C and C

[2009] FCWA 29

[2009] FCWA 29

JURISDICTION	:	FAMILY COURT OF WESTERN AUSTRALIA
ACT	:	FAMILY LAW ACT 1975
LOCATION	:	PERTH
CITATION	:	C and C [2009] FCWA 29
CORAM	:	THACKRAY CJ
HEARD	:	18 DECEMBER 2008
DELIVERED	:	27 MARCH 2009
FILE NO/S	:	PTW 6830 of 2005

BETWEEN : C

Applicant/Husband

AND

C

Respondent/Wife

Catchwords:

FAMILY LAW - PROPERTY - Contributions - Wife made greater initial contribution - Contributions during the marriage were equal - Future needs - Husband has a greater earning capacity than the wife - Wife has responsibility for the care and accommodation of the two children of the marriage - Superannuation - Husband did not apply for a superannuation splitting order - The fact the majority of the husband's settlement would be in the form of superannuation was taken into account as a relevant consideration

Legislation:

Family Law Act 1975 (Cth)

Category: Not Reportable

Representation:

Counsel:

Applicant : Self Represented Litigant

[2009] FCWA 29

Respondent : Mr Childs

Solicitors:

Applicant	:
Respondent	:  Joyce Teh & Associates

Case(s) referred to in judgment(s):

Phipson & Phipson [2009] FamCAFC 28
Woollams and Woollams (2004) FLC 93-195

[2009] FCWA 29

1 [Mr C] (“the husband”) and [Mrs C] (“the wife”) separated over nine years ago

but have been unable to reach agreement in relation to the distribution of their
property.

Brief background

2 The husband is aged 44 years and is employed as a [service operator]. The wife is aged 46 years and is employed as a receptionist.

3 The parties commenced cohabitation in October 1989 and were married in

December 1994. They separated in January 2000, when the husband left the former matrimonial home.

4 There are two children of the marriage; [A] who was born in January 1993 and

[S] who was born in July 1996. The children have lived with the wife since the separation. The husband has not seen the children for more than a year, and before then his contact with them was very sporadic.

Orders sought

5 The orders sought by the husband were contained in his Form 1B filed in

May 2006 in which he proposed that the wife pay him such amount “as equates to a 50/50 overall division of the parties assets”.

6 The orders sought by the wife were contained in a Minute of Orders handed up

at the hearing. The wife proposed that she retain the former matrimonial home and pay the husband $41,642 (which she calculated would bring about a 75:25 division in her favour - including superannuation assets).

Credibility

7 The proceedings were commenced in December 2005, but the matter did not

come on for trial finally until December 2008. Along the way, the husband became
dissatisfied with his lawyer and was self represented at the trial.

8 Regrettably, due to a variety of factors including his lack of legal training, the

husband’s case was presented in an unsatisfactory fashion. In particular, he had prepared no cross-examination and asked only a handful of ineffectual questions of the wife. I warned him that failure to cross examine on material matters of fact would be likely to result in a finding that the wife’s evidence would be accepted. In the absence of such cross-examination I have no basis on which to conclude other than that the wife gave an accurate account of the relevant factual background. In any event, a great deal of her evidence was corroborated by documentary material.

9 The husband was not strongly challenged in relation to much of the material

contained in the two affidavits upon which he relied. The main thrust of the cross-examination by counsel for the wife (apart from suggesting a lack of disclosure) was to attempt to demonstrate that the husband was residing in a de facto marriage relationship.

[2009] FCWA 29

10 The husband was not an impressive witness. He is clearly disillusioned with the

legal process and was exceedingly antagonistic towards the wife and her legal advisers, although he conducted himself appropriately enough during the course of the trial.

11 Ultimately, the only issue on which credibility appeared to be of significance

concerned the husband’s denial of the assertion that he was living in a de facto marriage relationship with a [Ms M]. The husband conceded he had once been in a relationship with [Ms M], but claimed he was no longer living with her. He said he had been living for some months with a friend in [the suburbs]. He did acknowledge that he continues to see [Ms M] on occasions, but claims this was only because they have mutual friends.

