Cassidy and Cassidy
[2012] FMCAfam 305
•4 April 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CASSIDY & CASSIDY | [2012] FMCAfam 305 |
| FAMILY LAW – Property – small asset pool – whether “negative” asset pool – contributions of the parties – whether amount drawn down for legal costs should be added back – just and equitable – balance of sale price of former matrimonial home. |
| Family Law Act 1975, ss.75, 79 |
| Re NHC and RCH (2004) FLC 93-204 Cassidy & Cassidy [2012] FMCAfam 270 Gollings & Scott [2007] FamCA 397; (2007) FLC 93-319 In the Marriage of Hickey [2003] FamCA 395; (2003) 30 Fam LR 355; FLC 93-143 In the Marriage of W (1980) 6 Fam LR 538; FLC 90-872 |
| Applicant: | MR CASSIDY |
| Respondent: | MS CASSIDY |
| File Number: | SYC 5446 of 2007 |
| Judgment of: | Scarlett FM |
| Hearing dates: | 13-15 March 2012 |
| Date of Last Submission: | 15 March 2012 |
| Delivered at: | Sydney |
| Delivered on: | 4 April 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr Campton |
| Solicitors for the Applicant: | Caldwell Martin & Cox |
| Counsel for the Respondent: | Mr Lee |
| Solicitors for the Respondent: | CBD Legal |
ORDERS
The husband is declared to be the sole legal and beneficial owner of all his right title and interest in:
(a)All cash at bank and moneys invested by him in his sole name;
(b)All furniture and personal effects in his possession;
(c)The Toyota motor car registered No. [omitted] in his possession;
(d)His shares in [omitted];
(e)The Rover and Land Rover motor vehicles in his possession; and
(f)Any superannuation entitlements received by the husband and invested by him or on his behalf.
The wife is declared to be the sole legal and beneficial owner of all her right title and interest in and to:
(a)All cash at bank and moneys invested by her in her sole name;
(b)All furniture and personal effects in her possession ;
(c)The Suzuki Vitara motor vehicle registered No. [omitted] in her possession;
(d)The Subaru Liberty motor vehicle (formerly registered No. [omitted]) in her possession;
(e)The Yamaha motor cycle in her possession; and
(f)Any superannuation entitlements received by the wife and invested by her or on her behalf.
The parties shall forthwith do all such acts and things as may be necessary to authorise and direct that the balance of sale proceeds of the former matrimonial home at Property E presently held in the trust account of Caldwell Martin and Cox Solicitors are to be divided and paid equally between the parties.
That unless otherwise specified in these Orders and except for the purpose of enforcing payment of any money due under these or any subsequent Orders, each party shall be solely entitled to the exclusion of the other both in law and in equity to:
(a)All property including choses in action in the possession of such party as at the date of this agreement; and
(b)All insurance policies in relation to which they are the life insured.
Each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled according to these Orders:
(a)The parties declare that they are not aware of any liability which either of them has which is a joint or several liability with the other including but without limiting the generality of the foregoing in respect of or pursuant to bank, credit or charge accounts, guarantees or as a result of any other parties’ previous business if any or other dealings;
(b)If it is subsequently found that any such liability as is described in paragraph (a) of this Order exists or arises, the party pursuant to whose business or other dealings such liability arose shall indemnify the other against any liability to contribute towards any claims, costs, demands, suits, actions, proceedings, orders or judgments whenever arising which may be made, brought against or incurred by the other party in respect thereof.
In the event that either party fails to sign any necessary documents or instruments or to do any acts required or contemplated by these Orders to be done, with such failure continuing for three (3) days, then the Registrar or a Deputy Registrar of the Federal Magistrates Court of Australia shall pursuant to section 106A of the Family Law Act 1975 have the power to execute any documents or instruments in the name of the person who has refused or neglected to sign any necessary document or instrument or to do any act required or contemplated by these Orders upon being satisfied of such failure by affidavit evidence.
IT IS NOTED that publication of this judgment under the pseudonym Cassidy & Cassidy is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 5446 of 2007
| MR CASSIDY |
Applicant
And
| MS CASSIDY |
Respondent
REASONS FOR JUDGMENT
Application
This is an application for the settlement of matrimonial property. The parenting issues between the parties have been finalised in a separate decision (Cassidy & Cassidy[1]) at the request of counsel for the Applicant husband, due to the need for parenting orders to be put in place at short notice.
