Chaplin and Chaplin
[2017] FCCA 29
•17 January 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CHAPLIN & CHAPLIN | [2017] FCCA 29 |
| Catchwords: FAMILY LAW – Property settlement – undefended. |
| Legislation: Family Law Act 1975 (as amended), ss.79(1), (2) & (5) & 75(2) |
| Cases cited: Ferraro & Ferraro [1992] FamCA 64 Stanford & Stanford [2012] HCA 52 |
| Applicant: | MS CHAPLIN |
| Respondent: | MR CHAPLIN |
| File Number: | ADC 3789 of 2014 |
| Judgment of: | Judge Mead |
| Hearing date: | 12 May 2016 |
| Date of Last Submission: | 12 May 2016 |
| Delivered at: | Adelaide |
| Delivered on: | 17 January 2017 |
REPRESENTATION
| Counsel for the Applicant: | Ms Penelope Kari |
| Solicitors for the Applicant: | Tindal Gask Bentley |
| Counsel for the Respondent: | N/A |
| Solicitors for the Respondent: | N/A |
ORDERS
That in full and final settlement of any claim that either party may have or hereafter have against the other for settlement of property:
(a)That within 42 days of the date of this order the husband do pay to the trust account of Tindall Gask Bentley Lawyers on account of the wife the sum of $158,037;
(b)Contemporaneously with the payment referred to in paragraph 1(a) hereof the wife shall do all such acts and things and sign all such documents as shall be necessary to withdraw caveat number (omitted) secured against the property situate at and known as Property P in the State of South Australia being the whole of the land comprised and described in Certificate of Title Volume (omitted) at her cost in all things;
(c)That the husband be at liberty to utilise funds standing to his credit in (omitted) Bank (being the funds referred to in paragraph 9(a) of the order of 10 November 2014 and paragraph 9 of the order of 3 February 2015) for the purpose of giving effect to the terms of paragraph 1(a) hereof but otherwise shall continue to be restrained and further injunction is hereby granted restraining him from withdrawing any of the said funds from the said (omitted) Bank account pending compliance with the terms of paragraph 1(a) hereof, but that upon such compliance of the said order for injunction contained in paragraph 9 of the order of 3 February 2015 and paragraph 1(c) of this order be discharged;
(d)In the event that the husband shall fail to pay to the wife’s solicitors on account of the wife the monies referred to in paragraph 1(a) hereof in accordance with the terms of that order the husband shall pay interest upon such sum or such part thereof as shall remain unpaid at the rate of 5% per annum until payment shall be made in full;
(e)In the event that the husband’s default in respect of such payment continues for a period in excess of 60 days following the due date for the payment referred to in paragraph 1(a) hereof:
(i)The former matrimonial home situate at and known as Property P in the State of South Australia being the whole of the land comprised and described in Certificate of Tile (omitted) shall be sold at such price and upon such terms and conditions as agreed between the parties or in default of agreement as fixed by the Court;
(ii)The net proceeds of sale after discharge of any mortgage owing and the payment of agents fees, rates, taxes and adjustments shall be divided between the parties as follows:
(ii.i)As to the sum referred to in paragraph 1(a) hereof together with interest pursuant to paragraph 1(d) hereof to the trust account of the wife’s solicitors Tindall Gask Bentley on account of the wife; and
(ii.ii)The balance to the husband.
(f)That within 14 days of the date of these orders the husband do all such things and sign all such documents as shall be necessary to transfer to the wife all of his estate and interest in the Mazda motor vehicle registration number (omitted) at the cost of the wife in all things;
(g)Within 14 days of the date of these orders the parties do all such acts and things and sign all such documents as shall be necessary to close the following bank accounts and transfer the balance of such accounts into an account in the wife’s sole name as she may direct, being:
(i)(omitted) Bank Term Deposit BSB (omitted) Account Number (omitted); and
(ii)(omitted) Bank Term Deposit BSB (omitted) Account Number (omitted).
(h)That in the event that the total amount of the two bank deposits referred to in paragraphs 1(g)(i) and 1(g)(ii) hereof exceeds $38,060 then the wife shall forthwith pay to the husband by way of bank cheque made payable to him one half of the amount in excess of that sum;
(i)That pending the children X and Y each attaining the age of 18 years the parties be restrained and injunctions are hereby granted restraining each of them from dealing in any way whatsoever with funds standing to their credit on trust for the children in the following accounts:
(i)(omitted) Bank Account Number (omitted) held on trust for the child Y in the approximate sum of $20,755; and
(ii)(omitted) Bank Account Number (omitted) held on trust for the child X in the approximate sum of $21,254.
SAVE AND EXCEPT as may be otherwise agreed by the parties and evidenced in writing.