12 The husband was aware that the existence of his relationship with [Ms M] was

an issue in the proceedings. Once the husband had acknowledged that he was previously in a relationship with [Ms M], in my view the forensic onus moved to him to establish that the relationship had come to an end. He did not call [Ms M] to give evidence to corroborate his evidence. He gave no explanation of the circumstances in which their relationship allegedly ended. He gave no adequate explanation why his income still continues to be paid into an account in [Ms M]’s name. Furthermore, the manner in which the husband gave his evidence did little to persuade me that I should believe him on this issue.

13 In these circumstances, whilst I cannot be certain, I am satisfied on the balance

of probabilities that the husband is now or will in the future be living with [Ms M]. That finding, of itself, does not advance matters greatly as the only evidence I have concerning [Ms M] is that she is working (albeit the husband claims he does not know where she works) and owns a property in [the suburbs], which cost $255,000 when acquired in January 2005 and which is encumbered by a mortgage to the ANZ Bank.

Property settlement approach

14 I am required to follow a four-step process in dealing with applications for property settlement pursuant to the Family Law Act 1975. These are:

• identify and value the assets and liabilities of the parties;

• assess each parties’ contributions to the assets;

• assess a range of factors set out in s 79(4)(d) - (g) of the Act; and

• consider whether the proposed orders are just and equitable.

The asset pool

15 Although the husband was not convinced of the value of the wife’s chattels, there was no real dispute in relation to the value of the assets to be divided.

[2009] FCWA 29

16 At the time of trial I was not provided with current information concerning the

husband’s superannuation entitlements. Both parties were given leave to provide updating information concerning the value of the superannuation after the trial concluded. I warned the husband that if he did not provide an updated statement of his entitlements, I would proceed on the basis of the information available to me at the time of trial. No further information has been provided by either party.

17 I find the value of the parties’ assets (including superannuation assets) to be as

follows:

Assets	Husband	Wife
Former matrimonial home	$237,500	$237,500

[Her motor vehicle]	1,600
[His motor vehicle]	1,000

Furniture 300 1,600

Superannuation – Qantas	46,263
Superannuation – AMP	64,144
Superannuation – IMG	3,649
Superannuation – Westpac	25,649

Total	$349,207	$269,998
Liabilities
Commonwealth Bank	2,903	2,903

18 The pool available for division is therefore worth $613,399.

Contributions

19 The husband submitted that the parties’ contributions should be assessed as having been made equally.

20 Counsel for the wife submitted that contributions should be assessed 60:40 in

favour of the wife. In summary, it was asserted that the wife had made greater
contributions than the husband as the result of the wife:

[2009] FCWA 29

• introducing into the relationship a property she owned at the commencement of cohabitation;

• receiving a superannuation payout early in the relationship which was used to discharge a mortgage; and

• undertaking almost the entire responsibility for the care of the children in the many years following separation.

Initial contributions

21 The husband had no assets of substance at the commencement of cohabitation.

He did not own a motor vehicle and had a debt of approximately $2,000. The wife had equity in a property, superannuation entitlements and a household of furniture and effects. There was no evidence whether she owned a motor vehicle.

22 At the commencement of cohabitation, the wife owned a property in

[the suburbs]. She had purchased the land in November 1988 for $27,500 and built a home on the block at a cost of $38,375. She paid a deposit of $14,000 and borrowed $52,000 to meet the balance required. The home was completed only shortly before the parties commenced cohabitation.

23 The wife was not cross-examined on her claim that at the commencement of

cohabitation the [suburban] property was worth about $90,000 and was encumbered by a mortgage of $50,000. On the other hand, the wife gave no evidence to indicate the basis upon which she had estimated that her $14,000 deposit had turned into $40,000 equity in the space of approximately one year. In this regard it is noted that the property was sold in October 1993, four years after commencement of cohabitation, for $106,000.

