CANTRELL & CANTRELL
[2015] FamCA 103
•27 February 2015
FAMILY COURT OF AUSTRALIA
| CANTRELL & CANTRELL | [2015] FamCA 103 |
| FAMILY LAW – PROPERTY SETTLEMENT – Discrete issues – where the parties agreed on certain orders, but could not agree on the distribution of the matrimonial assets – where at the commencement of the relationship the contributions of the parties, including contributions by the husband’s parents on his behalf, slightly favour the wife – where the wife provided the majority of care of the children and was the homemaker – where at the date of separation, the financial contributions overwhelmingly favour the husband – where the position the parties after separation requires a modest adjustment in favour of the husband – where, with the responsibility of the parties’ three children, the wife would have present difficulties in maintaining employment – where the husband has substantial superannuation and no superannuation split was sought by the parties – where there should be an adjustment in recognition of the disparity in income between the parties, which is significant, and the need for the wife to be available for the care and supervision of the children – where the wife has an interest in property not included as a matrimonial asset – where overall there should be an adjustment of current interests such that the husband receives 57 per cent of the total net asset pool and the wife 43 per cent |
| Family Law Act 1975 (Cth) ss 75, 79 |
| Stanford & Stanford (2012) 247 CLR 108 |
| APPLICANT: | Mr Cantrell |
| RESPONDENT: | Ms Cantrell |
| FILE NUMBER: | (P)NCC | 1636 | of | 2012 |
| DATE DELIVERED: | 27 February 2015 |
| PLACE DELIVERED: | Newcastle |
| PLACE HEARD: | Newcastle |
| JUDGMENT OF: | Cleary J |
| HEARING DATE: | 24 November 2014 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Boyd |
| SOLICITOR FOR THE APPLICANT: | Harris Wheeler |
| COUNSEL FOR THE RESPONDENT: | Mr Spurling |
| SOLICITOR FOR THE RESPONDENT: | Solari & Stock Lawyers |
Orders
The parties shall do all things necessary including executing all documents necessary to list for sale (with LJ Hooker C Town) and sell the property situate at and known as B Street, C Town, NSW by private treaty at the earliest possible date at a price to be agreed on between the parties and failing such agreement at a price to be determined by the President of the Real Estate Institute of New South Wales (or any successor of it) or his/her nominee and to disburse the proceeds of the said sale in the following manner and priority:
(a)Payments of agent’s commission and advertising expenses and legal expenses of the sale NOTING the parties agree to instruct D Pty Ltd;
(b)Discharge of the mortgage to Newcastle Permanent Building Society;
(c)Payment of costs incurred, if any, in relation to determination of value or selling price by the President of the Real Estate Institute of New South Wales or his/her nominee;
(d)The balance then remaining to be divided as to:
(i)66.5 per centum to the wife; and
(ii)33.5 per centum to the husband.
That in the event the property situate at and known as B Street, C Town, NSW, is listed for sale in accordance with Order 1 and is not sold by private treaty within a period of three months from the date of these Orders, then the parties forthwith do all acts and things necessary, including executing all documents necessary to cause the property to be sold by public auction at the earliest possible date at a reserve price to be agreed upon between the parties and failing such agreement, at a reserve price to be determined by the President of the Real Estate Institute of New South Wales (or any successor of it) or his/her nominee and to disburse the proceeds of the said sale in accordance with Order 1.
That the husband shall ensure that the home mortgage payments balance does not increase pending sale from the level identified at hearing.
That as between the parties, the Applicant Husband is hereby declared to be solely entitled to the motor vehicle 1 registration number … and the Applicant Husband shall indemnify and keep indemnified the Respondent Wife in relation to all liabilities in respect of the said motor vehicle, whenever and howsoever arising.
That as between the parties, the Respondent Wife is hereby declared to be solely entitled to the motor vehicle 2 and the Respondent Wife shall indemnify and keep indemnified the Applicant Husband in relation to all liabilities in respect of the said motor vehicle, whenever and howsoever arising.
That the husband shall do all things and sign all documents to assign his interest in the account of the Newcastle Permanent Building Society to the wife.
That the wife shall transfer to the husband her interest in the E Town Time-Share and the husband shall indemnify and keep indemnified the wife in relation to all liability for outstanding fees.
That in the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
That as between the Husband and Wife, and subject to the above Orders, the Husband and Wife shall each respectively retain all interest in and entitlement to:
(a)All personal property now in his/her respective possession or control;
(b)All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively;
(c)All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cantrell & Cantrell has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT NEWCASTLE |
FILE NUMBER: (P)NCC1636 of 2012
| Mr Cantrell |
Applicant
And
| Ms Cantrell |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter came before the Court for four days of final hearing in relation to parenting and property orders commencing 24 November 2014.