(j)That forthwith upon each of the said children attaining the age of 18 years both parties do all things necessary and sign all such documents as shall be necessary to effect a transfer of the relevant accounts to the sole name of each of the said children;
(k)That in relation to the husband’s interest in the (omitted) Super (“the Fund”) Account Number (omitted) and pursuant to Section 90MT(1)(a) of the Family Law Act 1975 (as amended), whenever a splittable payment becomes payable in respect of the husband’s interest in the Fund the wife shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using a base amount, as at the operative date, of $32,212 and that there be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for this order;
(l)That order 1(k) have effect from the operative time;
(m)That the operative time of these orders shall be the fourth business day after the day on which a sealed copy of these orders is served on the Trustee;
(n)That this order binds the Trustee;
(o)Henceforth and subject to compliance with the terms of these orders the wife retain for her sole use and benefit absolutely free of any claim by the husband:
(i)Her interim property settlement of $50,000;
(ii)Funds from (omitted) Bank cheque in her name in the sum of $14,000;
(iii)The funds referred to in paragraph 1(a) hereof, together with any interest thereon in the event of default;
(iv)Net proceeds of sale of Property O in the State of South Australia;
(v)Mazda motor vehicle registration number (omitted);
(vi)The sum of $38,060 as referred to in paragraphs 1(g)(i) and 1(g)(ii) hereof;
(vii)Her savings;
(viii)Her superannuation entitlements;
(ix)Her long service leave entitlements;
(x)Any life insurances in her name;
(xi)Any shares and investments in her name;
(xii)Any furniture, furnishings and effects in her possession; and
(xiii)Any other personalty or financial resource in her possession or control.
(p)Henceforth and subject to compliance with the terms of these orders the husband retain for his sole use and benefit absolutely free of any claim by the wife:
(i)The property situate at and known as Property P in the State of South Australia (Certificate of Title Reference Volume (omitted));
(ii)Furnishings and effects in his possession;
(iii)His (omitted) motor cycle motorbike;
(iv)His tools;
(v)His guns;
(vi)His interim property settlement of $50,000;
(vii)His savings;
(viii)His superannuation subject to the terms of paragraphs 1(k) to 1(n) hereof;
(ix)His long service leave entitlements;
(x)His life insurances;
(xi)His shares and investments; and
(xii)Any other personalty or financial resource in his possession or control.
(q)That subject to compliance with these orders each party do release the other party from any liability for any claim that either one may have against the other and the parties do discharge their several debts and liabilities without calling upon the other to contribute (including any income tax liability assessed in their respective names) and the husband and wife agree that neither of them will hereafter pledge the credit of the other;
(r)That each party shall do all such acts and things and sign all such necessary documents to give effect to the terms of this order;
(s)That it be a condition of these orders that if either party shall refuse or neglect to execute any Memorandum of Transfer or any other document necessary to give effect to the terms hereof in the proper form within 7 days after the same shall have been tendered to that party by or on behalf of the other party then in such case a Registrar of the Federal Circuit Court of Australia, upon proof by affidavit of such refusal or neglect, is hereby appointed to execute and if in his or her opinion it shall be necessary to do so, to settle the same and do all such other acts and things to execute other such documents as shall be necessary to give full force and effect hereto; and
(t)That each party shall pay their own costs of and incidental to these proceedings by the transferee in each case shall pay the cost and disbursements of and incidental to any transfer to give effect to the terms if this order.
Liberty to either party to apply as to consequential orders.
That all extant applications be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Chaplin & Chaplin is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC 3789 of 2014
| MS CHAPLIN |
Applicant
And
| MR CHAPLIN |
Respondent
REASONS FOR JUDGMENT
Introduction
In October 2014 proceedings between Mr and Ms Chaplin commenced by way of application filed by the wife with respect to parenting issues and property settlement.
On 24 November 2015 final orders were made with respect to parenting issues.
On 18 December 2015 in circumstances where the respondent husband had continued to fail to properly participate in the proceedings and comply with orders for the filing of trial affidavits the wife’s application for settlement of property was listed for hearing on 26 April 2016 on an undefended basis. The trial had previously been listed with priority with respect to both children’s issues and property settlement on 24 November 2015. That date had been ordered on 3 February 2015.
On 3 March 2016 the respondent filed an application in a case seeking to set aside the order for an undefended hearing and for the matter to be listed for trial directions on the next available date. That application was made returnable on the date of the undefended hearing listing.
On 26 April 2016 the respondent husband’s application in a case was heard and dismissed. The wife’s undefended application for settlement of property was re-listed for 12 May 2016.
At the conclusion of the hearing on 12 May 2016 judgment as to final orders was reserved. The question of an interim order, as sought by the wife, for the sale of the investment property she occupied with the parties children Y and X was adjourned to 18 May 2016 at 10:00am.
On 18 May 2016 reasons were delivered and an interim order was made. The effect of the interim order was to enable the wife on behalf of her herself and as attorney for the husband to sell the investment property, with the net proceeds of sale to be placed in the trust account of the wife’s solicitors for and on behalf of the parties.
Subsequent to the making of the interim order and the refusal of the husband to execute the limited Power of Attorney necessary to give effect to that order, the property was marketed by the wife through a licensed agent and upon proof by affidavit of the husband’s refusal to sign firstly the limited Power of Attorney and secondly the contract for sale, a Registrar of the Federal Circuit Court of Australia signed all documents necessary to effect the sale pursuant to the terms of paragraph 1.4 of the interim order of 18 May 2016.