24 The wife was working for Westpac Bank when she acquired the [suburban]

property. She received a staff discount of 2% on the interest on the mortgage. The mortgage repayments were deducted directly from her wages until she ceased employment with the Bank in late 1992. The wife asserted that the husband made no financial contribution at all for the first six months of the relationship. This was not denied by the husband.

25 The wife had been working with Westpac since May 1981 and had built up

entitlements as a member of the staff superannuation plan. When she ceased work in 1992, she received $26,858 in superannuation entitlements. This money was used to fully discharge the mortgage on the [suburban] property. The wife still has the preserved portion of her Westpac superannuation entitlements, which were worth $25,649 at the time of trial.

26 In September 1993, the parties purchased a property [nearby]. The purchase

price and expenses amounted to $135,626. The parties paid a deposit of $4,000 and borrowed the balance on a loan secured by mortgage. When the [first] property was sold in October 1993, the wife received $101,414 net. From this amount, she paid $80,000 (not $50,000 as asserted by the husband) in reduction of the mortgage

[2009] FCWA 29

recently taken out on [the new property]. (The mortgage on [the new property] was
later extended to cover the $12,000 cost of a swimming pool.)

27 The parties used some of the balance of the proceeds of sale of [the first

property] to acquire a [small motor vehicle] in October 1993 at a cost of nearly $16,000. The husband removed that vehicle at the time of separation. The wife retained [another car] which was purchased in 1996 at a cost of $23,500. At separation the wife retained most of the furniture and household effects she brought into the relationship, together with items that were acquired while the parties were together.

Contributions during the relationship

28 I am satisfied that the contributions the parties made during the period of the

relationship were of similar value. The wife worked until near the birth of the first child and then had primary responsibility for the children and the home. The husband also worked hard and was the primary income earner after the wife stopped work.

Contributions since separation

29 After separation the husband continued working full time (save for a short

period between jobs when he was made redundant). He has not acquired any additional assets of substance, although his superannuation entitlements have been built up during this period.

30 The wife did not work for wages again until July 2003, when she obtained part

time cleaning work with [an agency]. It will be noted that the children were still very young when the parties separated. The wife has continued to work since 2003, juggling her employment around her responsibilities to the children. She has had very little assistance from the husband in the care of the family, given the very limited contact the husband has had with the children.

31 Following the separation the husband advised the wife that instead of paying

child support, he would meet the monthly mortgage repayments of $300 and the household bills. There is dispute about whether this was more or less than what the husband would have been obliged to pay by way of child support. In any event, the wife allowed the arrangement to continue until December 2004, at which time she made an application for child support.

32 Around this time the husband ceasing making any financial contribution for the

benefit of the wife and children. He was apparently irate because the wife had spent funds on taking a holiday to Bali. Arrears accumulated over a period of about a year, during which the husband made no payments. In due course the husband was obliged to meet his child support obligations and reduce the arrears. The wife assumed responsibility for the mortgage payments when the husband stopped paying, although the payments she made were fairly nominal.

[2009] FCWA 29

33 The wife has had the occupation of the former matrimonial home since the

separation. She has, however, maintained the house and garden and painted the inside
of the home.

34 Since the separation, the husband has lived some of the time with his parents and

some of the time in the home of [Ms M]. The wife suspects that the husband has acquired an interest in the home owned by [Ms M], however, there was no evidence to prove that this was the case.

35 After separation the husband received a redundancy payment of $25,000 from

his former employer, [AA], of which $20,000 was used to reduce the mortgage on the former matrimonial home. The husband acknowledged in his Papers for the Judge that he had used $5,000 from the redundancy for his own purposes (he says it was to “maintain and furnish alternative accommodation” although he does not say what accommodation that was).

