Crampton and Robinson (No. 2)

FAMILY COURT OF AUSTRALIA

CRAMPTON & ROBINSON (NO. 2)

[2013] FamCA 856

FAMILY LAW – PROPERTY – Husband to transfer matrimonial home to wife

Family Law Act 1975 (Cth): ss79(4), 75(2)

Omacini& Omacini (2005) FLC 93-218
Pierce v Pierce (1998) 24FamLR 377
Stanfod & Stanford (2012) 247 CLR 108

APPLICANT:

Mr Crampton

RESPONDENT:

Ms Robinson

FILE NUMBER:

SYC

326

2011

DATE DELIVERED:

31 October 2013

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Cleary J

HEARING DATES:

23, 24 & 25 September 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Gersbach

SOLICITOR FOR THE APPLICANT:

Fitzpatrick Solicitors

COUNSEL FOR THE RESPONDENT:

Mr Beaumont

SOLICITOR FOR THE RESPONDENT:

Michael Conley Lawyers

Orders

That within 40 days of the making of these Orders the husband shall transfer to the wife all his right title and unencumbered interest in the property situate at B Street, Suburb C in the State of New South Wales (“Suburb C”).
That simultaneously with Order 1 herein the wife shall do all such things and sign all such documents necessary to discharge the mortgage to Heritage Home Loan secured over Suburb C and pending such discharge the wife shall indemnify the husband in relation to the mortgage and shall pay the minimum mortgage repayments as and when they fall due.
That simultaneously with orders 1 and 2 herein the husband shall cause to be paid to the wife or to such account as may be nominated by the wife, such sum as may be agreed in writing between the parties and failing agreement such sum as may be assessed in respect to:
(a) Order 3 of the Orders dated 11 February 2013; and
(b) Order 10 of these Orders.
That unless otherwise specified in these Orders as against the husband the wife is solely entitled to and the husband has no interest in:
(a)the household contents of Suburb C;
(b)the wife’s bank accounts;
(c)the wife’s personal effects including jewellery;
(d)the wife’s superannuation entitlements, namely E Super, D Super (two policies);
(e)the wife’s motor vehicle Honda … subject to the car loan with St George Bank; and
(f)all other property and financial resources in the name or control of the wife as at the date of making these Orders.
That unless otherwise specified in these Orders as against the wife, the husband is solely entitled to and the wife has no interest in:
(a)all bank accounts in the name of the husband;
(b)household furniture and personal effects in the possession of the husband;
(c)the husband’s superannuation entitlements, D Super 1 and D Super 2;
(d)the husband’s motor vehicle Subaru …; and
(e)all other property and financial resources in the name or control of the husband as at the date of the making of these Orders.
That unless otherwise specified in these Orders:
(a)each party shall be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these Orders and that for this purpose, bank accounts are deemed to be in possession of the person whose name appears on the bank records thereof and superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment of such entitlements;
(b)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 pursuant to these Orders;
(c)each party shall be solely liable for and indemnify the other against any liability in their respective sole names including but not limited to credit cards and personal loans.
That each party shall do all such things and sign all such documents as are necessary to give effect to these Orders.
That in the event that either party refuses to execute a deed or instrument necessary to give effect to these Order the Registrar or Deputy Registrar of the Family Court of Australia is appointed pursuant to s 106A of the Act to execute all deeds and documents in the name of that party and do all acts and things necessary to give validity and operation to the deed or instrument.
That each party has liberty to apply in relation to the implementation of these Orders pursuant to Order 9.
That the husband shall pay within 3 calendar months of the date of these Orders the costs of the wife as agreed or assessed in respect of the applications by the husband heard on 28 August 2013 and 9 September 2013.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Crampton & Robinson (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 326 of 2011

Mr Crampton

Applicant

And

Ms Robinson

Respondent

REASONS FOR JUDGMENT

Introduction

This is a dispute over the alteration of interests in matrimonial property.
The applicant in the proceedings is Mr Crampton (“the husband”), aged 55 and the respondent is Ms Robinson (“the wife”) aged 44.
In 1991 the wife joined a government depaprtment where she met the husband who had been working there for four years. They began living together in November 1994 when the wife resigned from that department and went to work for another government department. They married in October 2003.
In 2005 the parties’ only child was born. F is now aged eight years.
In October 2009, the wife’s niece G, then aged 14, became a fulltime member of the household, both her parents having died.
In late December 2009, the parties separated in dramatic circumstances and have not reconciled. The parties are not divorced.
Accordingly there has been a relevant relationship between them for about 19 years which includes 15 years of cohabitation.
The wife has remained living in the family home since separation with F and G who is now aged 18 years.