A copy of the contract for sale, annexed to the affidavit of the wife’s solicitor filed 16 August 2016, evidenced a sale price of $505,000. Settlement was due on 7 October 2016.
Background
Mr and Ms Chaplin were at the time of trial aged 50 years and 46 years respectively. The parties commenced a relationship in or about 1988 and married on (omitted) 1994. They did not cohabit prior to marriage and separated on 9 July 2014. The total period of the parties cohabitation was approximately 20 years. There were three children of the marriage namely Z who is now aged 17 ½ years and twins Y and X who will turn 13 years next month.
At separation the child X moved to live with the wife in the investment property in Property P. Y and Z remained with the husband in the former matrimonial home in Property P. The parties were in a state of very high conflict at the time of separation, which level of conflict increased and worsened over the weeks and months post separation. The conflict had a significant effect on all three children who were regularly exposed to same.
X returned to live with the husband approximately two weeks after separation.
On 5 August 2014 the husband was restrained and taken to the (omitted) Hospital by ambulance as a result of the making of a threat to commit suicide expressed in the presence of the wife and the children.
On 31 August 2014 the parties oldest child Z assaulted the wife with the encouragement of the husband. The assault occurred in the presence of the children X and Y.
Following upon that incident Y moved from the Property P property to the Property O property and commenced living with the wife.
On 10 November 2014 orders were made providing for Z and X to live with the husband and Y with the wife. The order also provided for X and Y to spend each weekend together alternating between the home of each of the husband and the wife. The parties also each received the sum of $50,000 by way of a consent partial property settlement order.
Interactions and communications between all members of the family continued to be highly volatile and all three of the children were exposed to and involved in this volatility. Z had little if any communication with the wife and was very aligned with his father’s perspective. The twins’ movements between their parents households were not without difficulties, notwithstanding the orders in place. Over time X was increasingly resistant to time with the wife and Y became increasingly distressed about time with her father and brothers.
A family assessment report was obtained from an expert Ms Hewett. She expressed serious concern about the exposure of all three children to what she described as “significant verbal and physical conflict for which both parents are responsible.”[1]
[1] Hewett report dated 24 June 2015, page 24
She also expressed concern that if X did not live primarily with his mother for at least ten days per fortnight there would be a significant risk that he would be alienated from his mother[2].
[2] Hewett report (supra), page 24
As of 14 August 2015 the husband failed to facilitate time between X and the wife.
During a conference involving the parties, their counsel and the Independent Children's Lawyer on 18 November 2015 an urgent telephone hearing was facilitated by the court as a result of serious concerns relating to the behaviour and mental health of the husband.
During the conference the husband provided signed instructions to his solicitor providing for the children X and Y to live with the wife as and from Friday 20 November 2015, advising that he sought no order as to contact with the children and advising that he did not intend to appear again in court with respect to children’s issues.
During the urgent telephone hearing a recovery order was granted by the court with respect to the child X, together with an order that following upon his recovery he live with the wife. The order further provided for all time between the children and the husband to be suspended.
On 24 November 2015 in the absence of the husband the court made final orders with respect to children’s issues as supported by the Independent Children's Lawyer.
The Law
By application filed by the wife on 20 October 2014 (as amended in the document filed 30 October 2015) the wife sought an order for settlement of property. The husband, in his initial response filed 6 November 2014 (as amended in the response filed 18 December 2015) also sought orders for settlement of property.
There is no doubt in this matter that the relationship between the parties has broken down irretrievably. On 14 October 2016 the wife filed an application for divorce.
Both parties made application to the court to alter their interests in their matrimonial property. The property consisted primarily of two jointly owned houses, various items of household furniture and effects and motor vehicles together with bank savings in the names of each of the parties individually as well as in their joint names. Each party also had superannuation entitlements in their own names.
I find in those circumstances that justice and equity is best served by the court determining a division of the parties assets and liabilities in accordance with the provisions of s.79(4) of the Family Law Act 1975 (as amended)[3].
[3] Stanford & Stanford [2012] HCA52
In the wife’s amended initiating application filed on 30 October 2015 she sought an order that there be a 65/35 division of the net asset pool including superannuation in her favour. At the undefended hearing the wife’s counsel submitted, in accordance with the case outline document, that such an application should be particularised inter alia as follows:
a)A payment to the wife by the husband of the sum of $51,611 within 28 days of the date of an order;
b)The retention by the wife of the net proceeds of sale of the Property O property remaining after payment of all costs with respect to the sale, discharging the mortgage secured over that property and paying the Capital Gains Tax liability of each of the parties arising from that sale;
c)Payment to the wife by the husband of such further amount as necessary to effect a division of the combined value of the former matrimonial home (fixed at $550,000) and the net proceeds of sale of the Property P property in the proportions of 65% thereof to the wife and 35% thereof to the husband;
d)A transfer by the husband of the (omitted) Bank accounts in the names of the children Y and X respectively to the sole name of the wife to hold on trust for the children until they attain the age of 18 years;
e)A transfer to the wife by the husband of all of his estate and interest in the Mazda motor vehicle;
f)A transfer by the parties of funds in a (omitted) Bank term deposit account and a (omitted) Bank term deposit account into the sole name of the wife;
g)A splitting order with respect to the husband’s (omitted) Super superannuation fund in favour of the wife with a base amount of $27,931.50; and
h)Otherwise each party to retain all items of real estate and personalty in their respective possessions including their interim partial property settlement funds of $50,000 each for their sole use and benefit absolutely.
