Cato and Cato

[2018] FCCA 2771

FEDERAL CIRCUIT COURT OF AUSTRALIA

CATO & CATO [2018] FCCA 2771

Catchwords:
FAMILY LAW – Property – contributions.

Legislation:

Family Law Act 1975 (Cth)

Stanford & Stanford (2012) FLC 93-518

Applicant: MR CATO

Respondent: MS CATO

File Number: LNC 153 of 2017

Judgment of: Judge McGuire

Hearing date: 15 March 2018

Date of Last Submission: 15 March 2018

Delivered at: Burnie

Delivered on: 15 March 2018

REPRESENTATION

Counsel for the Applicant: Mr M Turnbull

Solicitors for the Applicant: Rae & Partners (Devonport)

Counsel for the Respondent: Mr J Petersen

Solicitors for the Respondent: Petersen Legal

ORDERS

1. That the net tangible assets of the parties will be divided as to 60 per cent to the wife and 40 per cent to the husband.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT LAUNCESTON

LNC 153 of 2017

MR CATO

Applicant

And

MS CATO

Respondent

REASONS FOR JUDGMENT

1. In the matter of Cato & Cato, I have left for my determination in this matter the application for alteration of property interest between the parties.  When the applications came on for trial, there were live issues in respect of the parties’ two children, [X], who is eight years of age, and [Y], who is six years of age.  To the great credit of these parents, they have, with the assistance of their legal representatives reached a consensus in respect of [X] and [Y], and I will be making those orders later today together with the property orders.

2. The financial matters remains alive.  As far as I understand it, despite some movement, not unusually, from the commencement of the proceedings or the filing of affidavits and case summary documents, is that the respondent wife proposes an order whereby she receives conditionally, 70 per cent of the net property pool and I take that to be inclusive of superannuation.  I say conditionally and I will come to that in a moment.  The position of the husband, as I understand it, is that the wife receives some small adjustment, perhaps of five per cent and, I think, at the stage of final submissions that the tangible assets of the parties be divided as to 55 per cent to the wife and 45 per cent to the husband with an equal distribution of their superannuation entitlements to achieve equality.

3. Matters of property settlement are provided for in section 79 of the Family Law Act. Section 79(2) directs that I am firstly to make a determination as to whether it is just and equitable in any event to make any orders altering the property interests of the parties. And following the well-known decision in Stanford & Stanford[1], in this matter I have no doubt that these parties have separated after commencing a relationship as long ago as 2002 and where they jointly hold property both legally and in equity. I am therefore not troubled at all in determining that there should be an alteration of their property interests.

   [1] (2012) FLC 93-518

4. That being the case, I must follow a course of consideration which firstly has me to identify the property pool and the assets, liabilities, financial resources and superannuation entitlements which make up that pool, and for these purposes, superannuation interests are to be treated as property.

5. There is an issue that remains for my determination and that involves an advancement by the husband’s mother in 2005 to the husband of an amount of $80,000. That assumes some significance in a pool which will have a net value of anywhere between $150,000 and $230,000, dependent upon my findings.  The husband gave evidence in this matter consistent with the advancement being a loan and with him retaining a residual obligation to his mother in repayment of that loan.  The husband’s mother, Ms J, filed two affidavits, she gave evidence and was cross-examined.  She steadfastly maintained that the advancement was a loan requiring repayment.

6. These are difficult issues of loans and/or gifts, intra-family difficulties which often confront Courts and where the Courts are regularly required to make determinations of credit as between the parties.  That is the case here where the wife’s position, if I can understand it, is one based primarily on her suspicion that the arrangements between mother and son were such that it is only relatively late in the day and indeed when the parties separated and these court applications became reality that suddenly the mother and son have determined that this advancement was a loan.

7. The wife considers the advancement to have been a gift with no indication of it ever having been required to be repaid or any repayments sought.  As counsel for the husband assisted me, the authorities generally are of little assistance except to state that trial judges are to treat each factual platform on its circumstances and consider the circumstantial evidence and the nature of the transactions.  In this matter there are indeed a number of indicators contrary to this advancement being a loan.

8. Firstly, there are no documents that evidence the loan; secondly, there is no document which evidences any demand for repayment; thirdly, there is no evidence of any repayment and within the context of the moneys being advanced some 12 or 13 years ago; fourthly, there is no evidence of certainty in respect of the advancement as to any terms of repayment or interest rate.  All of those factors might argue generally against this being a loan.  To the contrary, as I have already indicated, the relevant witness, Ms J gave evidence.  She was cross-examined, at times vigorously, and she steadfastly maintained that the advancement to her son was a loan, necessitating a repayment and that she required repayment.

9. What is persuasive in this matter in the circumstances of this particular matter, in my view, is that the evidence of Mrs J is one of propensity or tendency to make advancements. She is clearly a woman of some considerable wealth. She is able to make advancements to her children and she has evidenced and was cross-examined and her evidence remained again steadfast that she has over a number of years made advancements to her children, particularly those by the names of Mr M and Ms S I think, and that she has required repayments of those moneys and indeed repayments have been made, at times in whole, at times in part.

10. I found Mrs J to be an impressive witness and her evidence certainly had the ring of truth and I was alert to the nature of her evidence as to whether or not there was any collusion between her and her son. I did not detect any.  I am of the view that Mrs J did advance the moneys to her son and that she considered it to be a loan. She still considers the moneys to be a loan and in the sense that she has also provided moneys to her other two children, on the balance of probabilities I am satisfied that the $80,000 was provided to the husband as a loan and it remains repayable and is therefore a liability of the marriage.

