Campion & Campion
[2008] FMCAfam 677
•15 August 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CAMPION & CAMPION | [2008] FMCAfam 677 |
| FAMILY LAW – Property – 38 year marriage – allegations of violence, alcoholism and gambling – health problems – disparate earning capacity – 57.5% of asset pool to the wife. FAMILY LAW – Spousal maintenance – needs of wife, in view of property settlement – application dismissed. |
| Family Law Act 1975, ss.72, 74, 75, 79, 117 |
| Hickey v Hickey (2003) FLC 93-143 In the marriage of Weir (1992) 16 Fam LR 154 Marriage of Kennon (1997) 22 FLR 1 Oliver & Gall [2008] FMCAfam 164 Spagnardi & Spagnardi [2003] FamCA 905 Spence & Spence [2008] FamCA 263 |
| Applicant: | MS CAMPION |
| Respondent: | MR CAMPION |
| File Number: | DGC 720 of 2007 |
| Judgment of: | Riley FM |
| Hearing dates: | 25 & 26 June 2008 |
| Date of Last Submission: | 26 June 2008 |
| Delivered at: | Melbourne |
| Delivered on: | 15 August 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr Mort |
| Solicitors for the Applicant: | Waters Timms Pty Ltd |
| Counsel for the Respondent: | Mr Leeton |
| Solicitors for the Respondent: | John Crump |
ORDERS
All extant orders be discharged.
Within 60 days of the date of these orders, the wife pay to the husband the sum of $161,233.92 (“the payment”), including:
(a)the $64,000 in the bank account held in the name of the wife;
(b)the $34,000 contained in the joint account held in the names of the husband and wife;
(c)the $29,873 held by the wife from the safe; and
(d)an additional $33,360.92.
Contemporaneously with the payment:
(a)the husband sign all documents and do all things necessary to transfer to the wife, at the expense of the wife, all of his right title and interest in the real property situate at and known as Property M being the whole of the land more particularly described in Certificate of Title Volume [omitted] Folio [omitted](“the real property”);
(b)the husband provide to the wife, at his expense, a Withdrawal of Caveat registered number [omitted];
(c)the wife indemnify the husband against all payments and liabilities in respect of all apportionable rates, taxes and other outgoings in relation to the real property of whatsoever nature and kind; and
(d)the husband vacate the real property.
In the event that the whole of the payment has not been made within
60 days of the date of these orders, then the parties forthwith sign all documents and do all things necessary to cause the real property to be forthwith sold altogether out of court (“the sale”) and upon completion of the sale, the proceeds of the sale be applied as follows:
(a)firstly, to pay all costs, commissions and expenses of the sale;
(b)secondly, to discharge any mortgage or encumbrance affecting the real property; and
(c)thirdly, the balance be divided between the parties so as to give the wife 57.5% of the asset pool, after taking into account the property she is to retain under these orders, and so as to give the husband 42.5% of the asset pool, after taking into account the property he is to retain under these orders.
Pending the payment referred to in order 2 and pending the sale, if any, referred to in order 4:
(a)the husband keep the real property in good order and condition and pay all rates, taxes and like outgoings in respect of the real property as they fall due;
(b)the parties hold their respective interests in the real property upon trust pursuant to these orders; and
(c)neither party encumber the real property without the consent in writing of the other party, save for the purposes of refinancing to meet the payment.
Each party have liberty to apply regarding the terms, conditions and execution of the sale of the real property.
The husband retain for his sole use and benefit:
(a)the property at Property C being the whole of the land more particularly described in Certificate of Title Volume [omitted] Folio [omitted] for his sole use and benefit, and the husband be liable for and indemnify the wife in respect of the payment of any Capital Gains Tax attributed to the Property C property, any mortgage encumbrance affecting the Property C property and all other liabilities of whatsoever kind and nature related thereto.
(b)his interest in [C] Pty Ltd, and the husband is to indemnify the wife and keep her indemnified against all debts, liabilities, including taxation liabilities past, present or future in respect of [C] Pty Ltd including but not limited to any liability for income tax on any monies actually or notionally attributed to the wife, and including any personal guarantees given by the wife and all interest and costs and penalty in relation thereto;
(c)the AMP shares registered in the husband’s name;
(d)the husband’s superannuation entitlements;
(e)the husband’s household contents;
(f)the caravan; and
(g)the $5,000 from the safe.
In the event that the real property is sold pursuant to order 4, the husband further retain for his sole use and benefit the $34,000 contained in the joint account held in the names of the husband and wife.
The wife retain for her sole use and benefit:
(a)the 2001 Ford Sedan motor vehicle;
(b)the AMP shares registered in the wife’s name;
(c)her superannuation entitlements;
(d)the three AMP Life Insurance Policies of which she is the beneficiary; and
(e)the wife’s household contents;
In the event that the real property is sold pursuant to order 4, the wife further retain for her sole use and benefit:
(a)the $64,000 in the bank account held in the name of the wife; and
(b)the $29,873 from the safe.
The wife’s costs of the proceeding on 17 June 2008 be paid by the husband.
Unless otherwise specified in these orders and save for the purpose of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action), chattels, shares, motor vehicles, home contents and furniture, jewellery, cash and other funds in the possession of such party as at the date of these orders;
(b)insurance policies remain the sole property of the owner named thereon;
(c)each party retain any superannuation entitlements belonging to or earned by that party to the exclusion of the other party;
(d)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(e)any joint tenancy of the parties in any real or personal estate is expressly severed.