Events leading to separation and thereafter

In mid-December 2009 the parties, with their son and G, travelled to Europe for a family holiday. G had been a member of the household for about six weeks.
In late December 2009 in European Country A, there was an emotionally charged confrontation between the parties. The wife accused the husband of sexual misconduct with G. The husband denied any wrong doing. There was a heated argument.
The parties agree that ultimately the husband fell from the window of their hotel room suffering serious injury as a result. They disagree over how the fall happened. The husband asserts that the wife pushed him and the wife asserts that the husband jumped. There is a third version of events being that the husband slipped. For the purposes of these proceedings, I do not need to make any findings about the circumstances.
The husband was in hospital in European Country A for about three weeks and was then discharged for return to Australia for further treatment.
In January 2010, the husband arrived back in Australia and was hospitalised for a further two months. On discharge from hospital, the husband stayed with his sister, Ms H, for about six months.
In May 2010, the husband was charged with indecent assault and other offences under the Crimes Act1914 (Cth) in relation to G. He was granted bail.
In July 2010 the husband moved to rented premises in a southern Sydney suburb. He was sufficiently recovered from his injuries to return to work with the government department.
There was an aborted criminal trial in October 2011 when the judge became ill.
In January 2012 there was a second trial for three to four weeks. The jury was unable to reach a verdict on three of the charges and returned not guilty on two others.
In July 2012, after two years back at work, the husband was transferred into the city office.
In September 2012, a further trial of the three remaining charges was adjourned on the application of the husband.
In December 2012, a third trial proceeded. The husband was convicted of two charges of indecent assault. The jury could not reach a verdict on the third charge, with which ultimately the Director of Public Prosecution did not proceed.
On 20 December 2012, bail for the husband was revoked and he was held in prison where he has remained since.
In January 2013, the husband’s employment with the government department was suspended.
In March 2013, the husband was sentenced to a term of imprisonment of three years and two months, with part of the sentence being suspended on condition of the husband entering recognisance to be of good behaviour for 14 months.
On 22 March 2013, the husband lodged in the Supreme Court of NSW a Notice of Intention to Appeal against conviction. The husband had applied for a grant of legal aid to proceed with the Appeal.
The husband has, apparently, very recently made an application for extension of time to lodge an appeal. Accordingly at this time, an Appeal has not been lodged.
Failing an Appeal being lodged and succeeding, the husband expects to be released in December 2014.
This case was heard on the very clear basis that:
(a)There would be no enquiry into how the husband fell from the hotel window.
(b)There would be no revisiting of the criminal charges which gave rise to conviction of the husband.

The evidence

Documents relied on by the parties

The husband relied upon the following documents:
(1)Initiating Application of the Husband filed 20 January 2011;
(2)Affidavit of Husband filed 4 February 2013;
(3)Affidavit of Husband filed 5 February 2013;
(4)Amended Initiating Application of the Husband filed 7 February 2013;
(5)Affidavit of Ms H filed 15 February 2013;
(6)Further Amended Financial Statement of the Husband filed 31 July 2013
(7)Affidavit of Husband filed 31 July 2013;
(8)Affidavit of Denis Fitzpatrick, solicitor filed 2 September 2013.
(9)Affidavit of Dr J filed 4 September 2013;
The wife relied upon the following documents:
(1)Response to Initiating Application of the Wife filed 21 March 2011;
(2)Affidavit of Wife filed 30 May 2013.
(3)Financial Statement of the Wife filed 5 September 2013;