11. That leaves the property pool, which is otherwise agreed, with a net value of $152,254 and I am grateful for the counsel providing me with an aide-memoir accordingly.  Having established the contents of the property pool and the value of the pool, I am then to determine the contributions of the parties to the obtaining improvement and maintenance of the property pool.  Contributions can be, for my consideration, of many and varied type. They include direct financial contributions, indirect financial contributions and non-financial contributions, including as homemaker and parent.

12. Not unusually in a relationship of this duration there have been many and varied contributions by these parties.  Having heard the evidence, however, I am of the view that a standout contribution has been both the superior and consistently superior contribution of the wife towards this family unit.  The wife has been in employment virtually throughout the relationship, save and except at some short periods following the birth of the children, and even during such times she made accommodations for the financial support of the family.

13. To contrary, the husband’s employment, whilst not perhaps being properly described as sporadic, has been varied in its nature and in its financial benefit to the family.  There have been some periods of unemployment. There have been periods of training and retraining and, generally, the husband’s direct financial input has been much less and less consistent than that of the wife. 

14. There is an argument proffered on behalf of the wife that the husband has wasted, in the legal sense of the word, the value of the property pool due to an ongoing issue with alcohol. On consideration since the raising of that issue and having heard the evidence of both of the parties, I am of the view that there is some merit to that argument, albeit of fairly minimal impact, and that is something I take into account.  This is a situation where the husband has habitually used alcohol during the course of the relationship.  I note for the purposes of these reasons that a first reading of the wife’s material suggested that she might have been running what is colloquially known as a “Kennon” argument.  However, perhaps wisely and with the benefit of advice and consideration, that argument was not pursued.  Nevertheless I am of the view that where this family’s finances at times were stretched if not precarious and in circumstances where the wife was working hard to contribute on an unequal basis to the family unit support, that the husband’s regular expenditure on alcohol was an unnecessary luxury on his part and has had some impact generally on the parties’ financial position. As I say, it is not a matter on which I place any great weight but it is something to be brought into account.

15. The wife’s contributions also have continued to be superior post-separation.  She has generally had both the major actual and almost sole financial responsibility for the financial support of the children.  The husband’s contributions have been through minimal child support maintenance and other ad hoc payments which the wife generously agreed had been received.  Nevertheless, in that period since November 2016, which is now a period of some almost 18 months in my calculations, the wife has had a far more onerous and demonstrated responsibility for the financial care of the family.  I place little weight on any arguments as to the father’s work by way of renovations to the house. It is not an uncommon argument where affidavit material seems to highlight, to the exclusion of the other party, the efforts made by one or the other but where in reading those contributions are complemented by those of the other party.

16. This was a marriage of some lengthy duration and, in my view, both parties contributed actually, financially, by their efforts and their labours.  I do accept the submission made by Mr Turnbull for the husband that Courts must be careful not to be unduly impressed by the theatrics of submissions as to contributions by one or other of the parties.  This was a marriage where, on my summation, each of the parties made their contributions often as to the limits of their abilities but the fact remains that within this relationship, it was the wife who made the superior financial contributions.

17. On the basis of contributions, and I do take into account the limited extent of the property pool, I remain of the view that the wife’s superior contribution should be given some real and actual effect.  In all of those circumstances, on the basis of contributions alone I am of the view that there should be an adjustment to the wife of 10 per cent of the property pool.

18. I turn to the relevant section 75(2) factors.  The wife is a (occupation omitted).  As I have just indicated in these reasons, she has worked hard. She has worked consistently and been in full-time employment.  She has an income which, on my calculations, brings her in somewhere between $60,000 and $75,000 per annum.  The wife in her evidence volunteered some anticipated difficulties with that employment although I am unable to make any findings that her employment and income will be seriously impacted. I prefer that she is a very experienced and obviously capable proponent of her profession and is likely to continue in the workforce.

19. The husband’s position is more problematic.  He obtained his qualifications during the marriage and with the support both actually and financially of the wife.  He is obviously a man of some abilities. He has various certificates and degrees or parts of degrees or whatever you call them.  He currently occupies himself in his most recent venture as a (occupation omitted), carrying with him a certificate and a successful completion of his apprenticeship obtained during this relationship.

20. The husband’s financial statement discloses an income from his employment of somewhere around $600 per week gross.  On my calculations, given his admitted hourly rate of charging, he is working only somewhere around 14 or 15 hours per week. I do not see that being anywhere near the husband’s capacity for employment and it is his capacity for income earning exploits that interests me.  I am of the view generally that each of these parents has a similar capacity for employment.  I am told and I accept that by reason of agreement whatever orders I make that the wife will be retaining the former matrimonial home.  An argument was put but I am not sure whether it was pressed by Mr Turnbull that this is something I should take into account in respect to the section 75(2) factors where the husband will be required to re-enter the property market and will have the costs of stamp duty etc thereby giving the wife an advantage. I do not accept that argument.  There is no compulsion on the husband to purchase property.  He is currently in the rental market. He can stay in the rental market. The purchase of a home is not a matter of necessity and, indeed, it does not achieve a mention in the husband’s affidavit material.  The children’s orders that I am about to make will have the children living between their parents, but slightly more with their mother than with their father although in circumstances where each of these parents will be required to provide a similar commitment, accommodation and arrangements and financial support for these children.

21. In all of the circumstances I do not attend to make any further adjustment for either party on the basis of section 75(2) factors.

22. Therefore, there will be final orders whereby the wife receive 60% of the property pool and the husband receive 40%.

I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Date: 25 September 2018