[1] [2012] FMCAfam 270
The asset pool is a small one, and the only amount in contention is the sum of approximately $13,259.10, which is held in a controlled monies account. There are other assets, of little value, and it has been submitted that the husband is in a negative asset position whilst the wife is in a positive asset position.
Orders Sought
The husband seeks an order that the balance of the money should be divided equally between the parties. It is submitted for the wife that a sum of $69,700.00 should be added back into the asset pool, representing the amount of the parties’ assets spent by the husband on his personal legal expenses. Thus, the wife should receive the balance of the funds available.
Background
The relevant history is set out in the earlier decision (Cassidy & Cassidy[2]) at paragraphs [10] to [43]. The former matrimonial home has been sold. The parties have expended a considerable amount of money on legal expenses arising from their substantial litigation history.
[2] [2012] FMCAfam 270
The balance of proceeds of sale was placed in a controlled moneys account to be held by the Applicant’s solicitors, Messrs Caldwell Martin & Cox, to be held until the proceedings were finalised. On 11 March 2011 the Court ordered that:
Each party shall by close of business 14 March 2011 irrevocably authorise and direct in writing their respective solicitors to authorise Caldwell Martin Cox Solicitors of Suite 3, Level 1, 320
Camden Valley Way Narellan NSW to hold in trust the sum of $12,000.00 from the parties’ respective shares of the proceeds of any past and future sale of the property of the marriage for the purpose of payment of the fees to DR W for the preparation of his expert report, such payment to occur within 7 days of the date of receipt of DR W’ invoice by each party.
That order was varied on 15 November 2011, and again on 15 March 2012. The latter variation was to provide that the sum held on trust for Dr W should be increased to $18,500.00.
The Relevant Law
The way a court approaches property matters has been authoritatively set out by the Full Court of the Family Court in its decision In the Marriage of Hickey[3] at paragraph [39]:
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…[4]
[3] [2003] FamCA 395; (2003) 30 Fam LR 355; FLC 93-143
[4] [2003] FamCA 395; (2003) 30 Fam LR 355; FLC 93-143 per Nicholson CJ, Ellis and O’Ryan JJ at [39]
Evidence
The husband relied on his affidavit of 1 March 2012 and his Financial Statement of the same date.
The wife’s evidence at property matters was set out in her affidavit of 16 April 2010 and her Financial Statement of 12 March 2012.
The husband was briefly cross-examined by counsel for the wife.
Essentially, the husband’s evidence was that the former matrimonial home at Property E, was sold for $274,000.00. After payment of various expenses and discharging the mortgage, there remained a balance of $38,259.10. That amount was held in the trust account of the husband’s solicitors, Messrs Caldwell, Martin & Cox.
The husband deposed that the following amounts have been deducted from the amount held in trust:
a)the sum of $6,500.00 in satisfaction of a costs order made by the Court against the wife on 29 April 2010; and
b)the sum of $18,500.00 to meet the fees owing to Dr W for his single expert report.[5]
[5] Affidavit of Mr Cassidy 1.3.2012 at paragraph [131]
This left a balance of $13,259.10.
The husband deposed that, in addition to the liabilities set out in his financial statement, he was required to raise a further $32,000.00 to meet his legal expenses for the current proceedings.
The husband’s evidence was that, at the commencement of cohabitation and marriage, he had no liabilities. His assets were a bank account containing about $27,000.00, about 900 shares in [omitted], three old Rover motor cars in various stages of repair, a 1977 Land Rover and a superannuation entitlement with [omitted].
The husband deposed that he purchased the former matrimonial home at [E] for $135,000.00. He applied his savings of $27,000.00 odd and a gift of $7,000.00 from his parents towards the purchase of the home. His parents also provided an interest-free loan of $5,000.00 which was repaid.
The husband was employed on a full-time basis as a [omitted].