After lengthy negotiations the parties reached agreement in relation to parenting orders for their three children aged nine, seven and four. The outcome was a deferral for five years of the proposed relocation to Sydney of the wife with the children. Orders were made by consent of the parties but not the Independent Children’s Lawyer (“ICL”).
On 26 November 2014 the parties then moved on to consider an adjustment of interests in property. Perhaps because the parenting orders consented to were very different from the outcomes sought by either of them, the parties were unable to reach an agreement about the matrimonial assets.
Certain orders were agreed on[1], including the sale of the former matrimonial home.
[1] Exhibit 4
There was limited information in the affidavits of the parties in relation to the financial history of the marriage. The parties had been focused on their children.[2]
[2] Husband’s Affidavit filed 23/10/2014, pars 24-32 and 56-71; and Wife’s Affidavit filed 28/10/2014, pars 96-118
The joint balance sheet[3] revealed net assets of approximately $400,000, of which $170,000 was superannuation interests.
[3] Exhibit 1
The parties were briefly cross examined and submissions made.
I reserved my decision.
Chronology of Relevant Events
The husband is 39 years of age and the wife is 42.
The parties met in Sydney in 1999. They began a personal relationship.
The husband was a medical professional living in staff accommodation at F Hospital. The wife was living with her parents in the southern suburbs of Sydney and working nearby.
In September 2002 the husband moved to Newcastle for professional employment in a hospital.
In 2002 the parties married but the wife remained living and working in Sydney.
In March 2003 the wife moved to Newcastle to join the husband. The wife did not work outside the home thereafter.
The wife moved reluctantly and subject to a condition which the husband accepted; that the couple would travel to Sydney each weekend and stay with her family in the southern suburbs of Sydney. For the following eight years, that is what happened.
In March 2003 the parties bought a property in Suburb G, a suburb of Newcastle (“the Suburb G property”). It became the first family home.
In 2005 the parties’ first child was born.
In 2007 the parties bought a parcel of land in C Town. They later built the matrimonial home on the land, and moved there to live (“the C Town Property”).
In 2007 the parties’ second child was born.
In 2010 the parties’ third child was born. He was subsequently diagnosed with dyspraxia. He also has a speech delay.
In May 2011 the husband left the matrimonial home, initially intending to take the youngest child with him. An argument over a specific matter in relation to that child had precipitated his leaving. Police were called.
The parties separated and have not lived together since. The wife and children remained living in the matrimonial home, continuing to spend most weekends in Sydney over the following three and a half years. The children spent very little time with the father.
The husband has lived with his parents in their home near Newcastle since separation.
The father briefly experienced mental illness following separation and had an overnight stay in hospital in July 2011.
On 19 October 2011 a psychiatrist[4] interpreted the discharge summary from the hospital as the father having an “anxious dissociative state”. That brief illness is now fully resolved.
[4]Husband’s Affidavit filed 21/06/2012, Annexure A
In June 2012 the husband commenced proceedings in the Federal Magistrates Court (the Federal Circuit Court as it is now known) in respect of property and parenting.
In August 2012 Orders were made for the sale of the Suburb G property. Although not explicitly stated in the parties’ affidavits, the property had apparently been leased after the parties moved to the C Town property.
On 12 November 2012 the Suburb G property was sold for $295,000. The net sale proceeds of $113,148 were applied to reduction of the two mortgages on the C Town property.
On 1 July 2013 there was an unsuccessful Conciliation Conference. The proceedings were then transferred to this Court.
In August 2013 allegations were made by the wife that the husband had physically assaulted the oldest child.
On 22 November 2013 orders by consent were made for supervised visits to resume between the children and the father
On 11 March 2014 the father was found not guilty of the alleged assault.
On 28 May 2014 orders were made by consent for unsupervised visits to commence.
The proceedings came before me on 24 November 2014, with four days of hearing allocated.
The Evidence
Husband’s documents:
(a)Amended Initiating Application filed 17 September 2014;
(b)Affidavit of the husband filed 23 October 2014;
(c)Financial Statement filed 26 November 2012;
(d)Financial Questionnaire filed 24 October 2014;
(e)Affidavit of the husband’s father filed 23 October 2014;
(f)Affidavit of the husband’s mother filed 23 October 2014.