All extant applications, including the spousal maintenance application, otherwise be dismissed.
Pursuant to rule 21.15 of the Federal Magistrates Court Rules 2001, it is certified that it was reasonable for each of the parties to employ an advocate.
IT IS NOTED that publication of this judgment under the pseudonym Campion & Camption is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
DGC 720 of 2007
| MS CAMPION |
Applicant
And
| MR CAMPION |
Respondent
REASONS FOR JUDGMENT
Background
This is an application for property settlement. The parties were married on 29 April 1966 when the husband was 19 and the wife was 17. Final separation occurred when the wife moved out of the matrimonial home on 6 August 2004. The marriage lasted about 38 years. There are two daughters of the marriage, [X], who was born in 1968 and [Y], who was born in 1971. Both daughters live independently of their parents and are estranged from their mother. The wife alleges that the husband was a violent alcoholic and a gambler.
The legislation
Section 79 of the Family Law Act1975 (“the Act”) empowers the court to make such orders as it considers appropriate altering the interests of the parties to a marriage in their property. In determining applications for property settlement, s.79(2) of the Act provides that:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 79(4) of the Act sets out the matters the court must take into account when considering the orders it should make for the alteration of the interests of the parties in their property. Those matters are:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The matters to be taken into account under s.75(2) of the Act are as follows:
(a)the age and state of health of each of the parties;
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
(e)the responsibilities of either party to support any other person;
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party;
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
(l)the need to protect a party who wishes to continue that party’s role as a parent;
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation;
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party;
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties.
The four step approach
In Hickey v Hickey (2003) FLC 93-143 at [39], the Full Court of the Family Court described the preferred four step approach in property matters as follows:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), ("the other factors") including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case ….
STEP 1: The asset pool
The parties agreed that their assets, liabilities and financial resources were as follows:
Property M
$345,000
Wife’s 2001 Ford Sedan
$7,000
Husband’s share in business
$12,625
Wife’s AMP shares
$6,000
Husband’s AMP shares
$6,400
Wife’s Superannuation
$12,000
Husband’s Superannuation
$46,600
Joint Account
$34,000
Wife’s savings
$64,000
Property C (equity)
$28,137
AMP Life Insurance Policy #1 owned by wife
$8,210
AMP Life Insurance Policy #2 owned by wife
$15,151
AMP Life Insurance Policy #3 owned by wife
$12,602
Husband’s household contents
$5,000
Wife’s household contents
$4,000
Caravan
$14,000
TOTAL:
$620,725
In addition, the wife had kept some money in a safe. It was agreed that some of the money in the safe belonged to the parties’ daughter, [Y], and her husband [name omitted]. That amount totalled $5,113.50 and was given to [Y] during the course of the trial. A sum of $5,000 was given by agreement to the husband during the course of the trial as part of his property settlement. The remaining $29,873 was released by agreement to the wife during the course of the trial on the basis that the court would decide whether it was part of the asset pool and, if so, would characterise it as either a partial property settlement or spousal maintenance.
The wife said that she had put the money in the safe over a period of about 10 years mostly during the period of cohabitation. She said that the money was hers because it came from her earnings. However, that is not how matrimonial property is considered. The court includes all of the assets of both parties and then makes an appropriate property settlement based on the circumstances of the case. I do not consider that the money put in the safe should be treated as the wife’s money exclusively, any more than the assets accumulated with the husband’s earnings should be treated as his money exclusively. Accordingly, the sum of $34,873 is to be included in the asset pool. Of that, $29,873 will be considered to be money in the possession of the wife and $5,000 will be considered to be money in the possession of the husband.
The wife in her financial statement failed to disclose the contents of the safe. She said that she did not disclose the contents of the safe because the husband stole the safe and it was not in her possession when she swore her financial statement. The husband agreed that he had taken the safe. He was unable to open it. Eventually, the safe was lodged by court order with the husband’s then solicitor for safe keeping. The wife maintained that the contents of the safe were her own money. Therefore, even if she did not have possession of the safe, she was obliged to disclose the value of its contents.
The wife also failed to disclose the life insurance policies. She said that they were in the name of the husband. However, the wife is the beneficiary. That is, she is the one who will receive the money when they mature. It may be that, strictly speaking, the life insurance policies are not a present asset in that their value is prospective and conditional. However, the wife through her counsel conceded that the life insurance policies should be treated as part of the asset pool and I will do so.
Since about January 2008, the husband has received $100 per week rent from a lodger. He did not disclose that income until he was cross-examined. At that point, the husband said that the lodger had not paid any rent until after the husband had sworn his financial statement on
10 December 2007. The husband said that a couple of weeks ago, the lodger had caught up with his rent and paid him $2,400. The husband said that the $2,400 should not be added back into the pool because it was used to pay arrears of the lodger’s gas, electricity and lawn mowing. That evidence was not disputed and I accept it.
The husband did accept that his 2007 tax return of $863 should be added back to the asset pool. That figure will be added to the asset pool and treated as money in the husband's possession.
In addition, the wife said that the husband owed her half of the expenses that she paid for their granddaughter’s funeral. The wife produced a contract between her son-in-law and the funeral director which had a notation on it that said that $5,545.32 had been paid by bank cheque on 27 February 2006. That was nearly two years after separation. It was very good of the wife to attend to the payment of her granddaughters’ funeral expenses, at what must have been a heartbreaking time for the whole family.