The husband

The husband gave oral evidence-in-chief that he had recently seen an audiologist who confirmed the hearing loss which has troubled him in previous applications before me. There had been no application for Court assistance. A hearing loop was provided from the second day. However, I am satisfied that the husband heard all questions asked of him on the first day through counsel speaking louder as necessary. The husband himself made every effort to cooperate with the process.
I had the impression that the husband has been intensely focused on what he considers to be the injustice of events commencing in December 2009 and unfolding since. That focus has led to his fight to regain his position in his family, his work and in society. It appears to have impaired his ability to reflect on the impact of those same events on his wife, their son and G. His application to the Court and the nature of the cross examination of his wife reflects that focus.
He suffered traumatic injuries and was in hospital in Europe and Australia for a total of about three months. He hoped for reconciliation with his wife, or if not, the opportunity to return to the family home after release from hospital. Objectively, with an Apprehended Violence Order (“AVO”) in place for G’s protection and the traumatised reactions of his family to events in European Country A, such a return home was always unlikely. However, I accept that the husband suffered his exclusion as a heavy loss.
He recuperated in the home of his sister for several months.
Between December 2009 and December 2012 he saw his son on about 13 occasions for five to six hours each time supervised by a friend.[1] Since he has been in prison he has chosen not to communicate with his son by letter, card or gift.
[1] Affidavit of Wife filed 30/05/2013, par 163
The husband was quick to protest his innocence and deny any wrong doing in relation to G. He stated that “until 12 months ago” there had been an AVO against him for her protection. He explained the circumstances of the AVO in this way; that he had originally contested the making of the order but ultimately consented to it in order to preserve his funds for the criminal proceedings.
The wife has been supportive of G. The husband appeared resentful that his wife kept G in the home which had the effect, through the order, of excluding him. He thought she should have been put out of the house. There was an unreality about the evidence of the husband.
There was an attack on his credit with some effect.
The application made by the husband in October 2011 to I Credit Union[2] for a personal loan contains untruthful statements. The stated purpose for the loan was a “holiday”, whereas in fact it was for funds to pay lawyers for the looming criminal trial. The amount owing under the home mortgage was significantly understated. The declaration that the husband had never had legal proceedings against him was false.
[2] Exhibit 10
The husband said he was unable to think back to that time. That could be so. However he conceded the dishonesty on the face of the document. He denied saying what it takes to gain an advantage, stating, “No I’m an honest person.” The evidence suggests that the husband has been an honest person but has changed. On this occasion he did misrepresent his situation to gain an advantage.
In October 2012, the husband was hoping to borrow again for legal expenses. In an email exchange with the Credit Union he referred to putting the mortgage account $180,000 “in credit.” I do not accept that this was a misrepresentation. The accurate debit balance was referred to in his email.[3] However I infer that the husband was attempting to draw down on the mortgage without reference to the wife. Again, this is a change from the open sharing of money and expenses during the marriage.
[3] Exhibit 9
Finally, the husband gave a charge over his interest in the matrimonial property at B Street, Suburb C (“the Suburb C property”) to his solicitor to secure unpaid costs in these proceedings. This information was disclosed through a small note in an annexure to a Financial Statement.[4] Counsel for the husband referred to the Charge and Caveat for the first time at the conclusion of the evidence.
[4] Further Financial Statement ‘A’ filed 31/07/ 2013
That the wife and her advisers had been left to discover this significant issue does not reflect well on the husband or his advisers. It is another instance of the focus of the husband exclusively on his own misfortune.

The wife

The wife presented as a calm, sad and accurate witness.
She too has been under enormous pressure since the events of December 2009. She has effectively been a single parent for four years. She lost her marriage and family. She assisted her injured husband to return to Australia and she managed the children’s distress and incomprehension.
The wife suffered depression and sought treatment successfully. She reduced her working hours during 2010, but has never ceased supporting F and G financially and emotionally. She and G were witnesses in the various trials.
Her updating evidence was that F continues to have emotional outbursts as he has done since the events in Europe. They now happen less often but are more intense. His development and progress at school has been uneven. Her oral evidence was that, “He writes like a Kindy reads like a Year 6”.
F continues to see a psychologist weekly. The wife has regular meetings with his teacher and school principal.
The wife was strongly cross-examined over what was put to her as a failure to make all of the mortgage payments since separation. She agreed she had prioritised other payments and paid what she could off the mortgage. Those payments were set out in her affidavit being rates, insurances, household bills and child care expenses[5].
[5] Affidavit of Wife filed 30/05/2013, par 169
Since January 2011 when the husband initiated these proceedings, there have also been legal expenses as a call on her income.
The wife’s oral evidence was that she tried to run the matter herself but “receiving the District Court Statement of Claim made everything more complicated.” I accept that it did.
In December 2012 the husband filed in the District Court a claim against the wife for damages for the personal injuries he suffered in Europe. The wife incurred costs responding.
There was then an application for this Court to hear that cause in its accrued jurisdiction. The application was unsuccessful. The wife was represented by Senior Counsel. A costs order was made against the husband. He has not paid those costs. Subsequently the husband discontinued the civil claim.
I accept that the wife has met her obligations to F, G, the parties home and her legal advisors appropriately and in that order of priority.
She readily made concessions; that the parties both cared for their son prior to separation and that the parties ran their finances together and shared their money.
The response of the wife to hearing of the charge given by the husband was to instruct her counsel to advise the Court as follows:
That in the event that there was an order for transfer to her of the husband’s interest in [Suburb C] it should be unencumbered and if it were not, it would be the intention of the wife to commence enforcement proceedings pursuant to Section 106B FLA.

