C and C
[2002] FMCAfam 48
•1 March 2002
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| C & C | [2002] FMCAfam 48 |
| FAMILY LAW – Property. |
| Applicant: | D E C |
| Respondent: | W G C |
| File No: | ZC 2031 of 2001 |
| Delivered on: | 1 March 2002 |
| Delivered at: | Canberra |
| Hearing Dates: | 6 & 7 December 2001 |
| Judgment of: | Brewster FM |
REPRESENTATION
| Counsel for the Applicant: | Ms Tonkin |
| Solicitors for the Applicant: | John Nicholl & Co, 7th Floor, 17–21 University Avenue, CANBERRA CITY ACT 2601 |
| Counsel for the Respondent: | Mr Brzostowski |
| Solicitors for the Respondent: | Smyth Burnett Bowden, 7–11 Botany Street, PHILLIP ACT 2606 |
FEDERAL MAGISTRATES |
ZC 2031 of 2001
| D E C |
Applicant
And
| W G C |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter concerns competing property applications by the parties. It is not necessary to set out the precise terms of each parties’application.
Background
The husband is 48 years of age and the wife 45 years of age. They commenced to live together in January 1981 and were married on
3 April 1982. There are five children of the marriage, M who was born on 26 July 1983 and is therefore 18; V who was born on 14 February 1985 and has therefore just turned 17; R born 30 June 1886 and aged 15; D born 12 October 1989 and aged 12; and D born 18 December 1991 aged 10.
The parties separated on 4 March 1996. The children remained living with the wife.
The parties’ employment
At the date the parties began to live together the husband was a member of the Royal Australian Navy. He had been a member of the Navy at that stage for 10 years. He continued in the Navy until August 2000 when he retired and commenced a permanent position in the Australian Customs Service where he continues to be employed.
At the time the parties commenced to live together the wife was a medical receptionist and a nurse aide. She was working in a radiological practice and had then been in the workforce for approximately 10 years. Because of the husband’s frequent postings she remained in paid employment for only a comparatively short time after the parties began to live together. She says, and I accept her evidence in this respect, that by the date of separation she had no employment skills as her experience in nursing was outdated. After separation she enrolled at the Metropolitan Business College for the purpose of gaining qualifications which would enable her to work as a Secretary/Personal Assistant/Executive Assistant. She did not finish this course but was fortunate enough to be offered a temporary placement with the Department of Defence which later became a permanent position. She continues to work at the Department of Defence.
Financial history of the relationship
At the date the parties commenced to live together the husband owned a unit in H and had a half-share in a unit in M. Both these properties were acquired in 1979. The H property cost $53,750 and between $10,000 to $15,000 was borrowed to acquire this property. His share of the M property cost $22,000 and was funded from savings.
The husband also had savings in the order of $8,000. Both parties had furniture and effects which cannot be valued and are of no consequence in this case.
The H and M properties were sold in 1985 and from the sale the husband received a sum of $105,000. In the same year the parties purchased a block of land on M Island in Queensland for $16,950. This was sold in June 1998 for $8,500 and so was not a successful investment.
In January 1991 the parties purchased a property in H for about $180,000.
In July 1993 the parties purchased 1,600 Woolworth’s shares. Eight hundred of these were placed in the name of the husband and eight hundred in the name of the wife. The wife sold her shares in October 2001 for $12,915. The husband has retained his shares.
In February 1994 the parties purchased a property in C for $137,000. Money was borrowed for this purpose although the evidence does not indicate how much. Nothing hangs on this in any event. This property was purchased in the husband’s name alone, doubtless to take advantage of negative gearing.
A few weeks after the parties separated, they sold the H property and distributed the proceeds between them. The wife received $150,000 and the husband $26,696.
In November 1996 the husband’s parents gave him $10,000.
In October 1998 the husband purchased 1000 Telstra shares.
In August 1999 the husband purchased 500 Coles Myer shares.
As previously mentioned in August 2000 the husband retired from the Navy. He received a total of $246,620 from superannuation and long service leave.
In April 2001 the husband purchased a unit at 8/14 M Place, N for $145,000. $70,000 of this came from his superannuation payout and $35,000 from other savings.
At a date which is not in evidence, the wife purchased a property at
11 G Street, D. This was purchased from the money she received from the sale of the H property. Additional monies were spent on the property after its acquisition and in consequence the property has a mortgage of $38,000.
Each party became entitled to NRMA shares. The wife has sold hers for $2,146. The husband retains his.