The wife worked on weekends as a [omitted]. She ceased paid employment in 2000 when she was pregnant with the parties’ first child, [X]. The husband deposed that the wife took on the role of “primary homemaker”.[6]
[6] Ibid at [143]
The husband stated that he owed an amount of $81,541.14 on the mortgage to the bank as at 5 May 2007, but drew down amounts totalling $69,674.00 to be applied to legal fees in respect of proceedings in this Court and in the Local Court. The husband further deposed that he also borrowed the sum of $22,000.00 by way of a personal loan from the ANZ bank and another $107,806.00 from his parents, all towards legal fees.
The husband had left the former matrimonial home in July 2007. From that date until May 2009 he continued to make payments on the mortgage. The wife and the children continued to live in the home. The wife vacated the home in December 2009 and arrangements were made for the home to be sold.
The husband deposed at paragraph [163] of his affidavit:
Whilst I acknowledge that the equity in the former matrimonial home significantly diminished after separation primarily as a result of legal fees incurred by me in family law proceedings I say that those expenses were reasonably and necessarily incurred by me and that action and/or inaction on the part of [Ms Cassidy] resulted in those fees being significantly higher than they ought to have been.[7]
[7] Affidavit of Mr Cassidy 1.3.2012 at [163]
The husband’s Financial Statement shows:
a)a total average weekly income of $1902.00;
b)total personal expenditure of the same amount;
c)personal property with an estimated value of $8630.00;
d)superannuation with a total gross value of $53,443.00;
e)liabilities of $128920.00; and
f)no financial resources.
The husband claims that the personal property includes a 1992 Subaru Liberty motor car in the possession of the wife. It is unregistered, but he estimates its value at $2,500.00.
The husband was cross-examined by counsel for the wife. He said that the amount of $107,806.00 that he borrowed from his parents was not covered by a signed loan agreement. He said that there was a piece of paper detailing every amount. He was also asked about the total amount of $69,674.00 that he had drawn down to cover his legal fees.
The husband admitted owning a 1977 model Land Rover and was unsure whether it was registered. He said he did not know its value. He denied ever owning a caravan.
The wife deposed in her affidavit of 16 April 2010 that when she separated from the husband in March 2007 she left the home at Property E with the children and moved into rental accommodation at [omitted]. The husband vacated the home in June of that year and she and the children moved back in.
The wife deposed that the husband had acquired a caravan (which he denied in cross-examination):
The applicant moved from the former matrimonial home in June 2007 into a caravan he purchased and placed on a mate’s property. This caravan is still on his parents’ property in [omitted]. This asset is not mentioned anywhere, and I would estimate be worth approximately $5,000-$10,000 or more as it held the applicant and the 3 children, and is a late model.[8]
[8] Affidavit of Ms Cassidy 16.4.2010 at paragraph [13]
In her Financial Statement filed on 12 March 2012, the wife sets out:
a)a total average weekly income of $810.00;
b)total personal expenditure of $20.00, made up of insurance premiums;
c)personal property with a value of $3868.00;
d)superannuation with an estimated total gross value of $1540.00;
e)liabilities totalling $800.00; and
f)no financial resources.
The wife was not cross-examined on financial matters.
The Parties’ Property
There is no agreement as to the asset pool. The parties’ evidence differs greatly and there was little by way of cross-examination. The asset pool appears to be:
a)The balance held in the controlled moneys account: $13259.10
b)Cash at bank (husband): $230.00
c)Cash at bank (wife) $268.00
d)Toyota motor car SGZ50S (husband) $1500.00
e)Subaru Liberty motor car unregistered (husband)[9] $2500.00
f)Land Rover[10] unregistered (husband) $400.00
g)Household contents (wife) $3500.00
h)Motor bike unregistered (wife)[11] $100.00
i)Superannuation (husband) $53443.00
j)Superannuation (wife) (estimated) $1540.00
TOTAL $76740.10
[9] But said to be in the possession of the wife
[10] Described as a “wreck”
[11] Described as “ready for scrap”
The wife’s superannuation figures are estimates and no valuations have been provided. The husband’s superannuation figures are accompanied by various account summaries and benefit statements, which give some indication of the value of the husband’s superannuation interests. It is for this reason that I do not propose to follow the submission of counsel for the husband that the superannuation should be treated as a financial resource.