Assessment of contributions

36 The wife made the greater initial contribution, particularly the equity in the

home she owned and her superannuation entitlements. It is difficult to quantify the extent of these contributions. In the absence of any challenge by the husband, it is reasonable to proceed on the basis that the wife could have had as much as $40,000 equity in the home, notwithstanding that she had paid only a deposit of $14,000. Given the years the wife had worked at the Bank before the commencement of cohabitation, it would also be reasonable to proceed on the basis that the majority of the superannuation payment which the wife received of $26,858 (and the preserved payment she still has of $25,649) was accumulated prior to the commencement of the parties’ relationship.

37 I accept there is substance in the submission made by counsel for the wife that

were it not for these initial contributions made by the wife, the parties would not have been able to accumulate the assets they currently have available for distribution. I therefore consider that weight should be placed on the disparity in initial contributions.

38 I have already found that contributions made during the course of the 11 year relationship were equal.

39 The wife asserts that contributions post separation should be assessed in her

favour in view of the fact that she has had almost sole responsibility for the care of the children. This is, of course, a significant factor but it should, to some extent, be offset by the financial contributions the husband did make after separation. I consider it is also relevant to take into account that the wife has had the benefit of the occupation of the former matrimonial home for only a very modest outlay.

40 In assessing the post-separation contributions, I do not place any significant

weight on the contribution by the husband of the redundancy payment from [AA]. It is noted that the husband had commenced his employment with [AA] after commencement of cohabitation and was made redundant fairly soon after the parties separated. It would be proper to infer that the redundancy entitlement related to his

[2009] FCWA 29

period of service with [AA], during which time the wife was making her contribution
by working and/or caring for the family.

41 In the exercise of the broad discretion available to me, I consider that an

assessment of contributions in proportions 57.5% to the wife and 42.5% to the husband is warranted. Although the 60:40 assessment proposed by the wife would not be outside what I would regard as the reasonable range of discretion, my view is that it does not quite give sufficient credit to the husband for the financial and other contributions he has made during and after the relationship.

Section 75(2) factors

42 Counsel for the wife submitted that a 15% adjustment on account of s 75(2) factors would be the minimum adjustment that would be warranted.

43 The husband did not have any appreciation of the issues associated with

adjustments pursuant to s 75(2) and was unable to indicate to what extent, if any, he considered an adjustment was warranted. The orders that he sought would indicate that he believed that no adjustment was necessary.

44 My findings in relation to the s 75(2) factors that may have relevance are set out

below.

45 The wife is 46 and the husband 44 years of age. They both enjoy good health.

46 The property and financial resources of the parties have been detailed already.

The husband earns around $52,000 per annum. He acknowledges his employment is secure. The wife earns around $34,000 per annum. In my view, she may be able to earn more income in later years when she does not have the responsibilities she currently has to the children.

47 The wife currently has the care and control of the two children who are aged 16 and 12 years respectively. It will be many years before they are financially independent, although it is noted that [A] does have a small income at present. The husband is paying child support of only $184.52 per fortnight under an amended assessment although it would seem to me that the wife may be able to do something to have that remedied as his assessment has been made without benefit of a tax return and is based on an income less than what the husband has disclosed he earns.

48 Neither party has unusual commitments or responsibility to support anybody other than themselves and the children.

49 The wife has some entitlement to Centrelink benefits. She was receiving

$112 per week from this source when she made her statement of financial
circumstances.

50 Both parties have superannuation entitlements. The husband at present is

accumulating greater superannuation benefits than the wife, as he has a greater
income.

[2009] FCWA 29

51 Both parties have a modest standard of living. The wife is not cohabiting with

any other person, whereas I have found on the balance of probabilities that the husband is, or will be, living with [Ms M]. Even if I am wrong in that regard, on his version of the evidence, he is sharing accommodation with a friend, which would reduce to some extent his outgoings.

52 The period of cohabitation amounted to about 11 years. The marriage has had

no adverse impact on the husband’s ability to earn an income. On the other hand I accept that the marriage has had an adverse impact on the wife’s earning capacity. Her unchallenged evidence pointed to the advancement she made within the bank prior to resigning to have children. I am satisfied that if she remained in the Bank she would have had a reasonable prospect of securing further advancement and being in a position to earn a greater income than that which she presently enjoys. The wife had considerable difficulty getting back into the workforce, having originally been required to take on work as a cleaner. Even now, the wife has to tailor her employment around the responsibilities she has to the children.