I consider this to have been an unrestrained and open response.

Application of the Law

In considering applications for alteration of property interests and transfer of property the Court must:
(i)Identify the existing legal and equitable interests of the parties in property[6];
(ii)Consider whether it would be just and equitable in the particular circumstances to make an alteration; and
(iii)
If an alteration should be made, to consider the matters contained in

s 79(4) and s 75(2) of the Family Law Act 1975 (Cth) (“the Act”) in coming to an adjustment; and
(iv)Analyse and consider whether the adjustment under consideration would be just and equitable.
[6] Stanford & Stanford (2012) 247 CLR 108
The interests in property assets and liabilities of the parties were identified in a joint Balance Sheet[7] as set out below:

Ownership				Description			Wife value	Husband value
ASSETS
1	H/W			[B Street, Suburb C]			1,000,000	1,000,000
2	W			WBC …03			10,198	10,198
3	W			WBC …27			3,305	3,305
4	W			ING …61			1,328	1,328
5	W			ING …98			529	529
6	H			Funds held in Fitzpatrick Solicitors Trust Account			861	861
10a	W			Funds held in Michael Conley Lawyers Trust Account			30,000	30,000
7	H			Subaru …			4,400	4,400
8	W			Honda …			10,000	10,000
9	W			Vespa …			950	950
10	H/W			Household contents			10,000	10,000
11	H			Household Furniture and effects			5,000	5,000
12	W			Jewellery			2,000	2,000
13	W			Employee Stock Plan – vested			4,380	4,380
Total				1,082,951	1,082,951
ADDBACKS
14A	H			Husband’s paid legal disbursements in Family Law Proceedings Number SYC326/2011			Nil	5,070
14	H			Husband’s paid legal fees in respect of proceedings SYC326/2011- Slater & Gordon Lawyers (Family Law)			Nil	15,909
15	W			Wife’s paid legal fees in respect of proceedings SYC326/2011 to Armstrong Legal			Nil	9,980
16	W			Wife’s paid legal fees in respect of proceedings SYC326/2011 to Barkus Dooley Kelly			Nil	20,216
17	W			Wife’s paid legal fees in respect of proceedings SYC326/2011 to Michael Conley Lawyers			Nil	61,783
18	W			Wife’s occupation of the matrimonial home to the exclusion of the Husband since mid January 2010			Nil	110,145
Total				Nil	223,103
LIABILITIES
19	H/W			Heritage Bank … (Mortgage) as at 31.3.13			360,405	360,405
20	H/W			Sale realisation costs (Estimate only)			Nil	25,000
21	H			Personal Loan – [Ms H]			Nil	20,000
22	H			Personal Loan – St George …			Nil	E 28,500
23	H			Personal Loan – [K Credit] Union			Nil	E 31,000
24	H			Slater & Gordon – outstanding legal costs from District Court criminal proceedings.			Nil	23,083
25	H			Unpaid legal costs – Family Law proceedings SYC326/2011 – Fitzpatrick Solicitors			Nil	127,955
26	H			Unpaid legal costs – re government department employment issues – Fitzpatrick Solicitors			Nil	6,750
27	H			Husband’s legal costs owing to Fitzpatrick Solicitors for District Court Civil Proceedings			Nil	3,042
28	H			Costs Order in favour of Wife made on 11 February 2013			Nil	E12,000
29	W			Westpac Flexi Loan …			56,999	56,999
30	W			Visa – Westpac			1,045	1,045
31	W			St George Car Loan – …			11,372	11,372
32	W			Tax liability – 2012/2013 Financial Year – no assessment			31,756	NK
Total				461,577	707,151
SUPERANNUATION
Member				Name of Fund	Type of Interest		Wife value	Husband value
33		W		[E] Super	136,992		136,992
34		W		[D] Super	65,992		65,992
35 W		W		[D] Super	168		168
36		H		[D] Super 1	517,372		517,372
37		H		[D] Super 2	182		182
Total				720,706		720,706
FINANCIAL RESOURCES
Ownership			Description				Wife value	Husband value
38		W	Employee Stock Plan – unvested (USD$125,006 as at 22 Aug 2013)				132,286	132,286
39		W	Tax on vesting Employee Stock Plan - estimate				(27,827)	NK
Total			104,459		132,286