As to the parties’ liabilities, I find that they are as follows:
a)ANZ Bank personal loan (husband) $17238.00
b)NAB Visa (husband) $1532.00
c)ANZ Visa (husband) $2344.00
d)Loan from Mr & Ms C (husband) $107806.00
e)Woolworths MasterCard (wife) $800.00
TOTAL LIABILITIES $129720.00
The financial details can only be regarded with some suspicion, as there has been very little testing of them, except for a rather brief cross-examination of the husband by counsel for the wife. For example, it is difficult the wife’s assertion in the Financial Summary in Part B of the Financial Statement that her total personal expenditure for the week amounts to only $20.00.
However, the Court must make do with what evidence it has.
It is clear that the liabilities outweigh the assets. There appears to be a debit of $52,980.00. Counsel for the wife submitted that the amount drawn down by the husband for legal fees, some $69674.00, should be added back. I am not persuaded that this should be done. I note the decision of the Full Court of the Family Court in Re NHC and RCH[12] to which the Court has been referred by counsel for the husband. The treatment of funds used to pay legal costs remains ultimately a matter for the trial judge. Even if I were so persuaded, the asset pool would only just go into credit, with a total of $16,694.00.
[12] (2004) FLC 93-204
I find that the net total of the parties’ assets and liabilities amounts to a negative figure of $52980.00.
It is extraordinary, as I put to counsel at the final hearing, that a property hearing should be argued over such a small amount of money.
The Parties’ Contributions
In my view, the contributions favour the husband. The husband provided the initial contributions towards the purchase of the home at Property E. His assets at the commencement of the marriage were an amount of $27,000.00 in a bank account, some motor vehicles (not particularly valuable), his superannuation with [omitted] and some shares with [omitted].
The wife had no assets. She was working as a [omitted] to earn money to pay her university fees.
The father’s parents also contributed to the purchase of the matrimonial home by way of a gift of approximately $7,000.00 and an interest free loan of approximately $5,000.00.[13]
[13] Affidavit of Mr Cassidy 1.3.2012 at [137]
The husband was the primary income earner during the marriage whilst the wife’s main contribution was as homemaker and mother to the parties’ children.
In my view the contributions over a marriage of just over six years favour the husband by 60% to 40%.
Matters to be taken into account under s.79(4)(d)-(g)
The orders proposed by the parties would not have any effect on the earning capacity of either party.
Subsection 79(4)(e) requires the Court to consider the matters referred to in subsection 75(2) so far as they are relevant.
The father was born [in] 1975, so he is 37 years old. He has had some health issues, including suffering from a stroke during the marriage.
The mother was born [in] 1977. She is 35 years of age. She is in good health.
Each party has the capacity to earn income.
The children will be living with the mother.
Neither party is near to retiring age and will therefore be unable to access their superannuation. The mother’s superannuation is nominal and that of the father, whilst greater, is relatively modest. Neither of them seeks a superannuation splitting order.
The father is paying child support assessed by the Child Support Agency.[14]
[14] s.75(2)(na)
It is relevant that the youngest child [Z] was hospitalised after an accident in which she suffered serious burns. She is living at home but needs ongoing treatment by way of wearing pressure garments and dressings and the application of sorbolene cream. She has to undergo regular physiotherapy.[15]
[15] Affidavit of Ms Cassidy 7.3.2012 at [40]-[41]
In my view, the fact that the wife has the responsibility for the children, especially [Z], who requires additional care, is sufficient to justify an adjustment of 10% in her favour.
Just and Equitable
Subsection 79(2) provides that the Court shall not make an order under s.79 unless it is satisfied that, in all the circumstances, it is just and equitable to make the order. It has been held that subsection 79(2) should be read together with subsection 79(4) and it is not a condition precedent to a consideration of s.79(4):
What is just and equitable depends on a proper consideration of the factors set out in s 79(4).[16]
[16] In the Marriage of W (1980) 6 Fam LR 538 at 549; FLC 90-872 per Nygh J
I have considered the matters in s.79(4) of the Act. In my view, the parties should retain the assets currently in their possession or standing in their names. As to the funds held in a controlled moneys account by the husband’s solicitors, that amount should be equally divided between the parties.
I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of Scarlett FM
Date: 4 April 2012
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