However, there was no evidence that the funeral expenses were paid by the wife with money she earned after separation. Even if the funeral expenses had been paid from post-separation income, that income would still in the normal course be treated as part of the assets of the parties and be susceptible to adjustment by the court. In all the circumstances, I consider that it is best to treat the funeral expenses as money that was reasonably spent by one of the parties on behalf of both parties and leave it at that.
All in all, the total asset pool is as follows:
ASSET
VALUE
Property M
$345,000
Wife’s 2001 Ford Sedan
$7,000
Husband’s share in business
$12,625
Wife’s AMP shares
$6,000
Husband’s AMP shares
$6,400
Wife’s Superannuation
$12,000
Husband’s Superannuation
$46,600
Joint Account
$34,000
Wife’s savings
$64,000
Property C (equity)
$28,137
AMP Life Insurance Policy #1
$8,210
AMP Life Insurance Policy #2
$15,151
AMP Life Insurance Policy #3
$12,602
Husband’s household contents
$5,000
Wife’s household contents
$4,000
Caravan
$14,000
Money from safe
$29,873
Money from safe
$5,000
Husband’s 2007 Tax Return
$863
TOTAL
$656,461
STEP 2: Contributions
Initial contributions
The parties agreed that neither of them had any assets of any significance at the commencement of the relationship.
Contributions during the marriage
During the marriage, the husband was the principal breadwinner and the wife was the principal homemaker. However, the wife also contributed financially by working full-time and part-time at various times throughout the marriage. At the commencement of the marriage, the husband was employed as a [occupation omitted] at Williamstown. In about 1985, the husband formed a company with Mr S trading as [C] Pty Ltd. That business continues to trade.
The wife said that the husband was physically and emotionally abusive during the marriage. The husband said that there had been physical violence during the marriage from both parties but claimed that it had ended 38 years ago. The wife said that the last time that the husband had hit her was when they lived in Lakes Entrance and when she was pregnant with [Y], who was born in 1971. The wife said that the parties moved from Lakes Entrance in 1981. I accept that the husband physically abused the wife early in the marriage.
The wife claimed that the husband had hit her repeatedly around her head and her ear. The wife said that when she was pregnant with their first child, [X], the husband hit her so hard with his right hand on the side of her head that it caused her ear drum to burst. The husband conceded that the wife had had a burst ear drum but denied that he had caused it. There was no medical evidence about the cause of the wife's burst ear drum. However, I accept that the circumstances of this event were such that the court can accept, and I do accept, that the husband's assault on the wife caused her ear drum to burst.
The wife also claimed that the husband's repeated assaults caused her to need surgery for a tumour in her inner ear in June 2003. There was no medical evidence linking the assaults to the tumour. There is not an obvious connection between the assaults and the tumour. I am unable to accept that the husband’s assaults on the wife caused her tumour.
The wife claimed that after her husband stopped physically assaulting her, he continued to emotionally abuse her. The emotional abuse consisted of the husband telling the wife that she was “no good”. The wife said that she has seen two counsellors since separation because she felt suicidal. The wife said that she also goes to Al-Anon two or three times a week. She says that organisation is for the families of alcoholics and she finds it very supportive. The wife said that she takes antidepressants. I accept this evidence.
The wife said that the husband was an alcoholic who drank to excess every day. The husband’s counsel suggested that the husband was a moderately heavy drinker. The husband wrote and signed a note dated 3 December 2000 which said, among other things:
I am definitely going to stop the sickness that's been in my family for so long, alcohol killed my dad, and his dad so I'm not going to let it happen a third time.
The husband wrote and signed another note on 4 December 2000 which said as follows:
To whom it may concern,
I, Mr Campion, of [Property M], do solemnly swear if one drop of alcohol passes my lips or one cent of my money goes on gambling I therefore give my wife Ms Campion authority to sell our homes and divide our assets equally amongst us both.
The husband admitted in cross examination that he drank seven or eight pots of beer a day. He agreed that during the marriage he sometimes drank more. He said that he was convicted for drink driving on three occasions. The first was in about 1983 when his blood alcohol reading was 0.16%. He lost his licence for two years. The second occasion was in the early 1990’s when his blood alcohol reading was 0.12% or 0.13%. On that occasion, the husband lost his licence for four years. The third occasion was in the late 1990’s or early 2000. The husband’s blood alcohol reading was again 0.12% or 0.13%. On that occasion the husband lost his licence for 13 months.
The husband said that he continued to drink when he had lost his licence but did not drive. He said that he would telephone home and ask his wife or one of his daughters to collect him from the pub. The husband said that, once he started the [omitted] business, he would do quotes in the morning and then go to the pub at about 1.00 pm. He said he would drink and put money on the races and be home by 4.30 pm. He said that he was not drunk when he got home. I do not accept that claim.
The husband said that until the mid-1980’s, he did not drink until he finished work at 4.00 pm, 5.00 pm or 6.00 pm. He said that after work, he would go to the pub with his mates two or three times a week.
He agreed that sometimes the children would already be asleep in bed when he got home. I conclude that the husband was a very heavy drinker, if not an alcoholic, for most of the marriage, and expended a considerable amount of money over the years on alcohol.
The husband maintained that he did 80% of the cooking and all of the housework. He said he did the housework on weekends and on wet days when he was unable to do [omitted]. The husband said that the wife said to him that “The only two people who can do the house like this, is you and me.” That suggests that the wife was doing some of the housework as well. The husband said that he had concreted the driveways and built things out the back. The wife said that she had looked after the garden.