Net Assets excl. financial resources	1,342,080	1,319,609
Net Assets incl. financial resources	1,446,539	1,451,895

Identification of existing legal and equitable interests in property

The assets of the parties to be taken into account are as follows:

(A)      The husband
Item No
1One half share as tenant in common in B Street, Suburb C  $500,000
6Funds in solicitor’s trust account  $861
7Subaru motor vehicle  $4,400
8Household furniture and effects     $5,000
$510,261

36, 37Superannuation – 2 funds $517,554
Total$1,027,815

(B)     The wife
Item No
1One half share as tenant in common in B Street, Suburb C  $500,000
2WBC …03  $10,198
3WBC …27  $3,305
4ING …61  $1,328
5ING …98  $529
10(a)Funds held in solicitor’s trust account  $30,000
8Honda motor vehicle  $10,000
9Vespa   950
10Household contents family home  $10,000
12Jewellery  $2,000
13Employee Stock Plan Vested      $4,380
$572,690

33, 34
& 35Superannuation – 3 funds $203,152
Total$775,842

There was no dispute over the value or inclusion of any of the above items.
Accordingly, the preliminary asset position of the parties is:
The husband $1,027,815
The wife $775,842
$1,803,657
There was considerable disagreement, at least initially, over how the liabilities of the parties should be taken into account. Appropriate concessions were made in submissions.
The actual liabilities of the parties are as follows:
(A)     The husband
19Half share of debt secured by mortgage over Suburb C $180,203
21Personal loan to husband by his sister, Ms H (criminal costs)  $20,000
22Personal loan to husband – St George (criminal costs) E $28,500
23Personal loan to husband – K Credit Union (criminal costs)     E $31,000
24Balance of costs owing to solicitors, Slater & Gordon (criminal costs)  $23,083
25Unpaid legal costs (family law proceedings) - Fitzpatrick Solicitors  $127,955
26Unpaid legal costs re: submissions to government department regarding employment – Fitzpatrick Solicitors                 $6,750
27Unpaid legal costs for civil proceedings commence and discontinued in District Court – Fitzpatrick Solicitors     $3,042
28Costs order in favour of wife made 11 February 2013 (Undetermined) E$12,000 – $17,000
Analysis
19There is no dispute that the mortgage is a joint liability $180,203
21-23These loan monies were fully expended on costs in criminal proceedings. It was properly conceded that this is not a joint matrimonial debt  E $79,500
24Balance of costs in criminal proceedings. Likewise conceded  $23,083
26Legal costs on employment/termination submissions. Likewise conceded  $6,750
27Legal costs for District Court proceedings abandoned. Likewise conceded  $3,042
28Costs order February 2013 – these proceedings against husband unpaid. Likewise conceded and further conceded should not be taken into account at any level  E$12,000 – $17,000
(B)The wife
19Half share of debt secured by mortgage on Suburb C.
The obligation under the mortgage should be adjusted against the wife’s interest  $180,203
29Westpac Flexi Loan. There is no evidence to support a finding that this debt is a joint liability  $56,999
30Visa Westpac. Current personal debt of the wife             $1,045
31St George car loan. This debt should be adjusted against the interest of the wife in the motor vehicle for which the debt was incurred.  $11,372
32Tax liability. This is a personal liability of the wife arising from her income  E$31,756
$191,575
Accordingly, the mortgage debt should be deducted against each party’s interest in Suburb C. The car loan should be adjusted against the wife’s interest in her car.