Wife’s documents:
(a)Second Amended Response to Initiating Application filed 9 October 2014;
(b)Affidavit of the wife filed 28 October 2014;
(c)Financial Statement filed 27 October 2014;
(d)Financial Questionnaire filed 27 June 2013;
(e)Affidavit of the wife’s mother filed 27 October 2014.
The Law
In considering applications for alteration of property interests and transfer of property the court must:
(i)Identify the existing legal and equitable interests of the parties in property;[5]
(ii)Consider whether it would be just and equitable in the particular circumstances to make an alteration;
(iii)
If an alteration should be made, to consider the matters contained in
s 79(4) and s 75(2) of the Family Law Act 1975 (Cth) (“the Act”) in coming to an adjustment; and
(iv)Analyse and consider whether the adjustment under consideration would be just and equitable.
[5] Stanford & Stanford (2012) 247 CLR 108
Interests of the Parties
The net asset pool of the parties as at date of hearing is as follows:
Assets
B Street, C Town (Joint) $410,000.00
Parties joint CBA a/c $82.00
Husband’s GNPBS a/c $3,700.00
Wife’s car $14,400.00
Husband’s car $3,000.00
Parties’ joint interest in E Town time-share $15,000.00
$446,182.00
Liabilities
Mortgages (NPBS) $204,278.00
Charges due on time-share $8,448.00
$212,726.00
Net equity in non-super assets $233,456.00
Superannuation
Wife’s AMP fund $21,171.00
Husband’s First State fund $149,579.00
$170,750.00
The net asset pool is adjusted in one respect. The parties now agree that the matrimonial home should be sold. Accordingly, provision for sale costs has been made in the sum of $10,000.
The adjusted net asset pool is as follows:
Assets
B Street, C Town $410,000.00
Parties joint CBA a/c $82.00
Husband’s GNPBS a/c $3,700.00
Wife’s car $14,400.00
Husband’s car $3,000.00
Parties’ joint interest in E Town time-share $15,000.00
$446,182.00
Liabilities
Mortgages (NPBS) $204,278.00
Charges due on time-share $8,448.00
$212,726.00
Net equity in non-super assets $233,456.00
Superannuation
Wife’s AMP fund $21,171.00
Husband’s First State fund $149,579.00
$170,750.00
TOTAL $404,206.00
Less estimated sale costs $10,000.00
Grand Total $394,206.00
Would it be just and equitable to adjust interests?
The parties agree that their jointly owned property should be sold and proceeds divided to enable each to establish separate residences suitable for the children.
Contributions (s 79(4))
Initial Contributions
When the parties met in their mid- twenties they had the following assets.
The Husband
The husband had a five year old Japanese car, three parcels of shares and a fridge, freezer and washing machine which may have been wedding presents from his family.
The Wife
The wife had a half share with her sister in an apartment in Suburb H, a southern suburb of Sydney (“the Suburb H Property”). Rental income generated by that property was applied to the mortgage. I am unaware of the purchase price of that property, the date of purchase and the value at the date of marriage or the present hearing. The husband gave an estimate of present value of $500,000.
Throughout the marriage that property was leased and rental payments directed to the mortgage secured on it. The wife retains that interest. The husband presented his case on the firm basis that the interest of the wife in that property was not to be brought into account as an asset.
The wife asserts that she also had “some savings”, without quantification.
The Purchase of the Parties’ First Home in Suburb G
The wife asserts that $25,000 of her pre-marital savings was applied to the purchase of the parties’ first home at Suburb G. She was not challenged on that assertion and so I accept her evidence.
The husband’s mother asserted that in March 2003, she contributed $11,100 to the purchase of the property as a 5 per cent deposit.[6]
[6] Affidavit of the husband’s mother filed 23/10/2014, par 3
The husband’s father asserted that he attended with the parties at the Newcastle Permanent Building Society to assist with the mortgage application by acting as guarantor for the loan.
The wife denied any knowledge of either of those matters. However neither of the husband’s parents was cross-examined, so I accept their evidence.
Neither party referred to the purchase price of the Suburb G property. I infer from the deposit that the purchase price was $222,000 and that not less than $185,900 was borrowed by the parties and guaranteed by the husband’s father.
Assessment
At the commencement of the relationship the contributions of the parties, including contribution by the husband’s parents on his behalf, slightly favour the wife.
Contributions during the Marriage
Throughout the marriage the husband was employed with a high level of income which was applied to support of the family.
The wife contributed two amounts from the redraw facility she had on the Suburb H property. Approximately $15,000 was used for the purchase of a car for herself and $8,000 was used for landscaping on the C Town property.