Assessment of s 75(2) factors

53 In my view, the matter of greatest significance is that the wife will continue to

have responsibility for the accommodation and care of the two children of the relationship for a number of years. It is also significant that the husband has a somewhat greater earning capacity than the wife at the present time and will continue to accumulate superannuation entitlements at a greater rate than the wife, whose earning capacity has been adversely affected by being out of the workforce for many years.

54 The husband submitted in the course of his closing address that it was unfair that

he would be receiving a large proportion of his settlement in the form of superannuation, as he might never receive the benefit of it. I pointed out to the husband that it was open to him (and his former legal advisers) to have sought a superannuation splitting order, which would have ensured there could have been a more equitable mix of superannuation assets in each party’s settlement. No application having been made for a superannuation splitting order, I was not able to make such an order.

55 The fact remains, however, as the husband submitted, that he will be receiving

much of his settlement in the form of superannuation, which is of little use to him in obtaining accommodation and meeting his commitments until he is able to access his superannuation. For the reasons I expressed in the matter of Woollams and Woollams (2004) FLC 93-195, I consider this is a relevant consideration to be taken into account (either in assessing the s 75(2) adjustment or the overall justice and equity of the orders to be made). I propose to take it into account on this occasion in the s 75(2) adjustment.

56 In my view, an adjustment of 12.5% in favour of the wife on account of s 75(2) factors is warranted.

[2009] FCWA 29

57 I therefore propose that the assets will be divided in proportion 70% to the wife and 30% to the husband.

Just and equitable?

58 As the final step in the process I am required to step back and consider whether

or not the outcome based upon assessment of contributions and the adjustment on
account of s 75(2) factors brings about a result that is just and equitable.

59 In determining whether or not the outcome is, in fact, just and equitable it is

important to note the impact of the s 75(2) adjustment in dollar terms rather than in purely percentage terms. The effect of the 12.5% adjustment is in the region of $76,675 but changes the disparity between the parties by double that amount (see Phipson & Phipson [2009] FamCAFC 28 at [39]).

60 Although I accept that both parties are going to have financial difficulties in the future, I am nevertheless satisfied that the outcome I propose is just and equitable.

Orders
61	The wife has indicated that if the property was to be divided in proportions
75:25 in her favour, she would be able to afford to acquire the husband’s interest in the former matrimonial home. The impression I had from hearing her counsel was that she would still be able to afford to retain the property if the settlement was not quite as favourable to her as she proposed.
62	On this basis I propose making the following orders; however, if the wife
determines that she is unable to afford to pay the husband the amount required, I will make orders for the sale of the property.

1. The wife shall pay to the husband within ninety (90) days the sum of $75,216.

2. Simultaneously with payment of the said sum the husband shall transfer to the wife his interest in the property [being the former matrimonial home] (Certificate of Title Volume xxx Folio xxx).

3. All of the husband’s interest, if any, in the personal property, chattels, superannuation or bank accounts in the possession or name of the wife vest in the wife absolutely.

4. All of wife’s interest, if any, in the personal property, chattels, superannuation or bank accounts in the possession or name of the husband vest in the husband absolutely.

5. If either party intends to seek an order for costs they shall file and serve submissions in support of that application within 21 days of the making of these orders.

[2009] FCWA 29

6. The respondent to any application for costs file and serve any written submissions in response thereto within 14 days of service of the applicant’s submissions.

7. The applicant file and serve any submissions in reply within seven days of service of the respondent’s submissions.

8. Any submissions relating to costs must be accompanied by a letter drawing the submissions to the attention of the Chief Judge’s Administrator.

9. The application and response insofar as they deal with financial issues be otherwise dismissed.

I certify that the preceding [62] paragraphs are a true copy of the reasons for

judgment delivered by this Honourable Court

Associate