The husband said that wife had an affair 20 years ago and the marriage did not recover. This allegation was not put to the wife. I am unable to take it into account, partly for reasons of natural justice and partly because it is irrelevant.
The wife said that the husband wasted a lot of money during the marriage on gambling. She said that, on an unspecified occasion, she spoke to the husband’s partner, Mr S, who showed her a blue book.
She said it contained an inventory of the cash Mr S had earned in that year which the wife said amounted to $32,000. The wife did not claim that the blue book included cash figures for the husband. However, she asked the court to infer that the husband, as an equal partner, would have received the same amount in cash each year as Mr S and that the husband spent it on gambling.
I consider this evidence to be too tenuous to draw the inferences suggested by the wife. She did not subpoena the blue book or Mr S. Accordingly, there is nothing to substantiate her assertions, which were denied by the husband. In any event, even if the husband did receive $32,000 a year in cash, it does not follow that the husband spent all of that money on gambling. He may have contributed some or all of that money to the family.
The husband claimed that he had paid the wife $750 per week for housekeeping. She said that he only paid her between $500 and $600 per week. Neither party provided any documentary evidence about this matter to the court or said at which stage of the marriage this amount was paid. I accept that the husband gave the wife at least $500 per week towards the end of the marriage. It was not entirely clear whether this amount was just for housekeeping or also for bills, clothing, furniture and so on. In any event, at the end of the day, the parties had acquired assets in excess of $600,000, and the husband was contributing a substantial amount each week to the household. The husband clearly did not gamble away everything the parties had.
The husband admitted that he spent some money on gambling but claimed that it was on a scale that was consistent with normal entertainment expenses. The husband wrote and signed the note set out above on 4 December 2000 which said as follows:
To whom it may concern,
I, Mr Campion, of [Property M], do solemnly swear if one drop of alcohol passes my lips or one cent of my money goes on gambling I therefore give my wife Ms Campion authority to sell our homes and divide our assets equally amongst us both.
I consider that the husband would only have promised not to spend money on gambling if his expenditure was on a large enough scale to cause problems in the marriage, and was beyond a reasonable expenditure on recreational activities. On the other hand, the parties accumulated assets of about $650,000 during the course of their marriage in circumstances where their earnings were not great. At the time of the hearing, there was about $34,000 in a joint account and a further $64,000 in an account in the wife’s name. This suggests that the husband’s gambling was not extreme, although the wife may have been put to some pains to keep it in check. One way or another, there is insufficient evidence before the court to precisely quantify how much the husband might have spent on gambling.
The husband failed to produce his credit card statements. The wife submitted that those statements would have shown that the husband gambled heavily. I accept that where “there has been a deliberate non disclosure, the court should not be unduly cautious about making findings in favour of the innocent party.”[1] I find that the husband deliberately failed to disclose his credit card statements. However, I do not know what level of gambling expenditure they might have shown.
[1] In the marriage of Weir (1992) 16 FamLR 154 at 158
The wife also failed to disclose that she was the beneficiary of three life insurance policies and failed to disclose the cash contained in a safe. She was represented at the time her first financial statement was filed on 24 November 2004, but not when her second financial statement was filed on 15 October 2007. However, the truth about the matters that the wife failed to disclose has now emerged.
The truth about the extent of the husband’s gambling has not emerged, in part because the husband failed to produce his credit card statements. The husband contributed less to the family financially than he otherwise would have because of his gambling. However, he still substantially supported the family, although the wife also worked outside the home as well.
The wife maintained that she was very frugal and spent virtually nothing on recreational activities. I accept that evidence.
Contributions post separation
Immediately after separation, the wife stayed with her daughter [Y] for three months. The wife paid no rent but did housework, ironing, looked after the children and paid some bills. The wife then moved to her daughter [X]’s garage. The wife paid $50 per week rent and also paid the rates and did some housework. After a major falling out with [X], the wife moved into rented accommodation. The husband remained in the matrimonial home which had no mortgage.
In September 2007, the husband bought the property at Property C. It is registered solely in the husband’s name. The husband initially bought the property to accommodate his daughter [Y] after her eight year old daughter had died unexpectedly and after [Y] had separated from her husband. The husband sometimes stays at the Property C property and in the future wishes to live there himself.
The husband bought the Property C property, in part, with some of his superannuation. That was in breach of an order that he not deal with matrimonial property. He also sold a caravan in breach of the orders. He has agreed that the value of the caravan should be added back to the pool. The superannuation money has been converted to an asset in another form, so there is no need for an add back on that account.
Contribution based entitlements
The wife submitted that this is a case where the domestic violence perpetrated on her by the husband had made her contributions more onerous in the way described by Fogarty and Lindenmayer JJ in the Full Family Court’s decision in the Marriage of Kennon (1997) 22 FLR 1 at 24 where their Honours said:
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party's contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the party's respective contributions within section 79. We prefer this approach to the concept of “negative contributions” which is sometimes referred to in this discussion.
In the above formulation, we have referred only to domestic violence, for the reasons which we indicated earlier, but this application is not limited to that.
