Chaikin and Gerhard

[2018] FCCA 3146

FEDERAL CIRCUIT COURT OF AUSTRALIA

CHAIKIN & GERHARD [2018] FCCA 3146

Catchwords:
FAMILY LAW – Property dispute – each party seeking a division 60/40 in their favour – court finding that both contributions and future needs are equal – property divided equally.

Legislation:

Family Law Act 1975

Cases cited:

Stanford v Stanford [2012] HCA 52

Applicant: MR CHAIKIN

Respondent: MS GERHARD

File Number: DGC 3057 of 2016

Judgment of: Judge Burchardt

Hearing dates: 12 & 13 September 2018

Date of Last Submission: 13 September 2018

Delivered at: Dandenong

Delivered on: 21 November 2018

REPRESENTATION

The Applicant: In person

Counsel for the Respondent: Mr Dunlop

Solicitors for the Respondent: VR Lawyers

ORDERS

1. The Wife pay to the Husband the sum of $128,000 (“the payment”) within 90 days of these orders. 

2. Contemporaneously with the whole of the payment being made:

   (a)The Husband do all acts and things and sign all necessary documents to transfer all of his right, title and interest in the real property known as and situate at Property A, Victoria (“the Property A property”) to the Wife, at the Wife’s expense (“the transfer”); and

   (b)The Wife discharge/refinance the mortgage encumbering the Property A property. 

3. In the event the whole of the payment is not made by the date, the parties do all acts and things and sign all necessary documents to forthwith effect a sale of the Property A property altogether out of Court (“the sale”) and upon settlement of the sale the proceeds be applied in the following manner and priority:

   (a)To pay all costs, commissions and expenses arising from the sale;

   (b)To discharge the mortgage encumbering the Property A property;

   (c)The balance then remaining to the Husband and Wife in the following proportions:

   (i)$128,000 to the Husband;

   (ii)The balance to the Wife.

4. In the event that the sale price of the Property A property is not $450,000, the amount to be paid to the Husband will be adjusted to reflect the relevant percentage of increase or decrease in the value of the property from $450,000.

5. Pending the payment being made or settlement of the sale, as the case may be:

   (a)The Wife have the sole use and exclusive occupation of the Property A property NOTING THAT this Order permits the Wife to lease the property and receive all rent payable;

   (b)The Wife pay all mortgage repayments, rates, taxes and outgoings in relation to the Property A property and indemnify the Husband in relation to same; and

   (c)The parties hold their respective interests in the Property A property on trust pursuant to these Orders.

6. To facilitate the sale of the Property A property:

   (a)The parties jointly appoint as exclusive selling agent as agreed in writing and failing agreement as nominated by the Real Estate Institute of Victoria or its nominee;

   (b)The selling method (private sale or public auction) and selling price be agreed by the parties in consultation with the selling agent; and

   (c)The parties otherwise have liberty to apply with respect to the terms and conditions of the sale.

7. Unless otherwise specified in these Orders and save for the purposes 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) in the possession of such party as at the date of these orders (the furniture, personal possessions, and like chattels in the Property A property being deemed to be in the possession of the Wife);

   (b)Monies standing to the credit of the parties in any joint bank account shall be withdrawn and distributed equally between the parties and the account/s closed thereafter;

   (c)Each party forego any claims they may have to any superannuation benefits belonging to or earned by the other;

   (d)Insurance policies remain the sole property of the owner named thereon;

   (e)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; and

   (f)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.

8. All extant property adjustment applications be otherwise dismissed.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

DGC 3057 of 2016

MR CHAIKIN

Applicant

And

MS GERHARD

Respondent

REASONS FOR JUDGMENT

Introductory

1. This is a property dispute in which the most substantial asset of the parties is the former matrimonial home.  In substance, each of the husband and the wife (as I shall refer to them notwithstanding their divorce) seek that they be allotted 60 per cent of the property pool and the other party 40 per cent.

2. In my view, each party tends to overemphasise the matters they think favour the result for which they contend.  For the reasons that follow,

   
   

   I am going to divide the matrimonial pool equally between the parties.

