Carruthers and Carruthers

[2017] FCCA 435

FEDERAL CIRCUIT COURT OF AUSTRALIA

CARRUTHERS & CARRUTHERS [2017] FCCA 435

Catchwords:
FAMILY LAW – Property – small asset pool – contributions.

Legislation:

Crimes (Administration of Sentence) Act 1999 (NSW), s.77

Family Law Act 1975, ss.75, 79

Cases cited:
Hickey v Hickey and the Attorney General for the Commonwealth of Australia (Intervenor) (2003) FLC 93-143
Bevan & Bevan [2013] FamCAFC 116
Stanford v Stanford (2012) HCA 52

Applicant: MS CARRUTHERS

Respondent: MR CARRUTHERS

File Number: WOC 312 of 2014

Judgment of: Judge Boyle

Hearing date: 24 November 2016

Date of Last Submission: 24 November 2016

Delivered at: Sydney

Delivered on: 10 March 2017

REPRESENTATION

Counsel for the Applicant: Mr Livingstone

Solicitors for the Applicant: Marsdens Law Group

Counsel for the Respondent: In person

THE COURT ORDERS BY CONSENT THAT

(1)That the Applicant Wife shall have sole parental responsibility for the child, X born (omitted) 2005.

(2)That the child live with the Applicant Wife.

(3)That the child spend time with the Respondent Husband on a supervised basis as agreed between the parties.

THE COURT ORDERS THAT

(4)These Orders are made by way of alteration of property interests pursuant to Section 79 of the Family Law Act 1975.

(5)That within 28 days of the date of these Orders the Respondent Husband sign all documents and do all things necessary to transfer to the Applicant Wife all his right title and interest in the former matrimonial home situate at and known as Property E, NSW (the “Property E property”) at the Applicant Wife's cost.

(6)That simultaneous with Order 5 above, the Applicant Wife and Respondent Husband sign all documents and do all things necessary to discharge the mortgage held over the property with the (omitted) Bank, and for the Applicant Wife to refinance the mortgage and loan over the Property M property into her sole name and at her expense.

(7)That the Respondent Husband retain the interest in the business trading as “(business omitted)” to the exclusion of the Applicant Wife, and indemnifies and will keep indemnified that Applicant Wife with respect to all outgoings and liabilities associated with said business.

(8)That the wife shall arrange for any items that form part of (business omitted) remaining in her possession to be made available for collection by the husband at his expense.

(9)That the wife shall transfer all right title and interest, including transfer of registration of the motor cycle currently registered in her name to the husband within 28 days.

(10)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 motor vehicles now in his/her respective possession or control.

(c)All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively.

(d)All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.

(11)Both the Husband and the Wife hereby release the other from all actions, proceedings, claims, demands, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing.

(12)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 1975 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.

IT IS NOTED that publication of this judgment under the pseudonym Carruthers & Carruthers is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT WOLLONGONG

WOC 312 of 2014

MS CARRUTHERS

Applicant

And

MR CARRUTHERS

Respondent

REASONS FOR JUDGMENT

1.The matter was listed for hearing with respect to both parenting and property.

2.The husband appeared by audio visual link from Wollongong Local Court, as he was in custody. The husband has various pending criminal matters. He has been charged with about 74 fraud matters.[1] He has also been charged with supply of prohibited drug and possessing a prohibited drug arising from events occurring on 2 July 2015. On 15 September 2016 he was charged with two offences of entering closed lands without lawful excuse, and dishonestly obtaining property by deception.

[1] Husband’s affidavit filed 17 October 2016, Annexure C.

3.The husband indicated he was arrested a few days prior to the final hearing on further fraud matters relating to use of a fuel card. Some of his criminal matters are before the District Court on 3 March 2017. His evidence is that it will take some time for his various criminal matters to be resolved, and that he may be incarcerated as a consequence of those matters.

Parenting

4.The husband agreed that the current interim orders with respect to X should be made on a final basis. These provide for her mother to have sole parental responsibility for her, for X to live with her mother, and for the father to spend time with her on a supervised basis as agreed. He accepts that he is currently not in a position to seek different orders with respect to X. Once all his criminal matters have been finalised he will be in a better position to consider whether other arrangements might be appropriate for X.

Property

5.The property hearing proceeded. The husband did not wish to cross-examine the wife. He was briefly cross-examined.

The Evidence

6.The wife relies on an amended application filed 1 October 2014, financial statement filed 1 October 2014 and her affidavits filed 3 June 2014, 1 October 2014, 2 December 2014, 12 October 2015, 23 October 2015, 20 January 2016, 18 April 2016.

