undertook farm-related works. However, it is impossible to make specific findings in percentage terms whether one did more or less, because both parties made concessions that the other party did some of these tasks. I do not accept the Husband’s evidence at 9(f) of these reasons as entirely reliable, but because both parties were not working in paid employment they probably discussed tasks that had to be done and came to a cooperative agreement about undertaking them;
(d)Nonetheless, it seems likely that the Wife became dissatisfied about Husband’s application to the tasks required around the property,[27] and I infer that she stepped in and did more in the latter part of the relationship; and
(e)On the basis of [83(d)], and also preferring the Wife’s evidence generally about this topic, I find that by the end of the relationship, her non-financial contributions around the property and in respect of the animals was somewhat greater.
[27] Affidavit of the Wife filed 24 February 2023 at [20] and [21]; affidavit of the Husband filed 7 March 2023 at [71] and [72].
I take into account that both parties claimed some degree of physical incapacity to undertake the work around the property and with the animals, but the general tenor of the evidence is that they both shared a mutual interest in the animals and developing the property to cater for this. Notably, medical records and hearsay evidence sought to be relied upon about their medical conditions was not in evidence. As such, consistent with their various symptoms, they likely did what they could, but retrospectively and subjectively seem to disagree about this.
Towards the end of the relationship, the Wife considered the work required of the property was too much for both parties,[28] but I am not satisfied that globally assessed the parties non‑financial contributions should be treated as particularly uneven, because of the concessions the parties made in cross-examination.
[28] Affidavit of the Wife filed 24 February 2023 at [12].
I agree that the Husband was sometimes evasive and reluctant to make concessions, but he did eventually make them in my view. Where the Wife may have made additional contributions outdoors, it seems probable the Husband made additional ones within the home.
Noting the findings at [80] and [82] above, the Husband made a larger initial financial contribution to the non-superannuation assets at the commencement of the relationship, but this was massively overtaken by the financial contributions made subsequently by the Wife from the money she received from her inheritance.
I reject the suggestion in the Husband’s case that the expenditure on the property and animals was unnecessary or was unwanted on his part. He was content for the work to be done and complicit in it being done. Had he truly opposed the works and expenditure, he could have prevented them as he solely owned the Town E property.
Assessing the early and late financial contributions discussed at [87] of these reasons is not a straightforward or mathematical exercise as without the early ones, the later ones would not have been made in the way they were, resulting in the assets disclosed at [72] of these reasons above.
I find that use of the property for the animals was a joint enterprise, but funded by the Wife.
I find that $100,000 of the Wife’s inheritance was paid into her Super Fund 1 account and that sum should not be taken into account when assessing contributions to the non-superannuation pool of assets on a two-pool approach.
As conceded by Counsel for the Wife, the organisation of the parties’ finances to accommodate the Wife’s adoption of the P Company advice, led to the Husband not having a tax-free income[29] and reducing tax liability for the Wife. I find this constituted a minimal indirect financial contribution.
[29] Ie the Disability Support Pension.
Although not the subject of cross-examination at the hearing, the Wife conceded that the fees received from her Town M property after she moved in with the Husband, were applied to reduction of her mortgage.[30] She also stated that the proceeds of sale of that property when sold were applied to her investment through P Company and then applied to improvements on the Town E property.[31] Accordingly, the Husband made a small unquantifiable indirect financial contribution, as it was the Wife’s occupation of the Town E property that enabled the Town M property to be rented, permitting some additional equity in the Town M property owned by the Wife.
[30] Affidavit of the Wife filed 24 February 2023 at [6].
[31] Affidavit of the Wife filed 24 February 2023 at [24].
In view of the findings and reasons above, I assess the respective overall direct and indirect financial contributions and non-financial contributions of the parties at 79/21 in favour of the Wife.
Section 75(2) considerations
The parties are of similar age and health and there is no basis for adjustment pursuant to s 75(2)(a) of the Act.