Since the parties separated the husband has paid child support. Initially this was at a rate of $356 per week. It was apparently at a lower figure than was appropriate because of negative gearing and other factors. In July 2001, as a result of an application by the wife to the Child Support Agency, the amount payable increased to $600 per week.
The husband also paid other expenses for the children’s or the wife’s benefit. The precise amount is in dispute. The husband claims it amounted to $22,377. The wife says it is about $1,000 less than this. I prefer the evidence of the husband in this respect. The husband claims that there was an agreement that these monies were advanced by way of loans to be repaid when property matters were resolved. The wife does not specifically deny this. It would be possible to approach the matter on this basis and to order the wife to repay this amount out of the monies she is to receive as a result of this case. However I prefer to approach it on the basis that the monies paid will be regarded as a contribution made to the welfare of the family by the husband post-separation. The end result will not be different no matter what approach is taken.
The approach under section 79
I propose to approach this matter on the usual three-stage basis. The first stage is to make findings as to the parties’ property and financial resources. The second stage involves a consideration of the factors as set out in section 79(4)(a) to (d) and (f) and (g). Whilst these matters go beyond issues of contribution, for convenience I will call them the contribution factors. The third stage involves considering those matters under section 75(2) which are relevant to this case. I will call these the section 75(2) factors.
The property pool
The parties have agreed that the property is as follows:
$ $
The C property: Gross value 128,000 Less mortgage 97,347 Equity
30,653
The husband’s N property
150,000
The wife’s D property: Gross value 190,000 Less mortgage 39,500 Equity
150,500
The husband’s savings
174,600
The husband’s Woolworths shares
13,017
The husband’s NRMA shares
1,641
The husband’s Telstra shares
5,750
The husband’s Coles Myer shares
4,308
TOTAL: $530,467
As indicated previously the wife has sold her Woolworths and NRMA shares for $15,060. I propose to include this amount in the pool as notional property. This increases the pool to $545,527.
The parties have motor vehicles and other chattels which have not been valued. I do not include these in the pool.
The wife has a debt of $9,515 incurred post-separation in respect of monies lent to her by the parties’ son, M. As I understand the way her case was put, this is not to be included when quantifying the pool but to be taken it into account when I deal with the Section 75(2) matters.
The pool therefore totals $545,527.
Contribution factors
As previously indicated when the parties commenced to live together the husband was the owner of a property at H and a half-owner of a property at M. The values of these properties at the date the parties began to live together is not in evidence but, as previously indicated, they realised $105,000 when sold some four years later. As previously mentioned he also had some $8,000 in savings.
The passage of time and the ongoing contributions that the wife has made since cohabitation, both during and after the parties lived together, has significantly eroded the significance of this initial contribution. Nevertheless I do not propose to ignore it or to give it only minimal weight. The $8,000 in savings by itself would not now be significant but when coupled with the injection into the parties’ finances of $105,000 in 1985, which was a very significant sum at that time, is a factor to which I have regard. It justifies a significant adjustment in favour of the husband.
There is nothing in the evidence that would indicate that the parties’ contributions during the period they lived together should be regarded as other than equal. The husband was away for significant periods for work purposes and this would have meant that the wife’s responsibilities in caring for the children would have been more onerous than would be the case in most marriages where there is a family of this size. However it could be assumed that extra income in the form of allowances would have been earned by the husband when he was away from home which would be reflected in either the property now available for distribution or the standard of living enjoyed by the parties.
After the parties separated the wife continued to contribute as a parent. The extent of her contribution goes beyond providing financially for the children. The husband has exercised contact with those children after separation. Until 1997 this was irregular. From 1997 to 1999 it was basically each alternate weekend. From 1999 contact has been infrequent. The responsibility of caring for the children has been borne overwhelmingly by the wife.
In circumstances where one party is responsible for the physical care of the children and the other party pays child support such as to wholly or substantially cover the cost of maintaining the children, it may be appropriate to treat the parties’ contributions as equal or to treat the payer parent contributions to the welfare of the family as greater than those of the “residence parent”. This is not the case here. From the date the parties separated until M turned 18 on 26 July 2001 the child support of $356 per week had to cover five children. This equates to just over $71 per child per week. If the other payments made by the husband are averaged over this five-year period it adds about $86 per week or about $17 per child. If I had regard to the “Lee” statistical data on the costs of maintaining children this would equate to less that half of the cost of maintaining each child.