The orders sought by the wife also included provisions necessary to effect the orders sought by her and orders with respect to default including interest provisions and if necessary, orders for sale of the former matrimonial home.
The wife also sought delivery up of a seat from her Mazda motor vehicle, a handmade green embroidered table runner and the personal effects and clothing (including but not limited to the wife’s wedding dress) belonging to the wife, X and Y. Those issues were dealt with by way of an interim order made 18 May 2016.
In the husbands amended response filed 18 December 2015 he sought an equal division of the asset pool including superannuation.
Asset Pool
In paragraph 302 of the wife’s trial affidavit filed 19 October 2015 she deposed to a net non-superannuation asset pool in the sum of $1,224,763.95 and a superannuation asset pool in the sum of $112,412.94.
Included in the non-superannuation asset pool was the property in which the wife, Y and X resided at Property O. This property was the subject of the interim order of 18 May 2016 and was pursuant to that order sold, with settlement being effected on or about 7 October 2016. The sale price was $505,000.
The wife deposed to an estimate of sale costs of $12,000. There was no evidence before the court as to the exact amount of sale costs incurred at settlement. I propose therefore to include in the list of assets an estimate as to the amount held in the Trust Account of the wife’s solicitors by way of sale proceeds of the Property O property in the sum of $493,000, noting that the property sold for $5,000 more than the wife’s estimate in paragraph 302 of her trial affidavit.
There was apparently, according to the wife’s case outline document, a mortgage to discharge at settlement but no evidence that any moneys remained owing with respect to same and so for the purpose of these reasons I find there is no debt associated with that mortgage.
The former matrimonial home in which the husband resided at the time of the hearing is registered in the sole name of the husband and was estimated by the wife to have a value of $550,000. There was no formal evidence before the court from either party as to the value of either the Property P or Property O properties.
Although the matter was heard on an undefended basis the husband had filed an affidavit with respect to property settlement matters on 18 December 2015. He had the opportunity in that document to dispute any of the values ascribed by the wife to the assets in paragraph 302 of her trial affidavit. As to furniture in his possession, he ascribed a value of $300 and to his motor bike a value of $750.
The wife did not adduce any valuation evidence as to the furniture and effects in the husband’s possession. She did not depose in any detail as to what constituted that furniture. Even though the hearing was conducted on an undefended basis it is necessary for the applicant to adduce evidence to prove her case. In those circumstances I am not satisfied that I can find on the evidence that the value of the furniture is $8,000 as alleged by the wife. Since even the husband conceded a value of $300 for same I include that amount in the schedule. I adopt the same approach in fixing a value of $750 for the motor bike.
The wife deposed to the husband having tools to a value of $3,500 and guns to a value of $1,000. She also deposed to the Mazda motor vehicle in her possession but in joint names having a value of $13,000. None of these values were disputed by the husband in his affidavit of 18 December 2015.
There was no dispute between the parties that the wife had retained $14,000 over and above her partial property settlement of $50,000 or that the husband retained $78,000 of savings over and above his partial property settlement of $50,000.
It was common ground that there were monies in the parties joint names in the (omitted) Bank in the sum of $12,295.70 as at 12 October 2015 and in the parties joint names in the (omitted) Bank in the sum of $25,387.97 as at 12 October 2015.
It was common ground that there were bank accounts held in the (omitted) Bank for the benefit of the children X and Y and that neither party sought any orders in their favour in respect of those accounts, with the wife acknowledging in her trial affidavit that Z had already, by the time of trial, accessed the funds in his account. The wife did not pursue any claim in respect of monies in a (omitted) Bank Youth Saver Account or a school bonus apparently received by the husband in October 2014.
At the time of trial the wife’s counsel, in her case outline, set out in Part G thereof a list of assets and liabilities. This differed slightly from the wife’s list of assets contained in paragraph 302 of her trial affidavit in that some of the figures contained therein were updated from the trail affidavit. The variations do not prejudice the husband.
Taking those matters into account I find that the non-superannuation assets of the parties for the purposes of trial were as follows:
Former matrimonial home at Property P – husband’s name E $550,000 Net proceeds of sale of Property O – wife’s solicitors Trust Account E $493,000 Furniture and effects at the former matrimonial home – husbands possession E $300 Husband’s (omitted) motor bike E $750 Wife’s Mazda motor vehicle E $13,000 Husband’s tools E $3,500 Husband’s guns E $1,000 Husband’s partial property settlement funds – order 10 November 2014 $50,000 Wife’s partial property settlement funds – order 10 November 2014 $50,000 (omitted) account in the husband’s name E $78,000 (omitted) bank cheque paid to wife – (omitted) bank account $14,000 Wife’s savings E $1,210 (omitted) term deposit – joint names $12,393 (omitted) term deposit – joint names $25,670 TOTAL E $1,292,823
Liabilities
In paragraph 302 of her trial affidavit the wife deposed to an estimated Capital Gains Tax liability for the Property O property for the parties in the sum of $78,000. At the time of trial the wife’s counsel submitted that the Capital Gains Tax estimate for the husband with respect to that property was $27,397 and the estimated liability for the wife was $20,939.