Net asset position of the parties

(A)      The husband:  $1,027,815
$ 180, 203
Total     $   847,612
(B)     The wife:  $775,842
Less         $11,372
$180,203  $191,575
Total     $584,267

Addbacks

The husband contended for certain items of expenditure by the wife to be added back into the pool of matrimonial assets.
Items 15-17   Paid legal fees of the wife in respect of these
  Proceedings:  $91,979
I do not accept this submission. The fees were paid from the income of the wife as a legitimate expense after the husband commenced proceedings in January 2011. For the same reason, I endorse the submission on behalf of the husband that his fees paid from income in 2010 should not be added back[8].
Items 14 & 14A[8]
Item 18The husband contends that effectively an occupation fee should be paid by the wife for her occupation of Suburb C. The fee is fixed by reference to mortgage payments which might have been paid[9] but were not, namely $110,145. This figure was discounted by the sum of $18,000 actually paid by the wife off the mortgage.
[9] Exhibit 15
I reject this submission. This is to disregard the legal obligation of each party to meet mortgage payments. The husband has not made any payment toward the mortgage.
This issue is properly dealt with in any consideration of the relative contributions of the parties between separation and date of hearing.
It would be artificial to add back a figure in this way[10] and I have not done so.
Items 38, 39RSU’s   $132,286
Gross Tax est:  $27,827
The husband contends for the consideration of Restricted Stock Units awarded to the wife over a four year vesting period to be taken into account as financial resources of the wife. I agree.
She will receive them as taxable additions to income and I will consider the wife’s income as elevated in that way in this year and the next as it was in 2011 and 2012.
[10] Omacini& Omacini (2005) FLC 93-218
Accordingly, the asset pool of the parties which combines their actual net interests is:
(A)      The husband  $   847,612
(B)      The wife  $   584,267
Total     $1,431,879

Would it be just and equitable to alter the current interests of the parties in property?

The parties are separated and not divorced. Nevertheless, the agreement between them about financial arrangements which operated during cohabitation no longer meets their circumstances.
There is no question of reconciliation.
The mortgage debt must be addressed. The husband is presently unable to contribute at all. The wife is willing to take over the mortgage debt if she acquires the interest of the husband in the property.
The joint tenancy in the property appropriate to marriage has been severed. The parties are now tenants in common as to equal shares. This is a reflection of their separation. However, the mortgage continues as a joint liability.
After 19 years of a relationship, 15 of those years in cohabitation, the position is this.
The wife is living in the home. She is working fulltime. She is supporting and caring for the parties’ child and maintaining the home. She has made some mortgage payments at a rate negotiated with the bank.
Until May 2013, the wife supported and cared for G. She is a continuing member of the household but since that date she became a legal adult and is now contributing.
There does need to be an alteration of interests to reflect the new arrangements and for the future. The nature of that alteration requires a consideration both of the contributions and future needs of each party.

Consideration of Contributions of each of the parties and of adjustments pursuant to Section 75(2) factors

Initial contributions

The parties both had superannuation interests when they commenced living together in 1994.
The husband had been a public servant since 1980; seven years in a trade position with a government department and the following seven years at another government department as a supervisor.
The wife had worked in the private sector from 1985 to 1991 and had contributed to superannuation in a reasonably modest way. She then became a public servant and had been a member of D Super Fund for three years at the date of cohabitation.
The information supplied by the husband[11] suggests that the husband had about $30,000 in superannuation at cohabitation. The wife’s best estimate was that she too had about $30,000, based on her own analysis of where the fund stands today. However I consider it likely that the wife had somewhat less than the husband, probably no more than half. Accordingly, the superannuation position of the husband could be said to be somewhat stronger than the wife’s at the date of cohabitation.
[11] Affidavit of Husband filed 04/02/2013 Annexure B, p 37
When the parties began living together in 1994, they did so in the husband’s property, a home unit in Suburb L which he had purchased 10 years prior. The purchase price was $33,500. He borrowed $29,000 from a Building Society.
At the commencement of cohabitation, the husband refinanced the unit and borrowed $43,000 to discharge the current mortgage and pay off his credit card debt.
Three years later in September 1997, the unit was sold for $69,500 and the net proceeds of sale were about $28,000. Accordingly after 13 years of ownership, the equity in the property was relatively low.
The significance of the property is that it provided a home for the parties, either for six months on the wife’s evidence or for 16 months on the husband’s. This is an initial contribution by the husband and should be accorded some significance[12].
[12] Pierce v Pierce (1998) 24FamLR 377
However I do not accept counsel’s description as the property being “the launching pad for the parties’ acquisition of property.” It provided a home for a period of time. The parties then rented in a property at Suburb M and the Suburb L property was leased.