The Wife has a superior earning capacity, greater net property and resources in her name as is obvious from the findings at [72] of these reasons. While I accept that the Husband theoretically has some capacity to earn income, I infer that in real terms he has a distinct disadvantage in earning capacity as compared to the Wife, due to lengthy absence from the workforce and lack of formal qualifications or recent work experience.
I accept that he may earn modest sums to “top up” his aged pension, but this will still leave him in an inferior position to the Wife. The Husband was not realistically exercising earning capacity and had not done so for years, something which both parties condoned upon cohabitation and then marriage.
Recognising the inferior earning capacity, property and resources of the Husband, I allow for it pursuant to s 75(2)(b) of the Act as required by statute. It is not to the point to say that making some allowance would be to punish the Wife, as submitted by Counsel for the Wife in the circumstances of this case.
I accept the submissions made for the Husband that there should be a five per cent allowance in favour of the Husband for s 75(2)(b) of the Act. In my view an adequate but also cautious allowance of this size is warranted because of the relatively short duration of the relationship despite the disproportionate future resources of the parties and obvious disparity in their income, property and real earning capacity.
I do not make any findings or allowance pursuant to ss 75(2)(c), (d) or (e) of the Act, nor were they submitted to be relevant to the circumstances of this case.
The Husband is eligible for and receives a Centrelink pension. That was effectively his position before cohabitation. In the future, the Wife will become eligible for an aged pension. On retirement, the Wife will have superannuation funds. Relatively, therefore, the parties’ positions in the future will be as they would have been regardless of their cohabitation and marriage. In my view, there is no justification for an adjustment pursuant to s 75(2)(f) of the Act in these circumstances.
The contentions on the part of the Husband described at [38] to [43] sufficiently raise for consideration whether there should be some allowance pursuant to s 75(2)(g) of the Act. The submissions did not explicitly refer to s 75(2)(g), but still need to be addressed.
The principles and authorities relating to s 75(2)(g) of the Act focus on what weight should be given to the pre-separation standard of living when the Court considers s 75(2)(g) of the Act. Some of the principles which can be distilled from the authorities are summarised as follows:
(a)The consideration relates to more than just the bare necessities and the pre-separation lifestyle must be considered; Evans & Evans (1978) FLC ¶90-435;
(b)The Court is not required to make orders that necessarily maintain pre-separation standard of living; Wilson & Wilson [1989] FamCA 34, (1989) FLC 92-033, 13 Fam LR 205 (“Wilson”);
(c)In the context of spouse maintenance, but in my view also relevant to property adjustment, “reasonableness in the circumstances” denotes a guiding principle and is not a “fettering principle that pre-separation standard of living must automatically be awarded where the respondent’s means permit”; Bevan & Bevan [1993] FamCA 95, (1995) FLC 92-600, 19 Fam LR 35;
(d)Seemingly in contradiction to Wilson, parties are entitled to expect a similar standard of living after a long marriage; Dickson & Dickson [1999] FamCA 278, (1999) FLC 92-843, 24 Fam LR 460 (“Dickson”);
(e)What is the appropriate standard of living varies between families; Mitchell & Mitchell (1995) FLC ¶92-601;
(f)In Mitchell & Mitchell (1995) FLC ¶92-601, per Nygh J:[32]
“Adequately” is a relative concept which must be determined having regard to “a standard of living that is in all the circumstances reasonable (see sec. 75(2)(g) and Ferguson and Ferguson (1978) FLC 90-500”;
(g)As to the meaning of “adequate” in the context of standard of living referred to in s 75(2)(g) of the Act, the meaning in the shorter Oxford dictionary applied, being “commensurate in fitness”, “sufficient”, “suitable”;[33]
(h)No particular consideration in s 75(2) of the Act has greater import than any other. Thus, s 75(2)(g) is not “a guiding principle” for any assessment of the relevant s 75(2) factors; it is just one of the factors to be considered in the holistic assessment, albeit, it is open to a court to attribute appropriate weight to any of the factors taken into account. Certainly, and in this case, a standard of living that in all the circumstances is reasonable was an important factor favouring the husband, given his accommodation and living arrangements, and his Honour referred to that issue and took it into account; Bridges & Bridges [2020] FamCAFC 77 at [66] (“Bridges”);
[32] At 75,528.