…
It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect and of necessity it does not encompass … conduct related to the breakdown of the marriage (basically because it would not have had a sufficient duration for this in impact to be relevant to contributions). …
The Full Family Court in Spagnardi & Spagnardi [2003] FamCA 905 elaborated on the meaning of the passages extracted from Kennon above. At paragraphs 43 and 45 to 48 of Spagnardi, the Full Court said:
43. At paragraph 54 of the judgment [below] his Honour said:
“54. It is true that there is no explicit evidence by the wife to the effect that the violence made her performance of her contributions more arduous. However I accept that on the evidence before me it is obvious that her contributions as a homemaker and parent must have been made significantly more arduous than they ought to have been because of the violence inflicted upon her by the husband. On the other hand, the lack of specific and detailed evidence about its effect on those contributions makes it inappropriate to make a substantial adjustment in her favour because of this factor."
45.We agree with his Honour the trial Judge’s summary of the law as contained in his ruling. In particular his reference to Kennon (paragraph 13 and paragraph 18):
“13. If one looks at that passage, it seems to me that the key words are that the violence is demonstrated to have ‘a significant adverse impact’ on the parties’ contributions, or made them ‘significantly’ more arduous.
18. It seems to me that that question of interpretation of the judgment in Kennon is of great importance in resolving this matter. As has been apparent, I have found it a difficult one. It seems to me that the question of whether the evidence in this case is admissible or not, is one of some difficulty. It is partly one of difficulty because the wife’s material, although it refers to some specific acts of violence, does not expressly refer to the impact of the violence on her contributions. It cannot, however, be the law that the failure to state such matters expressly is necessarily fatal to such evidence; there must be cases where it is obvious or a very likely inference from the facts, that certain kinds of violence must have adversely affected a person’s contributions. The question in the present case is whether the material on behalf of the wife can be said to fall within that category.”
46.In addition to that stated by the trial Judge we would not want the reference in Kennon to "exceptional" on page 84,294 to be understood to mean rare. We do not agree with this qualitative description and would be more inclined to the view expressed by the trial Judge at paragraph 17:
In his submissions, Mr Schonell, quite understandably and quite correctly, drew my attention to the strength of the language, referring to ‘exceptional cases’ and ‘the relatively narrow band of cases’. However, it seems to me that, reading these passages as a whole, the references to ‘exceptional cases’ and ‘narrow band of cases’ occurs in the context of the principle of misconduct in general rather than the more narrow formulation about domestic violence. My reading of these passages, therefore, is that it is not necessarily correct that only cases of exceptional violence or a narrow band of domestic violence cases fall within the principles. It seems to me that reading these passages carefully, the key words in a case where there are allegations of domestic violence are ‘significant adverse impact’ and ‘discernable impact’. That reading of the passage is, I think, given some additional force by the actual decision in the Doherty case and the judgments of Baker J in both Doherty and Kennon.
47.An insufficiency of evidence in the present case leaves the Court with a limited ability to deal with allegations in the context of section 79 proceedings. As Kennon has established, it is necessary to provide evidence to establish:
· The incidence of domestic violence;
· The effect of domestic violence; and
· Evidence to enable the court to quantify the effect of that violence upon the parties capacity to “contribute” as defined by section 79(4).
48.We do not agree that the evidence in this case could properly have led to an adjustment pursuant to section 79. There was no suggestion by counsel of the wife that his Honour did not correctly summarise the evidence in relation to this topic. The particular deficiency apart from those referred to by the trial Judge is the complete absence of evidence as to how the husband’s conduct affected her ability to contribute.
Kennon and Spagnardi were considered by Wilson FM in Oliver & Gall [2008] FMCAfam 164. His Honour said:
23.… the conduct of one party to a marriage towards the other is both relevant and admissible if there is evidence linking that conduct to the contributions made by the other party to the marriage.
27.It is therefore of critical importance for evidence of marital misconduct to be relevant and admissible for there to be evidence not only about the conduct but for there to be evidence to enable the court to quantify the effect of that conduct upon the other party's capacity to contribute. It is that shortcoming which is particularly stark in the present case.
Counsel for the husband relied on a decision of Strickland J in Spence & Spence [2008] FamCA 263 where his Honour sat as a single judge to review a decision of a Judicial Registrar. His Honour said at [163] that:
There is no doubt that there was some domestic violence during the marriage, but there is no basis to find that “there was a course of violent conduct” by the husband which had “a significant adverse impact” upon the wife’s contributions to the marriage. There is simply no evidence provided by the wife to establish the link between any domestic violence by the husband and any impact on her contributions. Certainly the report of the psychologist does not assist in this regard. It does not assist the wife that she may be suffering from post-traumatic stress disorder. That says nothing about whether any conduct by the husband made her contributions “significantly more arduous than they ought to have been”. Thus, this is a claim that cannot succeed.
In the present case, the evidence of the husband was that there had been no physical violence in the marriage for 38 years and that previously both parties had engaged in physical violence. The wife's oral evidence was not entirely clear, but put the last physical violence by the husband towards her while the parties lived in Lakes Entrance and at about the time of [Y]’s birth in 1971. In the circumstances, I find that the physical violence in this 38 year marriage was confined to the first five years.
The wife also claimed that the husband was emotionally abusive by telling her that she was “no good”. The wife claimed that since separation she has been suicidal and has received counselling. I accept those claims. However, she provided no medical evidence linking her present emotional and psychological state to the husband’s behaviour during the marriage. Moreover, the wife has not linked either the physical or emotional abuse to the level of her contributions or the difficulty of her contributions.
In view of Kennon and Spagnardi, it is not open to the court to find that there was domestic violence and then simply conclude that it must have had an adverse impact on contributions. What is required is evidence which shows that the domestic violence by one party had a discernible effect on the contributions made by the other. There is no such evidence in this case.