7.The husband sought the orders in the amended response filed 3 December 2014. In support of his application he relied on an affidavit sworn 17 October 2016, and a financial statement of the same date. The husband’s affidavit referred to various other affidavits previously filed by him in these proceedings, being affidavits dated 1 May 2014, 16 June 2014, 2 December 2014, 23 October 2015 and 1 April 2016, and I have also had regard to that material.

8.Much of the material filed by both the parties goes to the parenting matter, which I have had regard to as part of the background to this matter.

Issues

9.The wife seeks to retain the home where she and X live, and that the parties otherwise retain the assets in their possession. This is a percentage based division of about 90%. The husband seeks a division of about 40%.

10.There are limited disputes in this matter. The parties disagree on the value of the (omitted) business. The wife puts the value at $25,000, and the husband at $10,000. The relative contributions of the parties are also in issue.

Background

11.At the time the parties commenced cohabitation in (omitted) 2004 the wife owned two properties, Property C and Property M. Initially the parties lived together at the Property C property, and Property M was used as an investment property. They moved to reside at Property M after X’s birth.

12.The wife had 2 older children, now adults, who resided at times with the parties. The husband does not assert any contribution to the care of those children.

13.The husband did some work on the Property M property, removing carpet for timber floors. The wife continued to meet the mortgages on both properties.

14.The parties married on (omitted) 2005, and their daughter X was born on (omitted) 2005. The parties purchased the former matrimonial home at Property E, in mid-2007 for $340,000.

15.The wife sold both the Property C and Property M properties. She contributed $223,835 towards the purchase of the former matrimonial home which represents about 65% of the purchase price.

16.Funds from the sale were also used to purchase a Nissan (omitted) for the husband at $22,000 and the business (business omitted) for $25,010.

17.On 16 October 2013 the parties separated on a final basis. The entire period of cohabitation was about nine years.

18.Following separation X remained living with her mother, and the father lived with his parents in (omitted).

19.The wife has been employed as a (occupation omitted) prior to the marriage, during the marriage and to date. The husband worked during the marriage variously in a (employer omitted), as a (occupation omitted), as a (occupation omitted), and self-employed (occupation omitted). He continued in the (omitted) business during the marriage, and for some period thereafter. The police fact sheet annexed to the husband’s affidavit[2] indicates that at 14 July 2015 he had a (omitted) business and earned $500 per week.

[2] Husband’s affidavit filed 17 October 2016, Annexure C, page 46.

20.The husband was in receipt of worker’s compensation at one point during the marriage, although the amount received, and the period covered, was unclear on the evidence.

21.The husband gave evidence that he was doing (omitted) jobs recently for his brother-in-law, as well as for another business, and was paid $200 per day in cash.  

The Balance Sheet

ASSETS
Ownership		Description	Wife’s value	Husband’s value
1	Joint	Property E	$529,000	Agreed
2	Husband	(business omitted)	$25,000	$10,000
3	Wife	Mitsubishi (omitted)	$6,000	Agreed
4	Husband	Land Rover	$10,000	Not Applicable
5	Husband (Registered in Wife’s name)	Motor Cycle	$3,500	Agreed
6	Joint	Household possessions	$15,000
Subtotal			$573,500	$563,500

ADDBACKS
Ownership	Description	Wife/de facto partner's value	Husband/de facto partner's value
Total		$ Nil	$ Nil

LIABILITIES
Ownership		Description	Wife/de facto partner's value	Husband/de facto partner's value
7	Joint	Mortgage – Property M	$152,000	Agreed
8	Wife	ATO Debt	$7,000	Agreed
9	Wife	Personal Loan	$10,000	Agreed
10	Wife	Marsdens Law Group Legal Fees	$60,000	Agreed
Total			$229,000	$229,000
Net Assets			$344,500	$344,500

SUPERANNUATION
Member		Name of Fund	Wife’s value	Husband’s value
11	Husband	Superannuation	$3,500	Agreed
12	Wife	(omitted) Super	$27,000	Agreed
Total			$30,500	$30,500

FINANCIAL RESOURCES
Ownership	Description	Wife's value	Husband’s values
Total		$ Nil	$ Nil

22.The only factual dispute between the parties is the current value of the (omitted) business. The husband’s financial statement puts it at $10,000; the wife at $25,000. No valuation evidence is provided by either party in support of their positions. This is understandable given the modest amount involved.

23.The husband has continued to operate the business, which provided him with an income during the marriage, and after. There is no evidence that the assets of the business have been disposed of, although the husband’s evidence is that one of the (omitted) equipment requires repair. I have no particular evidence about that. The assets of the business include a van, (equipment omitted). The evidence suggests a (equipment omitted) are at the former matrimonial home. The van and other items have been in the husband’s possession since separation.

24.I accept the wife’s valuation. The assets are still available, and the business is able to be operated if the husband chooses to do so.

25.The husband gave evidence that he retained the jeep following separation, and sold it for $3,000. He produced no evidence with respect to the sale. He retained the proceeds. The husband has had the use of the motor cycle, although it is still registered in the wife’s name.