[33] Ferguson and Ferguson (1978) FLC 90-500 at 77,613.
The terms of s 75(2)(g) of the Act refer to a standard of living that is in all the circumstances reasonable, and the inclusion of “all” means that the consideration of the standard of living of a party or the parties is not confined to the circumstances either during the cohabitation/marriage or after separation or divorce in my view. As such, the standard of living, including the type of property and home the Husband lived in and owned before the parties’ cohabitation, is a relevant factor. There is no doubt the standard of home both parties lived in during the relationship is relevant also.
The approach and construction discussed at [104] is consistent with the Court’s reasons in Kutcher & Kutcher (1978) FLC ¶90-453, where at 77,311 it is stated that:
On the evidence presented to me by two Land Agents, I am not satisfied that half the net proceeds would enable the wife to provide herself with accommodation which equates with the quality of the accommodation of Dashwood Road property and its surroundings. I am conscious that sec. 75(2)(g) does relate only to “a standard of living that in all the circumstances is reasonable”, but having regard to the past circumstances of the parties, and their present financial circumstances, I am of the view that the wife is entitled to live in comfort in an area reasonably close to where she has established herself during the last 10 or more years of her life…
[emphasis added]
Had the reference to “all the circumstances reasonable” been intended to refer only to the parties’ circumstances during and post separation, I consider that the word “all” would not have been included in the statutory provision. As it was included, it ought to be given its natural meaning such that all circumstances the Court considers relevant in assessing what is a reasonable standard of living should be taken into account.
Despite my reasoning at [106], although there is authority supportive of the principle that in a long marriage the parties are entitled to expect a similar standard of living to that which they had during the relationship,[34] the facts of this case are very different to those in Dickson and ultimately I must exercise the Court’s discretion, taking all relevant factors in s 75(2) of the Act into account in the holistic way as explained in Bridges. I find that there should be a two per cent adjustment in favour of the Husband pursuant to s 75(2)(g) of the Act.
[34] Eg Dickson.
Neither party submitted that any of the other considerations in subsection 75(2) of the Act were relevant, but as I propose to make orders pursuant to s 79 of the Act, I must address s 75(2) (n) of the Act,[35] which is part of the Court’s task in attending to step four referred to in the authorities discussed above.
[35] See [112] of these reasons and following.
DETERMINATION
I have found that both parties brought in property at the commencement of their relationship, but the property pool was materially altered and significantly increased during the relationship largely because of the Wife’s inheritance and how it was applied. This warrants orders being made in respect of the non-superannuation net asset pool, in order to achieve a just and equitable finalisation and separation of the parties’ financial relations.
I have determined that a two-pool approach should apply and there will be an order that the Wife exclusively retain her interest in the Super Fund 1 account, without any order being made pursuant to Part VIIIB of the Act in respect of it.
Turning to the net non-superannuation assets, addressing the required considerations in s 79(4) of the Act, I conclude that, on the basis of contributions alone and based on the findings and reasoning above,[36] the adjustment warranted is one which achieves a distribution of the net non-superannuation assets on a 79/21 basis in favour of the Wife.
[36] At [94] of these reasons.
A 79/21 adjustment based on contributions alone would mean the Husband received $290,275, compared to the Wife receiving $1,091,985, which does not equate to a just and equitable outcome and further adjustment based on s 75(2) considerations is required.
There will be total adjustment of seven per cent in favour of the Husband for s 75(2) factors based on my findings and reasons at [95] to [108], meaning that the net non-superannuation pool is to be divided to achieve a 72/28 division of the net non-superannuation pool. This results in a distribution of $387,032.80 to the Husband and $995,270.20 to the Wife on the basis of the values at [72] and [73].
The Town E property must be sold to achieve this outcome. The Husband did not assert that he had the means to pay out the Wife’s interest in the Town E property and, in any event, there is no evidence adduced by him of his capacity to do so.[37]
[37] Phillips & Phillips [2002] FamCA 350; Melvin & Melvin [2018] FCCA 1847 at [123] to [126].