The wife’s evidence as to the total amount of estimated Capital Gains Tax was clearly available to the husband at the time of the swearing of his affidavit filed 18 December 2015.
The Property P property was an investment property. It has now been sold. Such sale would presumably result in a Capital Gains Tax liability being incurred by each party. I accept the submission of the wife’s counsel that in accordance with the principles discussed in Rosati[4] such a liability should be taken into account in this matter.
[4] Rosati & Rosati (1998) FLC92-804
The property was situated close to the former matrimonial home. The wife alleged that the husband had been controlling of her both prior to and post separation as well as violent and threatening towards her, particularly post separation. It was reasonable for her to seek to sell the house in circumstances where from her perspective it was going to be intolerable to remain living so close to the husband. I find in those circumstances the Capital Gains Tax should be a joint liability of the parties.
The amounts of estimated Capital Gains Tax as submitted by the wife’s counsel at trial were less than deposed to in her trial affidavit. Annexure “AKB-6” to the affidavit of the wife’s solicitor Wendy Barry filed 20 April 2016 was a calculation of the estimated Capital Gains Tax prepared by the wife’s accountant. I accept that evidence as relied on by the wife as the best evidence available.
Accordingly I find the parties liability to be as follows:
C.G.T on sale of Property O property – husband E $27,937 C.G.T on the sale of the Property P property – wife E $20,939 TOTAL $48,876
The husband alleges in his affidavit filed 18 December 2015 that there is a liability in the sum of $60,000 by way of a mortgage to his parents registered over the former matrimonial home at Property P.
In paragraph 329 of the wife’s trial affidavit she referred to the husband deposing in an earlier affidavit to an outstanding loan to his parents in the sum of $60,000. She deposed to having no knowledge of that loan.
The husband annexed to his affidavit filed 18 December 2015 an uncertified copy of a Memorandum of Mortgage. The date of the Memorandum of Mortgage is 16 September 1987. It was apparently signed by the husband and his sister.
In paragraph 23 of the husbands affidavit filed 18 December 2015 he deposed to the sum of $60,000 remaining owing to his father. He adduced no evidence as to any payments made in respect of that mortgage either as to interest or principal, any demands being made with respect to such payments at any time or indeed any knowledge that the wife may have had of that mortgage. In paragraphs 17 and following he deposes to financial arrangements as between he, his sister and his father, with no mention of the wife in that regard.
I am not satisfied on the evidence that there is any reasonable likelihood that the husband will be called to account in respect of the alleged debt in circumstances where there is no evidence of any demand in respect of same or payments being made in respect of same for nearly 30 years. The debt was, according to the mortgage document, to be repaid in full by 16 September 1997.
Accordingly I find the total net non-superannuation pool to be $1,243,947.
Superannuation
I accept the submission of the wife’s counsel that the matter should be determined on a two pool basis in circumstances where it is some considerable time before either of the parties will be able to access their superannuation entitlements.
The wife’s counsel submitted that the husband’s (omitted) superannuation had a value as at late 2015 of approximately $86,000. In the husband’s affidavit filed 18 December 2015 however, he deposed to (omitted) superannuation as at June 2015 in the sum of approximately $93,300. I accept that figure for the husband’s superannuation entitlements.
The wife deposes to superannuation entitlements in the sum of just over $28,000 as at late 2015. At trial the wife’s counsel submitted that the wife’s superannuation entitlements should be taken into account in the sum of $28,875, being the updated figure.
I find therefore the parties superannuation entitlements to be as follows:
Husband's (omitted) superannuation $93,300 Wife's (omitted) Super and (omitted) Super $28,875 TOTAL $122,175
Contributions
It was submitted by counsel for the applicant wife that contributions by the parties to the acquisition, conservation and improvement to their property both during the period of their cohabitation and post-separation should be assessed as equal. She submitted that the contributions were of different character but equal weight[5].
[5] In the marriage of :
The wife conceded that the husband brought into the marriage the property at Property P, which became the former matrimonial home. She deposed to the husband telling her that prior to marriage his parents owned the property but that at the time of the marriage he and his sister owned the property equally. She deposed to the transfer of the sister’s interest in the property to the husband being effected prior to the parties marriage but to having no knowledge of how much money the husband paid to his sister.
The husband did not take the opportunity in his affidavit filed 18 December 2015 to ascribed any value to the property at the time of the marriage save to say that he paid to his sister an amount of $40,000 in or around 1994.
The wife conceded that in addition to the house property the husband also owned a (omitted) motor vehicle and had some savings in an amount unknown to her. She deposed to having some $5,000 in savings at the time of the marriage and a motor vehicle which the parties sold in early 1999 for the sum of $5,000.
The wife deposed to tenants moving out of the Property P property shortly before the parties married and to the husband and his father putting new carpets into the property, repainting the inside of the property and laying new lino in the kitchen as well as putting in a new toilet and removing cupboards in the kitchen.