I appreciate that extrapolating the statistical cost of maintaining one child to cover a family of five children is not entirely appropriate and that there are, in effect, “economies of scale” in a large family. However the Lee figures are a useful guide nevertheless. I appreciate also that the whole of the difference between these amounts paid and the theoretical statistical cost of maintaining each child, whatever that is, would not have been met by the wife. This would have involved expenditure far above the money she had available to maintain the children. The conclusion I come to however is that the mother’s contributions as a parent post-separation were made under circumstances of some difficulty in that she had to provide for these children and care for them in circumstances where she would have had to have been extremely careful with her budgeting and would have undoubtedly suffered a degree of hardship herself in order to provide for the children.
In all the circumstances I assess the wife’s post-separation contributions to the welfare of the family as significantly greater than those of the husband. It is now almost six years since the parties separated. This is a factor requiring a significant adjustment in favour of the wife.
The husband’s payout on retiring from the Navy was accumulated over 29 years. The parties lived together for 15 years. The amount involved is substantial. While the exact value of the parties’ other property at the date the husband received his payout is not known, it is likely that the payout increased the parties’ property by perhaps 70 per cent.
I take account of the fact that about half of the husband’s entitlements built up during his time with the Navy were accumulated during periods when the parties did not live together.
I take into account that $10,000 of the husband’s savings can be attributed to the money given to him by his parents. I further take into account the fact that the husband’s Telstra and Coles Myer shares were acquired post-separation.
It hardly needs to be stated that the exercise of assessing a contribution-based entitlement is not, and in a case such as the present cannot be, a mathematical or accounting exercise.
I make a 5 per cent adjustment in favour of the husband by reason of his initial contribution. I make a further 10 per cent adjustment to reflect the matter referred to in paragraphs 36 and 37. I make a 7 per cent adjustment in favour of the wife to reflect the difference in the parties’ post-separation contributions to the welfare of the children.
The overall result is a contribution-based entitlement of 58 per cent to the husband and 42 per cent to the wife.
Section 75(2) factors
The wife continues to be responsible for the four children under the age of 18 years. It will be almost eight years until the youngest of these, D, turns 18. A significant allowance must be made in her favour with respect to these matters and again I reiterate that both the financial and non-financial responsibilities that go with being a resident parent are relevant in this respect. The extent of the adjustment will however reflect the fact that the husband is now paying a substantial amount of child support.
There is a marked disparity in the parties’ incomes. The husband’s gross salary in his Public Service position is $1,237 per week. In addition he receives an indexed pension from his Navy service of $616 per week before tax. This pension is indexed for inflation and is payable for life. This is a very valuable resource.
The wife’s gross income from her Public Service position is $730 per week. The evidence does not establish that the length of the marriage has impacted on her earning capacity so it is unnecessary to consider section 75(2)(k). However the disparity between the parties’ respective incomes is a very significant matter under section 75(2)(b).
The wife contributes to a superannuation scheme and has accrued benefits of just under $21,000. On her retirement she could convert the lump sum then accrued to a pension but this would not be comparable to the pension payable to the husband.
The husband has accrued superannuation of $32,273. He is contributing to the Commonwealth superannuation scheme and, as can the wife, convert the lump sum payable to him on retirement to a pension.
The husband is in good health. The wife suffers from a number of physical conditions which she outlined in paragraph 34 of her affidavit. In addition, her general practitioner filed an affidavit with an annexed report which reads as follows:
“Mrs C has found the jobs of bringing up five children alone as well as working full time to be very stressful. She has been seen on a number of occasions at this practice with emotional and psychological difficulties and continues to work hard at that aspect of her life.”
I accept that bringing up five children and holding down a full-time job with no assistance from the husband of any significance would be very stressful. I imagine that this litigation has brought its own stresses and that there will be some improvement when it is concluded. On the state of the evidence I am not prepared to accept that her continued employment is at significant risk because of her health.
As previously indicated I have regard, in the wife’s favour, to the debt she has to M. I also have regard to the difference in the parties’ capital position as a result of the contribution-based division.
The matters to which I have referred, especially those in paragraphs 41 to 43, require a substantial adjustment in favour of the wife. In my opinion an adjustment of 35 per cent is appropriate.
Conclusion
This results in an overall division of 77 per cent to the wife and 23 per cent to the husband. This means the wife is to receive $420,056.
The wife has her D property with an equity of $150,500 and the shares that she sold are included in her side of the ledger. This totals $165,560. The amount remaining to be paid to her is $254,496 which I round off to $254,500.
Neither party handed up Minutes of Orders Sought and I do not know how the husband would propose to satisfy my order. I will invite the parties to submit a Minute in this respect. If they are unable to agree, I will hear submissions and will give either party the right to have the matter relisted either for this purpose or for the purpose of dealing with any other matters that may require attention.
I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of Brewster FM
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