As it appears to be agreed that the Motor Vehicle 5 and Motor Vehicle 6 with associated components should be sold and in any event as they will not be required for the Town E property, they are to be sold. As there will be expenses or fees incurred to achieve the sale, these should be equally shared.
The 72/28 division of the net non-superannuation assets will be achieved by each party retaining following assets and liabilities and a cash amount being paid to each party to achieve the final percentage adjustment referred to at [113]:
Table A – Husband Motor Vehicle 3 $17,500.00 Motor Vehicle 4 $3,000.00 Farm Equipment 4 $10,000.00 ANZ Bank account $4,600.00 Total $35,100.00
Less $320[38]
= $34,780[38] Husband’s credit card.
Table B – Wife Motor Vehicle 5 $9,500.00 Town C property $775,000.00 Motor Vehicle 1 $40,000.00 Animals, gear and trailer $9,000.00 Motor Vehicle 2 $6,000.00 Farm Equipment 1 $1,000.00 Farm Equipment 2 $1,000.00 Farm Equipment 3 $9,000.00 CBA Bank Account $6.00 T Bank Account $1,378.00 Total $851,884.00 Less $183,904[39] =$667,980 [39] Wife’s mortgage and credit card.
The final effect of the Court’s determinations being that the Husband will receive assets net of his credit card liability of $34,780 plus a cash payment from the net proceeds of the assets to be sold. In turn, the Wife will receive assets net of her liabilities of $667,980 plus a cash payment from the net proceeds of the assets to be sold.
The value of the net sale proceeds of the Town E property, Motor Vehicle 5 and Motor Vehicle 6 are unknown but allowing up to $20,000 for expenses, there is likely to be about $660,000 for distribution instead of the value of the items 1, 2 and 5 of the schedule at [72] of these reasons.
For illustrative purposes only, if the assumed net sale proceeds of the items at [118] of these reasons is $660,000, the cash payments to be made pursuant to the Court orders is calculated by substituting it for the values for the items to be sold to calculate the revised value of net non-superannuation assets. This produces a revised assumed net value of the non‑superannuation assets of $1,362,760. The Husband being entitled to 28 per cent of the net non-superannuation assets would receive the assets and liabilities in Table A of [116] of these reasons and a cash payment of around $346,792 rounding down. While the Wife being entitled to 72 per cent will receive the assets and liabilities in Table B of [116] of these reasons and a cash payment of about $313,208 from the sale of assets.
The assessment of what percentage adjustment should be made for the various considerations pursuant to ss 79 and 75(2) of the Act is necessarily a discretionary exercise guided by the relevant principles and authorities referred to in these reasons. I consider the allowances I have made are within the acceptable range and necessary to achieve a just and equitable outcome.
I appreciate that the parties may have submitted that five per cent adjustment in favour of the Husband should be made for s 75(2) factors, but in my view that does not adequately take into account s 75(2)(g) in the circumstances of this case.
In a long marriage, the degree of the allowances in favour of the Husband for relevant s 75(2) considerations would necessarily be greater. This is relatively short marriage where the Husband pre-cohabitation did not enjoy the “largess” created by the Wife’s inheritance, but did have a property and home in a country setting which he specifically chose for its quality and standard of living. The further two per cent allowance pursuant to s 75(2)(g) of the Act is warranted.
I specifically reject the submissions made on behalf of the Husband that on a contributions basis the parties’ interest should be adjusted 60 per cent in favour of the Wife and 40 per cent in favour of the Husband. Such approach is simply not warranted based on my findings about the parties’ respective contributions.
The submissions advanced for such an assessment as set out in the Husband’s case outline at [2] to [10] on page 7 are not compelling and in part conflate issues of contribution with those to be considered under s 75(2) of the Act. Further, it is premised on the basis that the Wife removed and has had the benefit of about $369,000 worth of chattels alone as identified in Annexure W 01 to the Husband’s affidavit. This factual premise has been rejected for the reasons given at [28] and [70] of these reasons.