The wife says that in or about 2000 the parties had the exterior of the house rendered and that around the same time the husband and his father built a carport and gabled roof over the carport. She deposed to that work being done by the husband and his father with some small assistance from an engineer in relation to the footings.
The wife deposed to the husband building an extension to the property in or about 2003 and doing all of the work himself, including foundations and brick work save for some limited assistance for a few hours by the wife in relation to the installation of electrical wiring and a contractor putting up the ceilings in the extension.
She deposed to the husband working full time at his usual employment throughout the eight month extension process, during which time she was pregnant with the parties twins who were born prior to the completion of the renovations.
The wife also deposed to the husband doing all of the paving, concrete coating and tiling work around a pool that the parties paid to have installed in or about 2012 in the sum of $25,000.
The wife deposed to working full time as a (occupation omitted) at the time the parties married and earning approximately $900 per fortnight. She deposed to contributing all of her earnings, which were paid into an account in her sole name, to everyday living expenses as well as household and personal expenses. The wife deposed to being made redundant some two years after the parties marriage and to receiving a redundancy payment of approximately $20,000 net, of which some $8,000 was contributed to savings and $12,000 used to part-pay the purchase price of a Commodore motor vehicle.
The wife deposed to being engaged in full-time domestic duties for the next two years in circumstances where the husband did not want her to take a (occupation omitted) contract offered by (employer omitted) as it required her to (duties omitted) late at night at a time when he said she should be at home.
The husband said at paragraph 26 of his affidavit filed 18 December 2015 that the wife refused employment with the new (employer omitted). I find that effectively it was not an issue of dispute between the parties at the time.
She said following upon ceasing employment the parties were solely supported by the husband’s income in circumstances where the husband would provide “housekeeping money” to the wife each week as well as giving her cash amounts to pay for household bills. The wife recommenced paid employment on a very limited basis in approximately December 2013 and remained in that employment at the time of trial.
The parties first child was born in 1999, some five years after the parties marriage and the twins were born in (omitted) 2004, by which time the parties had been married for ten years.
Other than the first two years or so of the marriage and the last seven or eight months of the marriage the applicant wife was engaged in full-time home making and parenting duties and she set out her duties in that regard in paragraphs 370 to 381 of her trial affidavit.
As well as caring for the husband and the children and undertaking the majority of domestic duties the wife also had a significant role in the care of the paternal grandparents.
The employment that the wife secured in late 2013 and continuing to the time of trial was in a (employer omitted) and involved approximately two shifts per week.
The wife deposed clearly in her trial affidavit, and her counsel conceded in her submissions at trial, that the husband had been a very hard worker throughout the entire period of the their relationship.
It was the wife’s case however that although conceding that the husband had brought into the marriage at least some level of equity in the Property P property, albeit undefined, the period of cohabitation was lengthy. She argued that notwithstanding his greater direct financial contributions during the period of cohabitation by way of wages, the wife had made an equal but different contribution in terms of her role as homemaker and parent as well as her significant assistance given to the day to day care requirements of the paternal grandparents.
Ms Kari submitted that the value of the initial financial contribution of the husband was eroded in circumstances where there was a long marriage during which time both parties had made significant contributions. I accept that submission.
Post separation the husband remained living in the Property P property and was solely responsible for any expenses relating to that property. The wife remained living in the Property O property with her mother. Initially X lived with her for a very short period of time and as of late August 2014 Y lived with her and spent some weekend time with the husband. The child Z remained in the husbands care at all times, although by the time of Ms Hewett’s report prepared in early 2015 there was increasing conflict between Z and the husband. By the time of trial Z appeared to be living independently.
At the time of trial the applicant wife gave additional oral evidence confirming that X remained in her full-time care, some six months after the recovery order had been executed and that neither he nor Y were communicating with or spending time with the husband. It was the wife’s evidence that X had attempted to make contact with the husband but the husband had refused. Both children are due to commence high school in 2017.
At the time of trial the wife gave evidence of Z having been arrested following an alleged assault on the husband, being on bail and to her not knowing his whereabouts.
The wife’s evidence at trial was that notwithstanding the material contained in the husband’s affidavit filed 18 December 2015, she remained of the belief that he was working. This was as a result of her observations (the parties at that time lived very close together) of other concreters dropping the husband off at his home and to the husband being in work clothes.
Neither of the parties made any financial contribution to the costs of care of the child or children in the care of the other of them post separation. The husband was at all times responsible for providing physical and financial care for Z, at least until such time as Z ceased living with him in the former matrimonial home. He also had the greater responsibility for the physical and financial support of X post separation until X moved to live with the wife on a full-time basis as and from 18 November 2015.
The husband paid the outgoings in respect of the Property P property post separation and the wife paid some rates and taxes relating to the Property O property. The husband however made a significant contribution in that regard.
I am satisfied however that the husband had a greater financial capacity to do so post separation. The wife had limited capacity to earn income post separation as a result of the parties living for almost all of the marriage in what might be described as a “traditional” situation, where the husband was the bread winner and the wife attended to the housekeeping and parenting duties to which I have referred.
The wife provided the majority of the care for Y post separation, particularly as from 31 August 2014.