There is no dispute that the wife provided the majority of care of the children and was the homemaker. The husband was engaged with the children and provided care and assistance for them outside work hours.
The Purchase of the Parties’ Second Home in C Town
The husband asserts that his three parcels of shares acquired prior to marriage were sold and realised $20,000, which was used in the purchase of land at C Town, from which the matrimonial home was built.
He was not challenged on this evidence, which I accept.
The husband says “In about 2007 we purchased the matrimonial home”.[7] I do not know whether this is a reference to the date of purchase of the land or the date of construction of the home.
[7] Husband’s Affidavit, par 29
There was no evidence from either party of the purchase price of the land at C Town or the cost of building the matrimonial home on that land.
It is apparent, however, that any balance of purchase price and/or construction costs were borrowed and secured by mortgage.
Gifts from Husband’s parents
There is unchallenged evidence that the husband’s parents jointly gifted a car purchased for $3,500 and not less than $9,000 in cash to the parties. In addition, the husband’s mother gave the parties not less than a further $25,000.
Assessment
At date of separation the financial contributions overwhelmingly favour the husband through his income, proceeds of sale of shares, and gifts from his family.
The wife made a greater contribution to the care of the children and to homemaking, but the husband was also involved in the care and activities of the children.
I also take into account the contribution of the husband to welfare in transporting the family, almost every weekend, to Sydney to enable the wife to enjoy time with her family and for the wife and children to participate in sporting and other activities in that local area.
The contributions during the marriage favour the husband in a ratio of 60/40.
Contributions after Separation in May 2011
The wife remained living in the former matrimonial home with the children following separation. The husband moved to live with his parents.
The wife withdrew from the parties’ joint account almost $13,000 in the three months post separation. Those monies were spent on the support of the wife and children and on a retaining wall on the Suburb G property.
The wife had apparently maintained a personal bank account with St George, which she retained on separation. Early in 2012 the wife withdrew $15,000 from that account to give to her mother to repay “money I have lent [her] over the years”.[8] There was no evidence about the balance in that account or the source of its funds.
[8] Affidavit of wife’s mother filed 27/10/2014, par 26
In November 2012 the property at Suburb G was sold.
For three years after separation, the husband continued to pay the mortgage loan rates, utilities, insurances, phone, private health insurance for the wife and children and the costs of the wife’s car.
After three years he ceased paying the car expenses, health insurance and phone, but maintained payment of the other expenses.
The husband paid child support, privately by agreement, and then after December 2011, as assessed by the Child Support Agency. In October 2014 he was paying $1,500 per month.
I accept that the husband has been unable to afford to live independently on account of his financial commitments to support the wife and children in the former matrimonial home.
Although not by the husband’s wish or preference, the great majority of care and supervision of the children has fallen on the wife.
Accordingly I conclude that the position of the parties relative to each other requires a modest adjustment in favour of the husband in a ratio of 65/35.
Adjustment Considerations (s 75(2))
The relevant matters to be taken into account are as follows.
Section 75(2)(a) – the age and state of health of each of the parties
The husband is 39 years of age and in good health. The wife is 42 and also in good health. Both have suffered some psychological distress over the difficulties arising from their separation almost four years ago.
Section 75(2)(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
The husband is a medical professional and has been so employed since late 2002 at a hospital in Newcastle. There is no evidence to suggest that he will not be able to go on working in the same or similar employment in the future. The husband has income of approximately $103,000.00 per annum gross.
The husband is living with his parents and other than a motor vehicle, he has no significant assets. He has superannuation which has more than doubled since separation.
The wife is not in paid employment. She is currently living in the former matrimonial home. Her total average weekly income of $1,112.00 is made up in three ways:
(a)Rent of $200.00 per week as her share of rental income from the Suburb H property - probably, although not certainly, applied to a mortgage secured on that property;
(b)Government benefits in the form of Family Tax Benefit A & B and a Family Supplement and Pension, a total of $581.00 a week;
(c)Child Support of $324.00 per week paid by the husband;
(d)A minimal amount by way of dividend on shares.
The wife has not been in the paid workforce since moving to Newcastle in 2003. The wife had been in paid employment for 10 years prior to that. She has been engaged in the full time care of the children and significant time is taken attending on relevant appointments for the parties’ youngest child due to his diagnosis of dyspraxia and speech delay. It is likely, and the husband fairly conceded as much in cross examination, that the wife would have present difficulties in maintaining employment particularly full time employment.