The wife also implied that that her contributions were greater than the husband’s because she was left to look after the children while he was drinking and gambling. This was a long marriage. There were different routines at different times. On the husband’s own evidence, before 1985, when the children were teenagers, he would drink two or three times a week with his mates after work and, on some of those occasions, would return home after the children were in bed. I find that this occurred often while the children were small.
I accept that the wife contributed more than her fair share to child care when the children were small because the husband was often out drinking with his friends. On the other hand, I accept that the husband did a good deal of the cooking and the housework. His evidence had the ring of truth about it. I consider that the husband contributed more financially than the wife, notwithstanding his heavy drinking and gambling.
The husband acquired the Property C property after separation. He was able to do that in part because he had free accommodation in the matrimonial home while the wife had to pay rent.
All in all, I assess the parties’ contributions as 52.5% by the wife and 47.5% by the husband.
Step 3: the other factors
It was not suggested that any proposed order would have any effect on the earning capacity of either party to the marriage.
The wife is 59 years old and the husband is 61 years old.
The wife has a severe hearing loss in her right ear. She also has a condition which causes painful neck spasms and tremor. It is treated with botox. The wife did not produce any medical evidence about how these conditions might affect her earning capacity.
The husband had a heart attack in 2004. The husband did not produce any medical evidence about how his heart attack might affect his earning capacity.
The husband said in his financial statement sworn on 10 December 2007 that he had an average weekly income of $1,320, consisting of $1,300 salary from the [omitted] business and $20 dividend income. The husband also receives $100 per week rental from his lodger, making a total income of $1420 per week. That works out to an annual income of $73,840. The husband has the property described in the asset pool outlined above.
The husband said that the company provides a utility vehicle for him. He said that he paid for the petrol if he used it for private purposes. However, the husband did not refer to any such expenses in his financial statement and I do not believe that he pays them. Accordingly, I consider that the husband has the benefit of a financial resource consisting of a fully funded company car. The husband does not appear to have any other financial resources.
The wife said in her financial statement sworn on 15 October 2007 that she had a total average weekly income of $189, consisting of a widow's allowance of $124 and salary of $65 from the [omitted] where she works as a shop assistant. The wife's annual income is $9,828. The wife's property is as described in the asset pool outlined above. The wife does not appear to have any other financial resources.
The husband said he no longer had the physical capacity to do the manual labour involved in [omitted]. However, he said that he did quotes. As a principal of the business, he continues to draw a good income from it. He said that at his age, he would not be able to keep working for much longer. I accept that at the age of 61, the husband probably has about 4 years left in the workforce. However, for the foreseeable future, the husband has the physical and mental capacity to do quotes and manage the business so as to continue drawing a good income.
The wife said that physically she is only able to work eight hours a week. She said that very occasionally she had worked an extra day when someone was sick. She said that since she had her tumour, she gets exhausted if she works more than one day per week.
The wife has worked over the years as a sales assistant, kitchen assistant, waitress, machinist supervisor and bakery assistant. I accept that she is unable to work more than one day per week and that she is only able to work in a modestly paid occupation.
Neither party has the care or control of a child of the marriage who has not attained the age of 18 years.
The husband has a mortgage commitment in respect of the Property C property. However, as he is living in the matrimonial home, that mortgage cannot be regarded as a commitment that it is necessary to enable him to support himself. Otherwise, the husband says he has living expenses of $700 a week, including $200 a week for legal fees. The husband has no duty to support anyone else.
The wife indicated in her financial statement filed on 15 October 2007 that she pays rent of $130 per week and has living expenses of $210 per week. She has no duty to maintain any other person.
The wife is eligible to receive and does receive a government benefit in the sum of $124 per week. The husband is not entitled to receive any government benefits.
The parties had a modest but comfortable standard of living during their relationship.
There is no suggestion that any part of the property settlement would be used to increase the earning capacity of either party by enabling that party to undertake a course of education or training to establish himself or herself in a business or otherwise obtain an adequate income.
There is no suggestion that the property settlement would have any effect on the ability of a creditor of a party to recover the creditor's debt.
The marriage in this case is a very long one. The wife married when she was 17 years old and pregnant. It may be that, if not for the pregnancy and marriage, she may have been able to further her education and achieve a higher earning capacity than she presently has.
As the children of the marriage are now adults, this is not a case where there is a need to protect a party who wishes to continue in his or her role as a parent.
Neither party has repartnered. The husband is sharing the Property C property with [Y]. He said in his financial statement that she earns $150 per week. It was not suggested that the husband is contributing to the support of [Y] or vice versa.
Child support is not relevant in this case. There is no financial agreement that is binding on the parties.
In terms of other relevant circumstances, I note that both parties were less than frank with the court and the husband has disposed of assets in breach of court orders. Ultimately, the husband agreed to add back the value of the caravan and the superannuation that he realised to buy the Property C property has been converted to another asset that is included in the pool. There was also the husband’s unreasonable, although unquantified, expenditure on alcohol and gambling.
There is a very great discrepancy in the earning capacity of each of the parties. However, neither of them has very many more years ahead of them in the workforce. In all the circumstances, I consider that an adjustment of 5% in favour of the wife would be appropriate to reflect the step 3 factors.
Step four: justice and equity
I consider that a property settlement of 57.5% in favour of the wife and 42.5% in favour of the husband would be just and equitable in all the circumstances of this case. The total value of the asset pool is $656,461. 57.5% of $656,461 is $377,465.07. 42.5% of $656,461 is $278,995.92. That means that the wife will receive a total settlement worth about $100,000 more than the husband receives.