Agreed or Uncontroversial Facts

1. Much of the history of the matter is not the subject of significant dispute.  The husband was born on [date] 1974 and is a [occupation omitted].  The mother was born on [date] 1975 and is an [occupation omitted].  The parties met in 1998 in [country omitted] and ultimately married on [date] 2001.  Their child, [X], was born on [date] 2008.  The date of separation is in issue between the parties but, on any view of the matter, they had separated by 19 October 2012 (husband’s version) or 29 December 2011 (wife’s version).

2. The husband first came to Australia in 1999 and the wife came in 2001.  It is conceded that the wife was the primary carer for [X] until 2010 (although it seems she did some work in the intervening period before his birth) and that, thereafter, the wife took a series postings as an [occupation omitted] which took her away from the family home for a relatively lengthy periods of time.  The parties initially lived in Adelaide but moved to Melbourne in 2010.

3. The parties bought the former matrimonial home in Property A in 2012.  The purchase price of $300,000 was funded partly with savings and partly with a mortgage.  The mortgage amounts now, near as makes no difference, to $200,000.

4. It is conceded that following separation, the husband paid half the mortgage for a period of 2 years.

5. It is also not now the subject of dispute that in 2012 the wife contributed $25,000 to pay down the mortgage.  She redrew this sum in late 2012.

The Submissions and Evidence Given at Court

1. While I have, of course, had regard to the parties’ affidavits and have read them carefully, given the limited nature of the dispute between the parties, as things have transpired, it is more appropriate to concentrate on what was said at Court.  It should be noted that much of what was in the parties’ affidavits either related to parenting issues, which have now been resolved, or are set out in the agreed materials above.  What follows is taken from my notes.

The Evidence of the Husband

1. The husband adopted his affidavits and Financial Statement as true and correct.

2. Under cross-examination, the husband said he did not propose to include his credit card debts as part of the pool.  He conceded that he had made mortgage repayments post-separation.  He agreed that the wife put the date of separation as December 2011, whereas he said [date] 2012.  The wife had redrawn $23,000 from the mortgage in [date] 2012 and a further $2,000 in [date] 2012.  He did not know what had happened to this money.  He had not asked.  He said he had paid half the mortgage from 2012 to 2014.  He does not request the repayment of the $25,000 redraw.  He took the family car when separation took place.  He conceded that the wife had bought a Motor Vehicle 1, which he had seen thereafter, but he did not know its price.  He said the wife and Motor Vehicle 1 had had extensive travel overseas and in Australia.  The $25,000 was joint funds.  The funds were earned by the wife in 2011 to 2012 and were put onto the mortgage and then withdrawn.  The $25,000 no longer exists.  He had not included his credit card debts in the pool.  He paid the mortgage in the amounts of $1,000 to $1,200 a month and conceded he had paid approximately $10,000 after separation towards the mortgage.

3. At separation, his HECS debt was approximately $10,000 and the wife’s debt was about the same.  The wife’s is now paid off but his is not.  His HECS debt is now approximately $13,000 because he has not been able to make repayments.

4. The husband conceded that the wife had had a scholarship from the University in about 2005 to 2006.  She had not completed the degree.  There was a personal debt to the wife of $18,000.

5. The husband said that Suburb A was paid from joint funds.  He denied that the wife had provided all the funds to purchase.  He conceded that from 2010 the wife was an [occupation omitted] and was away half the time.  He said this was a personal choice made by her.  He was not working.  He conceded that the wife was still breastfeeding when she started work.  He said, on one occasion, he went as well and it was five star travel.  He had no issue with the wife keeping the property but does not want the matter to drag on.  Giving the wife 60 days to arrange finance was okay. 

6. There was no re-examination.

The Submissions and Evidence of the Wife

1. Counsel informed the Court that the wife wants to buy the husband out and wants up to four months to do so.  If the wife has already moved, as the parenting orders contemplate, this would affect the section 75(2) factors.  $90,000 represents a 60/40 adjustment in favour of the wife.  He tendered orders proposed which I have marked as MFI1.