Section 75(2)(c) – whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
The children, by agreement, spend the majority of their time with the wife. At nine, seven and four years of age, there are many years in which they will require supervision and assistance. The children are to regularly spend weekend, holiday and other special time with the husband, but it is the wife who will have the day to day care for their education, extra-curricular activities, health and religious instruction.
Section 75(2)(f) – the eligibility of either party for a pension, allowance or benefit under any law of the Commonwealth, of a State or Territory or of another country or 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
The wife receives a Centrelink benefit as a supporting parent and family tax allowance.
Each of the parties has superannuation. The husband is an active contributor to his fund. The wife has not contributed to superannuation for
11 years.
Section 75(2)(g) – where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable
The parenting orders, agreed to by the parties, will require the wife to remain living in the Newcastle area for the next five years. It is her expressed intention to rent, although that may change. The wife and the children have been able to remain in the former matrimonial home. The husband has been unable to afford to live independently and has lived with his parents.
The net assets of the parties are modest and will in themselves provide inadequately for each party to establish a comparable household to that which the children were used to.
Section 75(2)(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
The marriage between the parties endured for eight to nine years. There are three children, one of whom has physical and learning difficulties. The wife gave up paid employment after marriage and moved away from Sydney to the Newcastle area to support the husband in his choice of employment there. The wife has been affected in her earning capacity through absence from the work force for 11 years.
Section 75(2)(l) – the need to protect a party who wishes to continue that party's role as a parent
The wife wishes to continue her role as carer of the three children to support them in their education, sporting and other activities. The husband fairly conceded that the wife is a good and attentive mother to the children, despite reservations about her recognition of their relationship with him.
Section 75(2)(na) – any child support under the Child Support (Assessment) Act 1989(Cth) 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 husband pays child support, presently about $1,500.00 per month, and has paid child support consistently as agreed or assessed since separation.
Section 75(2)(o) – any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
The assets of the parties are modest. The major assets are the net equity in the former matrimonial home, approximately $195,000.00, and the husband’s superannuation fund of $149,579.00.
Neither party sought a superannuation split and their positions were unchanged after I raised the matter in submissions. Superannuation was accrued by the husband during the marriage to $88,707.00, as at the date of separation.[9] The balance of the fund was accrued post separation.
[9] Exhibit 1
A split of the husband’s superannuation fund would have produced a somewhat more equitable outcome in terms of access to cash. The financial position of the husband is such that he requires access to funds to establish his own home where the children can stay with him.
However the husband has a capacity to borrow and the wife has a need for funds for rent and setting up another home.
Conclusion
Accordingly, there should be an adjustment in recognition of the disparity in income between the parties which is significant and the need for the wife to be available for the care and supervision of the children over the next 10 to 15 years. The husband has the capacity to earn income at a level which will enable him to repay a mortgage as well as to meet not only the child support payments, but the expenses of the children when they are with him.
The wife has an interest in a property at Sydney, shared equally with her sister. She has drawn on that interest to raise funds for her legal costs in the order of $100,000.00. Whilst the husband’s case was that the wife’s interest in that property should not be included as an asset, nevertheless it is a resource on which the wife can draw and the justice and equity of the parties’ situation requires acknowledgment of that resource, although it must be in a general way given the lack of evidence about the value of the property and the equity which the wife has in it.
Taking those factors into account there should be an adjustment in favour of the wife reflecting the significance of the income disparity and taking into account the resource available to the wife.
Overall the outcomes should be an adjustment of current interests such that the husband receives 57 per cent of the total net asset pool and the wife 43 per cent. The net asset pool is $394,206.00.
The wife will retain the following items:
a)Kia motor vehicle $14,400.00
b)Her own superannuation fund $21,171.00
c)The NPBS a/c $3,700.00
Total $39,271.00
Plus cash from the net proceeds of sale of the matrimonial home $130,237.00
Grand total$169,508.00
The husband will retain the following items:
d)His motor vehicle $3,000.00
e)His CBA account $82.00
f)The E Town Time Share, net of outstanding charges $6,552.00
g)His own superannuation fund $149,579.00
Total $159,213.00
Plus cash from the net proceeds of sale of the matrimonial home $65,484.00
Grand Total $224,697.00
The outcome leaves the husband with a fund for re-establishing independent accommodation. He also has outstanding legal costs
The wife will have a more substantial fund for rent and contingencies.
I make Orders accordingly.
I certify that the preceding one hundred and two (102) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cleary delivered on 27 February 2015.
Associate:
Date: 27 February 2015
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Property Law
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