It was not disputed that the wife should keep the following assets:
Wife’s 2001 Ford Sedan
$7,000
Wife’s AMP shares
$6,000
Wife’s Superannuation
$12,000
AMP Life Insurance Policy #1
$8,210
AMP Life Insurance Policy #2
$15,151
AMP Life Insurance Policy #3
$12,602
Wife’s household contents
$4,000
TOTAL:
$64,963
It was not disputed that the husband should keep the following assets, actually or notionally:
Husband’s share in business
$12,625
Husband’s AMP shares
$6,400
Husband’s Superannuation
$46,600
Property C (equity)
$28,137
Husband’s household contents
$5,000
Caravan
$14,000
Money from safe
$5,000
TOTAL:
$117,762
It is appropriate that the husband should keep the Property C property, as he bought it and ultimately wishes to live there. However, it seems to me that neither party is in a position to buy out the other insofar as the matrimonial home is concerned. It is valued at $345,000. The assets mentioned above which are to be kept by the wife are valued at $64,963. The house plus those assets equals $409,963. If the wife wished to buy out the husband, she would have a shortfall of about $33,000, plus the legal costs of this proceeding. The husband’s assets of $117,762 added to the value of the home equal $462,762. If the husband wished to buy out the wife, he would have a shortfall of about $184,000.
I do not consider that the husband is in a position to buy out the wife. However, the wife may be able to buy out the husband. I consider that it is just and equitable that she be given the opportunity to do so. Accordingly, the orders will give the wife the opportunity to buy out the husband within 60 days. In that event, the wife will need to give to the husband at settlement the sum of $161,233.92 consisting of the $64,000 in her bank account, the $34,000 in the joint account, the $29,873 in the safe and an additional $33,360.92 from a loan or other source.
If wife is unable to buy out the husband, the matrimonial home will have to be sold and the proceeds divided in accordance with these reasons. In that event, the orders will also provide for the husband to keep the $34,000 contained in the joint account and the wife to keep the $64,000 in the bank account and the $29,873 from the safe. This will give the wife a little more than the husband, prior to the sale of the matrimonial home. That is in keeping with the overall split provided for in these reasons.
Spousal maintenance
The wife sought retrospective and prospective spousal maintenance.
Section 72(1) of the Family Law Act 1975 (“the Act”) provides that:
(1)A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
The matters referred to in sub-s.75(2) of the Act are set out above and were considered in the context of the property application. I rely on that consideration for the purposes of the spousal maintenance application as well.
By virtue of s.75(3) of the Act, the court is required to disregard the wife’s entitlement to Centrelink benefits. The court is required under s.74(1) of the Act to take into account the specified matters and then make such order as it thinks proper.
The wife filed an application for interim spousal maintenance of $300 per week on 22 December 2004 at the same time as her property application was filed. At that stage, the wife was represented by solicitors. On 3 February 2005, the spousal maintenance application was adjourned by consent to the judicial registrar’s duty list on
29 March 2005. It is not clear what happened on that date, if anything. The wife's solicitors filed a notice of ceasing to act on 7 April 2005. After that, the wife was unrepresented until about a week before the final hearing. The matter returned to court on 30 June 2005 and on numerous other occasions. The wife did not pursue the spousal maintenance application until the final hearing.
The wife argued that she had not pursued the spousal maintenance application because she was unrepresented and because she was scared of the husband. The wife said that on 31 March 2005, the husband threatened that he would use all of the parties’ joint money on legal fees and would remove the wife's car from her possession. The wife obtained an intervention order against the husband on 1 July 2005 that lasted until 1 July 2007. The wife argued that these circumstances explained why she had not issued her spousal maintenance application and argued that retrospective spousal maintenance was appropriate in the circumstances.
The husband relied on the decision of Strickland J in Spence mentioned above, at paragraph 225, which states as follows:
Spousal maintenance is intended to meet the immediate and future needs of a party, and although it is possible for orders to be made that are retrospective that is unusual and requires precise evidence and specific reasons to succeed. In this case there is no basis for a retrospective order and particularly given there is no evidence before me which would enable me to make a determination as to the wife’s entitlement to spousal maintenance from separation in 1998 until 2007. At any time in that period it was open to the wife to bring a proper application for spousal maintenance to address her then immediate and future needs. She did not do so and as far as I am concerned it is not now open to her to bring an application for past maintenance, and, to repeat, without even any supporting evidence. I note that during the course of these proceedings the wife has attempted to make an application for maintenance by seeking a payment to her by way of property settlement and spousal maintenance, but as the Judicial Registrar stated in his reasons for judgment, that is not a proper application for maintenance and should not be countenanced. I agree with this and I need to do no more than refer to the decision of the Full Court in Clauson and Clauson (1995) FLC 92-595.
Essentially, spousal maintenance is for present and future needs though in exceptional circumstances an order for retrospective spousal maintenance might be warranted. In the present case, the wife had access to about $64,000 in a bank account in her own name and was able to have a holiday in Thailand after separation. Taking into account all of the circumstances of this case, I do not consider that an order for retrospective spousal maintenance would be appropriate in this matter.
As far as prospective spousal maintenance is concerned, the effect of the property orders to be made in this case is for the wife to receive a property settlement of $377,465.07, including the $64,963 of non-cash assets listed above. She will receive a cash figure of about $312,502.07 or the matrimonial home and a debt of about $33,360.