2. The wife withdrew $25,000 from the mortgage account in 2012 but this came from her work.  The funds were used to buy her car.  It also paid for travel and filled in some gaps but there had been no wastage.  Counsel submitted that the husband’s Visa credit card debt should be included in the pool.  He conceded that the husband did pay half the mortgage in the sum of approximately $10,000 after separation.  The wife has paid off her $10,000 HECS debt.

3. The wife was called and adopted her affidavits and Financial Statement as true and correct.

4. The $44,000 savings in her Financial Statement was now largely gone.  She is not working much and stopped last November.  The $44,000 represented her earnings.  Her bank records were tendered as exhibit R1.

5. Under cross-examination, the wife conceded that the parties had separate bank accounts.  She said living expenses and travel were paid.  She conceded that the husband paid some of the kindergarten fees and food.  She denied collecting the entire tax benefit.  When the parties were separated under the same roof she was paying all the expenses and paid when the husband asked.  She said she paid travel, insurance, medical insurance, sports and activates for the child.  She said that separation took place at the end of 2011.  She paid the mortgage but the bank manager told her to pay into the mortgage account, which she did, but she then removed the funds.  She had not known that that account was accessible to the husband.

6. Most of the time after separation he called her.  There were some emails and texts exchanged.  The wife admitted the screenshot messages, tendered as exhibit A1, from [date] 2012, referring to bedroom use. 

7. The wife said that the husband came to Darwin with her to try and reconcile the relationship.  The day beforehand his family tried to stop the wife going.  She told them no way because the relationship was over.

8. The wife conceded attending a citizenship ceremony together in [date] 2012.  She said this was just for the sake of the public.  They were not living together.

9. The wife said that the husband took her jewellery and other possessions from her room in 2013.  She went to the police but they refused to assist with the matter because he was living in the house.  There had been a flood and she had told the husband where the spare key to her locked room was.  She was then in [country omitted].

10. In re-examination, the wife confirmed that no Child Support payments are owed.

11. In final submissions, counsel submitted that there is $250,000 worth of equity.  The cars of the parties should be excluded and there is no evidence to say who, if anyone, has any jewellery.  The $25,000 add backs should be excluded as there has been no wastage.  The wife clearly believed there had been separation in 2011 whatever the husband may have been told.

12. It was submitted that the scholarship owed by the wife should be included.  The husband does owe a HECS debt but that should be included in the pool because the wife has had a debt also.  The husband’s post-separation mortgage payments equalled the wife’s HECS debt.  The husband’s credit cards should be excluded from the pool.

13. The wife says her contributions are greater.  She got a job when the child was still being breastfed and was away from the child for the benefit of the parties.  This was demanding and difficult in its circumstances, being conducted in a [employer omitted].  The future earnings of the parties were likely to be equal.  There was likely to be an equal time regime when the mother moved closer to the child’s school and there should be no loading under section 75(2).

14. The husband submitted that he cared for the child when the wife was away.  He also had some part-time jobs.  Work as a [occupation omitted] is hard to find.  He has a new partner and a three year old son.  He sought settlement of the property now.

Stanford v Stanford

1. The Court’s first task is to ascertain the legal and equitable interests of the parties and determine whether it is just and equitable that there be a property adjustment.  Nonetheless, and as in so many cases, the basis upon which the parties conducted their financial affairs as a couple has radically altered and each of them seek a property adjustment.  It is plainly appropriate that there be one.

The Pool

1. The assets and liabilities of the pool are as follows:

   ·Matrimonial home agreed $450,000.

   Liabilities:

   ·Mortgage $200,000;

   ·Scholarship debt owed by the wife $18,000;

   ·HECS debt owed by the husband $13,000;

   ·Husband’s Visa credit card debt $11,000.

2. It should be noted that the superannuation of the parties is not exactly commensurate.  The husband’s being $66,668 (according to his Outline of Case document) and the wife’s being $59,000 (according to her Case Outline document).  Neither side has sought that superannuation be included in the pool and I will not do so.