Taking all of those matters into account I am satisfied that I should accept the submission of counsel for the applicant wife and assess the parties contributions both during the marriage and post separation as equal.
Section 75(2) Factors
It was the wife’s case that there should be a 15% adjustment in her favour on account of future needs factors, taking into account the relevant factors pursuant to Section 75(2) of the Family Law Act 1975 (as amended).
The husband is aged 50, the wife aged 46 and although it was abundantly clear throughout these proceedings that both parties were suffering from significant stress and anxiety there is no evidence before the court that either party is in other than reasonable health.
The husband deposed to his eye sight deteriorating and his health being poor but adduced no objective evidence to support those assertions.
The husband filed two financial statements, the first on 6 November 2014 and the second on 21 April 2016. In the first such statement he deposed to average weekly income of $1,250 and to being employed as a (occupation omitted) with a (employer omitted) for a period of 15 years. In the second financial statement he deposed to no weekly income and to being unemployed. He did not depose to receiving any Commonwealth benefits arising from the unemployment. There was no evidence adduced by the husband in his affidavit filed in December 2015 that provided any explanation for his state of unemployment and as I have already said, no objective evidence to support his assertion of poor health and poor eyesight.
The wife filed financial statements on 5 December 2014 and 22 April 2016 respectively. In the first she deposed to average weekly income of $195 and to receiving $55.40 by way of rent paid by her mother and $53 by way of Family Allowance, being a total of $303.40 per week. In her more recent financial statement she deposed to weekly income on average of $110 per week, Family Allowance Part A in the sum of $168 per week and family allowance Part B in the sum of $55 per week, a total of $333 per week.
I find that both parties have the physical and mental capacity for appropriate gainful employment, but that there is little doubt the husband has a significantly greater income earning capacity than the wife in circumstances where she has been out of the workforce for almost the entirety of the marriage.
I accept the submission of the wife’s counsel that the husband’s income and earning capacity will continue to be significantly greater than that of the wife given his experience in the (omitted) industry and the strong work ethic exhibited by him throughout the marriage.
The husband deposes in his December 2015 affidavit to the wife having undertaken various courses but there is no evidence that she has experience arising from working in those fields or that she is likely to earn any significant income from such employment in the future. She is relatively unskilled but taking into account her age and state of health it is possible that she will be able to increase her work and therefore her income at least to some degree.
The husband does not have commitments necessary to enable him to support any other person except himself and he does not have the care or control of any of the children of the marriage under the age of 18 years. Both X and Y are in the full time care of the wife and I accept do not spend time with the husband with any degree of regularity. I find that the wife has the responsibility to provide for both X and Y physically and financially. She is in receipt of the Centrelink benefits to which I have referred to assist in that regard.
During the marriage the parties enjoyed a standard of living that was reasonable in that the family lived in the former matrimonial home, which was renovated and improved over time, and the parties had been able to acquire an investment property into which the wife moved upon separation. This is a matter where the financial outcome of the settlement of property between the parties must provide both parties with an ability to remain living in reasonable circumstances.
The marriage was extant for some 20 years and I find that it has affected the earning capacity of the wife. The parties adopted what I have already referred to as a “traditional” marriage where the husband took the role of the income provider and the wife the homemaker and parent. This has resulted in the wife being out of the workforce for almost 20 years and now, at the age of 46, I accept that she will find it difficult to obtain employment that provides her with the possibility of earning income commensurate with that of the husband, who has worked hard and full-time throughout the marriage and acquired considerable skills and experience.
At the time of trial the wife’s mother lived in the investment property with the wife, Y and X and paid modest rent. It is unclear as to whether, post the sale of that property, the wife’s mother has continued to live with the wife and the children.
Neither party paid child support to the other of them post separation. It is unclear whether Z is living with the father or independently. With respect to X and Y, both children have been in the full time care of the wife since November 2015 and it is unlikely in the foreseeable future that they will spend significant time with the husband.
I am satisfied, taking into account the acrimony between the parties and the husband’s assertion that he will not be working in the future, that it is unlikely that the wife will receive child support from the husband at any time. I accept the wife’s evidence given orally at trial that the husband was working at the time of trial.
I find that a significant adjustment should be made in favour of the wife on account of the husband’s superior earning capacity, the responsibility of the wife to provide physical and financial care of the parties two children X and Y who are not quite 13 years of age and because, on the evidence, it is unlikely that the husband will pay child support in respect of those children pending them attaining the age of 18 years or obtaining employment.
It was submitted on behalf of the wife by her counsel that in relation to Section 75(m) the court should also take into account that the wife will need to rehouse herself and the children in circumstances where it was reasonable for her to wish to sell the investment property. This will expose the wife to a stamp duty liability that will not be faced by the husband in circumstances where he will retain the former matrimonial home. I accept that submission.
It was submitted by the wife’s counsel that there should also be an adjustment in favour of the wife pursuant to the terms of Section75(2)(o) in circumstances where the husband’s conduct throughout the proceedings has significantly increased the wife’s legal costs.