Apart from her widows’ allowance, which must be disregarded, the wife has an income of only $65 per week. I accept that she is unable to earn more than that by reason of her health and the nature of her work experience. Her weekly expenses are set out in her financial statement as $210 plus rent of $130. I accept that the expenses nominated by the wife are reasonably necessary.
However, after the property settlement, the wife will either have the matrimonial home and a mortgage or a cash amount that she could use to buy a home, albeit a smaller one than the matrimonial home. Instead of rent, the wife will have to pay either a mortgage or rates and insurance. No evidence was given about how much they might be. If the wife could take a loan over 20 years, the mortgage would probably be substantially less than the existing rent that the wife pays.
It seems to me that the wife retaining the matrimonial home would be a more expensive option for her than buying a smaller property, such as a unit. I do not consider that the husband should have to subsidise the wife retaining the matrimonial home, when there is a cheaper option for the wife’s accommodation that is reasonably available. That is, I do not consider that the wife’s need for spousal maintenance is to be assessed on the basis of her keeping the matrimonial home. If she wishes to do so, it is a matter for her. The spousal maintenance question depends firstly on the wife’s needs. She does not need to keep the matrimonial home.
If the wife buys a unit, in the absence of any evidence provided by the parties, I estimate that the rates and insurance would amount to about $20 per week or $1,040 per year. If she buys a unit, the wife will have expenses of about $230 per week. She earns $65 per week, which must be deducted from that figure. That would leave the wife with a shortfall of $165 per week or $8,580 per year. Assuming that the wife might be entitled to spousal maintenance for the next four years, when the husband could be expected to retire, the maximum amount that the wife could expect to receive for spousal maintenance would be four times $8,580, or $34,320.
The wife’s share of the asset pool is $377,465. If she does not buy out the husband, she will retain non-cash assets with a value of $64,963, leaving her with $312,502. If $34,320 of that is used for her weekly living expenses over the next four years, she will have $278,182 to use to buy a home. No evidence was given of the price of units and townhouses in M and the surrounding area. However, on the basis that the family home is worth $345,000, I daresay that there are smaller homes in the broader area suitable for a single person that could be bought for about $250,000. That would leave about $30,000 for the legal expenses of these proceedings, stamp duty and so on.
I also note that the assets to be retained by the wife include $6,000 of AMP shares. They could be realised if need be. The wife is also expected to receive about $36,000 from the life insurance policies in 2011.
This is not a case where the property settlement is insufficient to meet the wife’s future needs. In these circumstances, I am unable to conclude that the wife has a present need for spousal maintenance. Accordingly, the spousal maintenance application will be dismissed.
Costs
The wife sought orders that the husband pay the wife’s costs thrown away of the proceedings on 17 June 2008, when the husband was not ready to proceed with the final hearing. The matter had actually been listed for final hearing on 16 June 2008. Both parties appeared on that day without representation. The husband said he wanted an adjournment to obtain legal assistance, in circumstances where his solicitors had filed a notice of ceasing to act on 27 May 2008, that is, about three weeks before the trial. The husband explained that the individual solicitor he had been dealing with had his last day with the firm on 16 June 2008, and the remaining solicitors asked for money on trust to conduct the proceeding. The husband evidently declined to put them in funds. The wife told the court on 16 June 2008 that she would be legally represented the following day.
The husband, even when he had been represented, had failed to disclose documents and failed to provide valuation evidence in relation to his business, contrary to orders of the court. I formed the view that the husband was simply seeking to delay the resolution of the proceedings. He had property that could have been used to provide security for his legal expenses. The matter was adjourned to 17 June 2008 on the basis that the husband was to find lawyers who could effectively represent him the following day. On 17 June 2008, the husband appeared by counsel who sought a further adjournment, to enable him to read his brief. He told the court that he could not read it on the morning of 17 June 2008 because he had another matter that he was obliged to run. The matter was adjourned to 25 June 2008.
Section 117 of the Act provides that each party to proceedings under the Act should pay his or her own costs unless the court considers that the circumstances justify it ordering one party to pay some or all of the others’ costs. In considering that question, the court must have regard to the matters set out in s.117(2A), which provides as follows:
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
Following the property orders, the wife will have somewhat more than the husband by way of assets, but he will retain a substantially greater earning capacity for the next few years. It was not suggested that either party is in receipt of legal aid. The proceedings were not necessitated by either party failing to comply with previous orders. Neither party has been wholly unsuccessful in the proceedings. Nothing was put to the court about the rejection of reasonable settlement offers.
The question of costs in this case turns on the conduct of the parties in the litigation. The matter was commenced in November 2004 and has dragged on since then. One substantial delay was caused by the wife failing to appear. The proceeding was dismissed and the wife then had to apply to have the proceeding reinstated.
The husband’s failure to ensure that he had proper legal representation for 16 June 2008 led to the wife’s costs of 17 June 2008 being thrown away. I consider that the husband did not have a reasonable explanation for being unrepresented on 17 June 2008. He should have put his former solicitors into funds at the appropriate time. The husband also failed to comply with court orders concerning disclosure of his financial position. In all the circumstances and taking into account the relevant matters under s.117 of the Act, I consider that it is appropriate to order the husband to pay the wife’s costs thrown away on 17 June 2008. I will hear the parties on the amount.
I certify that the preceding one hundred and two (102) paragraphs are a true copy of the reasons for judgment of Riley FM
Associate: Sarah Hession
Date: 15 August 2008
5
4
1