3. I have not included the cars of either of the parties.  There is some minor disparity in valuation but, in substance, these are simply vehicles that take them from A to B.  To allot them a meaningful value in this set of circumstances is, in my view, inappropriate.

4. Likewise, I have not included an amount for jewellery.  Counsel for the wife is right to say that there is simply no compelling evidence as to how much, if any, there is and in whose possession it might be.

5. I accept the submission of counsel for the husband that the husband’s contributions to the mortgage are reasonably offset by the wife’s diminution of her HECS debt which would otherwise be required to be taken into consideration.

6. The scholarship debt owed by the wife and the HECS debt owed by the husband are plainly debts arising in the relationship and should be included (I note that the husband’s oral evidence was that his HECS debt was now some $13,000).

7. I have included half of the husband’s credit card debts.  It is his evidence that his credit card debts ballooned out in the period from 2012 to 2014 when he was making his contributions to the mortgage.  However, those contributions, at most, would have amounted to some $10,000 and to re-include them would, in any event, in my view, represent a double-dipping.  The reality is, however, that the husband has also re-partnered and much of his current financial difficulties must obtain from that fact.  Doing the best I can, I think it is reasonable to attribute $11,000 of the credit card debt to expenses run up prior separation.

Contribution

1. This was a relationship from 2001 until about 2011 or 2012.  The wife was the primary earner until 2010 and the husband for the next period onwards.  The wife obviously worked as best she could and was the primary carer of the child from his birth onwards.

2. Correspondingly, when the husband was looking after the child, plainly, he was the primary carer and the wife was the sole income-maker.

3. This is a case in which each of the parties have done their best and contributed, in my view, reasonably to the final position that the parties have achieved.  I accept that the wife’s work would have involved at least some postings which would have been conducted in less than particularly pleasant circumstances.  She spent quite a substantial amount of time in [country omitted] which would scarcely be anyone’s first holiday destination, in circumstances which may well have been arduous, to say the least.  This, no doubt, explains the relatively high rate of earnings she achieved.

4. It needs to be noted, however, that the wife only was away interpreting, for these purposes, from 2010 until 2011, on her case, or 2012, on the husband’s case so far as the subsistence of the relationship is concerned.  It does not, in my view, merit any adjustment.  In my view, while there is a flavour that the mother’s contribution may have been slightly greater, I think the contribution of the parties should be assessed as equal.

Future Needs

1. Both parties are in unremarkable health.  For all the reservations expressed in his first affidavit as to his future employability, which received an echo in his oral evidence, the fact is that the husband is still in employment five days per week.  In my view, he will continue to obtain work at least at the level of earnings that he presently has.

2. The wife will likewise, in my opinion, be able to work in due course.  I have no doubt that the wife will relatively rapidly relocate to be closer to the child’s school so that an equal time regime will be obtained.  She adores her child and, in my view, this outcome is inevitable.  This being so, I do not propose to address the matter on the footing that the current spend-time regime is still subsisting.  It is far more probable and otherwise that it will come to an end shortly.

3. I agree with counsel for the wife that the parties’ future earnings capacities are likely to be roughly the same.  The wife did earn substantially more with her overseas postings, but I accept her evidence that she wishes to look after the child and it is far more probable that the work she gets will equate to approximately that of the husband.  The husband, of course, has a wife and other child now to provide for.  But, by the same token, the wife has not re-partnered and does not have a child minder to assist her.

4. In all the circumstances, I have no hesitation in assessing the parties’ future needs as equal.

Just and Equitable

1. This is a case in which it is entirely appropriate that there be an equal division of the property pool as between the parties bearing in mind that the findings I have made as to what the pool constitutes.  Each party will be responsible for the debts in their own names, and the wife will pay the husband $3,000 to equalise the outcome in addition to the $125,000 half share of the property.

2. I have drawn orders to give effect to these conclusions.  In my opinion, a period of three months is appropriate to grant to the wife to come up with finance to purchase out the husband’s interest in the property, given the time of year at which these orders are being made.

I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of Judge Burchardt.

Date: 21 November 2018