26.There is no dispute with respect to the liabilities on the balance sheet. The wife has significant liabilities of $229,000. I accept that the net assets available for division between the parties are $375,000, including superannuation. The wife has superannuation entitlements of $27,000, and the husband $3,500.

The Law

27.Section 79 gives the Court the power to alter interests in property of the parties to the marriage. The court is required to conduct a four step process – to identify the pool of assets; assess the direct and indirect contributions; assess the s75(2) factors; consider whether the outcome is just and equitable.[3]

[3] Hickey v Hickey and the Attorney General for the Commonwealth of Australia (Intervenor) 2003 FLC 93-143.

28.The Full Court in Bevan[4] considered the High Court’s decision in Stanford[5]. The Full Court considered that the four step process:

merely illuminates the path to the ultimate result…is no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely, not to make an order unless is it just and equitable to do so.[6]

[4] [2013] FamCAFC 116.

[5] (2012) HCA 52.

[6] Bevan & Bevan [2013] FamCAFC 116, at paras 71 and 72.

29.The expression “just and equitable” has been explained thus:

The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.[7]

[7] Stanford v Stanford (2012) HCA 52 at para 36.

Contributions

30.The wife has made the overwhelming financial contribution at all stages of the marriage, including post separation. She came into the marriage with 2 properties, the sale of which generated about 65% of the money used to purchase the former matrimonial home. Without her contribution, the home could not have been purchased. Those funds also enabled the purchase of the business, which the husband has been able to operate since 2009.

31.The wife has been consistently employed as a (occupation omitted) and her income was utilised for the benefit of the family throughout the marriage. Prior to the purchase of the former matrimonial home she solely met the mortgage payments for her 2 properties. The parties had the benefit of living in those properties at different times, prior to the purchase of the former matrimonial home.

32.The wife has been solely responsible for the mortgage following separation.

33.The husband’s evidence is he regularly contributed $400 to $500 weekly towards the mortgage of the former matrimonial home, and bills. His income varied through different jobs. At times he was unemployed, and at one time on worker’s compensation. His financial contribution fluctuated, requiring the parties to rely on the wife’s income to meet expenses.

34.I accept that the husband made some improvements to the former matrimonial home. He referred to putting in a new oven, and digging a trench. Otherwise he said that he did work around the house, although he “couldn’t tell you when or on what day”.

35.The mother was the primary carer for X throughout the marriage, although the husband was an involved parent.

36.Following separation X lived in a week about arrangement for approximately 7 months. This was not successful: X had a significant number of absences from school whilst in the husband’s care. Interim orders were made on 9 December 2014 for the child to live with the wife, and spend time with the husband each weekend.

37.A provisional Apprehended Violence Order was issued for the protection of the wife on 5 August 2014. From early 2015, the husband’s time with X decreased. He has not spent regular time with her since 9 May 2015.

38.The husband was placed on remand in July 2015 for about 6 months. He was again gaoled for breach of bail conditions for a month from October 2016. During these periods he did not contribute at all.

39.Looking at the issue of contribution overall, I find the wife’s contribution based entitlement at 75%.

Section 75(2) Factors

40.The wife is 48 years old, and in reasonable health. The husband is 43 years old, and in reasonable health. The wife has been employed as a (occupation omitted) throughout her working life. She earns a modest income which has increased little over the years.

41.The husband has been employed variously as a (occupations omitted). The (omitted) business is still available to him. It is unclear what work he may undertake in the future. Notwithstanding his involvement with the Police at times, he has found employment to date.

42.The husband has been residing with his mother and can live there for the foreseeable future. He has the assets of the (omitted) business stored at her home.

43.The wife has the full-time care of X, who is 11 years old. The husband makes no contribution to child support. It is unclear when, or if, he may be in a position to do so. The responsibility for X will fall entirely to the wife.

44.Considering the parties’ future needs I find that there should be a 10% adjustment to the wife.

Just and equitable considerations

45.The final step in determining property matters is to stand back and consider whether the proposed result is just and equitable. In this case, the pool of assets is small: $344,000 is available for distribution. The parties are of an age where their superannuation entitlements, modest as they are, are not accessible for many years. The wife has a mortgage of $152,000 to service. Additionally she has various debts, including $60,000 in legal fees. The wife’s total liabilities are $229,000.

46.Considering what is just and equitable, the wife should be able to retain the former matrimonial home to provide accommodation for herself and X, without incurring further debt. This requires a further 5% adjustment in her favour.

47.The husband will retain the (omitted) business, the motor cycle and his superannuation which represents about 10% of the total pool of assets.

48.For all these reasons I make the orders set out at the beginning of this judgment.

I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of Judge Boyle

Date:  10 March 2017