I also reject the submissions on behalf of the Wife that, on a contributions basis, the adjustment ought to be 85 per cent in favour of the Wife and 15 per cent in favour of the Husband. In my view, the submissions fail to recognise that:
(a)I have found that the relationship was for longer than the Wife asserts;
(b)They do not account for the indirect financial contributions which I have found were made by the Husband;[40]
(c)They understate the value of the Husband’s initial financial contributions;
(d)They do not allow for the fact that of the inheritance $100,000 was paid to the Wife’s superannuation which is being dealt with in a separate pool; and
(e)They understate the Husband’s non-financial contributions to a small but imprecise degree.
[40] At [93] of these reasons.
During closing submissions, I invited submissions from Counsel about the parties’ respective asset positions, personality and connected lifestyle before commencement of their relationship and whether this was a matter the Court should take into account either pursuant to s 75(2) of the Act or in step four of the courts determination.
In response, Counsel for the Wife submitted that it was irrelevant and not a matter which the Court should make any adjustment in favour of the Husband.[41]
[41] See [33] of these reasons.
Counsel for the Husband contended it was relevant and sought to impress the unfairness of the Husband being forced to sell the Town E property because of the improvements and over capitalisation of the property, which was controlled by the Wife. Put in this way, the submission does not have merit because I have found the works and improvements were a joint enterprise.
However, as I have highlighted in the reasons above, the standard of living which is reasonable for both parties in all the circumstances, including that which the Husband before cohabitation and then since is a factor I should properly take into account. The two per cent which I have allowed may not enable the Husband to rehouse in an un-encumbered property in the country setting similar to that which he had pre-cohabitation, but it will in my view reflect a just and equitable outcome by making some allowance pursuant to s 75(2)(g) or alternatively (o) for the reasons I have given.
The Court’s determination will still ensure that the Wife’s clearly very large financial contribution to the net non-superannuation pool is recognised together with other contributions she has made in the relatively short marriage.
Furthermore, standing back and assessing the outcome, it ensures the Wife has the vast majority of the net non-superannuation assets and all her superannuation for her future, while the Husband has some small chance of acquiring a suitable home similar to that which he enjoyed pre-cohabitation. In effect, he should be left in a position not dissimilar to that which he previously has historically enjoyed and sought out.
I expressly reject the submission that the final adjustment should be 80/20 in favour of the Wife. If the Court were to reach that conclusion, it would mean the Husband would receive in dollar terms $276,452 which is not just and equitable for all the reasons given above.
I also reject the submission that the court should make orders for a delayed sale of the Town E Property as it seems highly unlikely that the delayed sale order would be for any effective or useful purpose and unduly prejudices the Wife for the following reasons:
(a)The parties separated in July 2019 and almost four years have already elapsed, yet their financial connections remain and this is undesirable and contrary to the object of the Act;
(b)The Husband has elected not to engage a lawyer until very late in the piece and failed to explore all possibilities of negotiated consent orders at an earlier time;
(c)An order for delayed sale would in my view only be just and equitable if the Husband had adduced evidence establishing that:
(i)he is likely to be able to afford the costs of effecting a subdivision of the Town E Property; and
(ii)subdivision would likely be approved and generate sufficient funds to achieve an adjustment of the parties interests that is otherwise just an equitable;
(d)The evidence adduced by the Wife is that subdivision is discretionary only. I infer from this evidence that there is a mere theoretical possibility of subdivision.
The court’s will make orders (in summary):
(a)For the parties to each retain chattels and household items and miscellaneous property they have had in their possession post-separation;
(b)For the sale of the Town E property;
(c)For sale of the Motor Vehicle 5, Motor Vehicle 6 and associated equipment;
(d)For each party to be liable for debts and credit card liabilities in their name; and
(e)For payment of the funds from the sale proceeds of b and c above to achieve an overall 72%/28% adjustment of the net non-superannuation pool in favour of the Wife; and
(f)For no superannuation split.
Before formally publishing the final orders, I will invite the parties to consider a draft of the final orders.
I certify that the preceding one hundred and thirty-five (135) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Taglieri. Associate:
Dated: 6 April 2023
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