This hearing proceeded on an undefended basis. I accept that although at one level that required the wife’s solicitors to undertake a more thorough preparation for hearing than might otherwise might be expected it also resulted in the matter proceeding for far less time. I do not accept that the wife’s costs were greater than otherwise might have been in those circumstances. I am not persuaded that there should be any adjustment on account of the wife’s costs arising from litigation with respect to the children. Although the husband’s conduct with respect to the litigation generally was unsatisfactory and unhelpful I am not persuaded that it significantly increased the wife’s costs.
Taking into account the matters to which I have referred I find that there should be a 10% adjustment in favour of the wife on account of future need factors.
The adjustment was sought by the wife with respect to the non-superannuation asset pool. It was submitted on her behalf and I accept that it is appropriate to divide the superannuation pool to effect equality between the parties. This in line with the findings as to contribution. The material filed by the parties as to superannuation confirmed their benefits were acquired during the marriage. I find that there is no basis for a Section 75(2) adjustment in relation to superannuation entitlements.
Conclusion
The parties net assets excluding superannuation total $1,243,947.
The draft orders proposed by the wife included a transfer of Y and X’s trust accounts from the parties joint names to her sole name to hold on trust for the children until they reach the age of 18 years. In circumstances where the level of co-operation between the parties in this matter is almost non-existent, I do not consider it is in anyone’s interests for such an order to be made but rather for an order to be made restraining the parties from utilising any of those funds pending the children attaining the age of 18 years at which time the accounts shall be transferred into their sole names. This was effectively the position of both parties.
If the parties net non-superannuation asset pool is divided between them as to 60% thereof to the wife and 40% thereof to the husband as I determine to be just and equitable taking into account the size of the asset pool, the contributions made by each of the parties and the future needs of the wife, it would result in the husband retaining net assets to the value of $497,578 (rounded) and the wife retaining net assets to the value of $746,368 (rounded).
The husband currently has or has had in his possession or control the following assets:
Former matrimonial home Property P $550,000 Furniture and effects at the former matrimonial home $300 Husband's (omitted) motor bike $750 Husband’s tools $3,500 Husband’s guns $1,000 Husbands partial property funds $50,000 Husband's (omitted) Bank account $78,000 TOTAL $683,550
The liabilities to be assumed by the husband total an estimated $27,937 reducing the net value of assets in his possession or control to $655,613.
In the event that the wife was to retain the net proceeds of sale of the Property O property she would have or have had in her possession or control the following assets:
Net proceeds of sale Property O property $493,000 Wife’s Mazda motor vehicle $13,000 Wife’s partial property settlement fund $50,000 Wife’s (omitted) Bank funds $14,000 Wife’s savings $1,210 TOTAL $571,210
The net assets in the wife’s possession or control after taking into account her estimated Capital Gains Tax liability of $20,939 are reduced to $550,271.
The two net amounts to which I refer total $1,205,884. The joint (omitted) Bank and (omitted) Bank deposit amounts of $38,060 bring the total net asset pool to $1,243,944. The amounts in the joint deposits will have changed by the time the orders I intend to make are effected.
Taking into account the net assets already retained by each of the parties to which I have referred, a distribution of the parties net non-superannuation assets in accordance with my findings would require the husband to pay to the wife the sum of $158,037. This is based on the wife retaining the amounts in the (omitted) Bank and (omitted) Bank term deposits calculated for the purposes of this order as being in the sum of $12,393 and $25,670 respectively.
It is likely that by the time this order is effected those amounts will have increased.
In the event that the total amount of the funds in the (omitted) Bank and (omitted) Bank joint accounts to be retained by the wife exceeds $38,063, the additional amount shall be divided equally between the parties.
The effect of the order is that the husband will be required to borrow slightly in excess of $80,000 if he utilises the $78,000 plus interest standing to his credit in the (omitted) Bank. I am satisfied that the husband has the capacity to borrow those funds taking into account his work history and the value of the property he is to retain. I am also satisfied that the husband has the capacity to service a mortgage of that size without significantly affecting his current standard of living.
In the event that he decides to sell the property in circumstances where it would appear he is now the only occupant I am satisfied that he will have sufficient funds and capacity after the discharge of any mortgage or payment to the wife to appropriately rehouse himself.
The husband will therefore retain in his possession for his sole use and benefit absolutely the net funds of $655,613 to which I have already referred, less the sum of $158,037 leaving $497,578, being 40% of the parties net non-superannuation pool.
The wife will retain for her sole use and benefit absolutely the net funds of $550,271 to which I have already referred, together with $38,060 of the (omitted) Bank and the (omitted) Bank deposits as well as the payment of $158,037 from the husband. These three amounts total $746,368 which is 60% of the total net non-superannuation pool.
To effect an equal division of the parties superannuation entitlements a splitting order will be made with respect to the husband’s (omitted) Super with a base amount of $32,212. This will result in each party having superannuation entitlements in the sum of approximately $61,087. Procedural fairness has been afforded to the said superannuation fund.
For these reasons I make the following orders.
I certify that the preceding one hundred and twenty-seven (127) paragraphs are a true copy of the reasons for judgment of Judge Mead
Date: 17 January 2017
Ferraro & Ferraro [1992] FamCA 64
Mallett & Mallett [1998] HCA 21
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