Contributions during the relationship

From the outset, the parties shared equally all costs and expenses including the period of renting. There was one exception. The husband had been solely responsible for the mortgage repayments for the Suburb L unit until it was leased. Thereafter rental income paid the mortgage.
In April 1998, approximately half the net equity from the sale of Suburb L was applied to the joint purchase of the parties’ first home together.
That property in Suburb N was purchased for $255,000. A sum of $242,250 was borrowed. The balance of $12,500 came from the proceeds of sale of Suburb L. Probably, although not certainly, the stamp duty and costs of purchase were also drawn from that source. Those costs may have come from savings.
Thereafter all mortgage payments, costs and expenses were shared equally.
The parties had a joint account at St George, into which the husband paid his wages. The wife had an account at Westpac and transferred an agreed amount into the joint account.
Generally it was the wife, although for a period the husband, who managed the parties’ finances.
In May 2001, the parties sold their Suburb N property for $337,000 and applied the majority of the net proceeds ($52,000 plus associated costs of purchase) to the purchase of the Suburb C property which became their current family home. They purchased Suburb C for $460,000, borrowing $408,000 to do so.
In 2003, the loan facility was increased by $100,000 to fund home renovations, a car and their wedding and joint living expenses.
In July 2005 the parties’ only child, F, was born. There was a dispute between the parties over maternity leave for the wife.[13] The unchallenged evidence of the wife is that the husband had said to her “We need your income” and “I do not want any loss of lifestyle as a result of you having this baby”.
[13] Affidavit of Wife filed 30/05/2013, par 37
The wife took six weeks off after F’s birth and returned to work. The husband then commenced six months long service leave to care for F.
The wife suffered depression, her evidence being that “I was miserable leaving [F] each day and arranged with my employer to work from my home for a 12 month period commencing from November 2005.” Those arrangements were put into place.
I accept that the wife provided more of the day to day care for F from November 2005[14] although the husband was also actively engaged in F’s life. The incomes of both parties increased over the years. The wife at all times earned more than the husband with the disparity also increasing.
[14] Affidavit of Wife filed 30/05/2013, pars 42 to 47
During the course of the relationship and until separation, the parties both worked fulltime.
There was no challenge to the evidence of the wife that she was primarily responsible for the domestic work of the household including shopping, cooking, cleaning, ironing and general household tasks. The husband attended to the garden, home maintenance and cleaned the bathroom once per month.
In April 2009 the husband inherited money from his late mother. He applied $174,000 to the mortgage.
Taking into account the initial contribution of the husband, the higher financial and welfare contributions of the wife and the paying down of the mortgage by the husband, I assess the contributions at separation as 55/45 favouring the husband.

Post separation - December 2009 to date of hearing

From 30 December 2009, for a period of about six months the husband was unable to make any contribution at any level due to his injuries.
Immediately after he was injured, the wife made several visits to the hospital to attend to his needs. She negotiated with the travel insurance company in an attempt to obtain assistance with his medical evacuation to Australia. Those calls were made at night after the wife had put the children to bed, as a consequence of the time difference between Australia and European Country A.
During the days, the wife cared for the children and attended at the hospital. The wife spent time on the phone or internet with Australia.
The parties had intended to leave European Country A on 4 January 2010 to return to Australia soon after from Amsterdam. Those arrangements were all cancelled with no refund. The wife was expected back at work on 7 January 2010.
There were considerable difficulties in arranging for the husband’s travel back to Australia. An amount of $150,000 was drawn down on the parties’ mortgage account in anticipation of having to pay at that level for a commercial transfer.
Subsequently the wife organised a travel companion for the husband, the mother of a person known to both parties whom they paid to accompany the husband back to Australia with her own return. This reduced the cost of the husband’s transportation to a little over $13,000. The wife was able to pay the funds back into the mortgage account, less those actual costs.
The wife and children returned to Australia on 13 January 2010. Throughout January, the wife describes herself as emotionally very upset:
I could not socialise or talk to people other than organising school uniforms and school needs for the children and arranging medical appointments.
The wife extended her leave period by about three weeks. G is described as very teary and not very communicative and F is described as upset and regularly asking “where is my dad.” Nevertheless the wife attended to the preparation of F’s attendance at school for the first time and the organisation of G for attendance at her new school commencing in

year 9.
On 28 January 2010, a Detective Senior Constable of Police visited the home of the wife and provided a copy of an AVO against the husband for G’s protection[15].
[15] Affidavit of Wife filed 30/05/2013, Annexure ‘U’
The wife returned to fulltime work in February 2010.
When F first started school, his mother deposes that his behaviour was erratic, “…he had problems with concentration and dealing with tasks and activities he was not able to immediately grasp”[16].
[16] Affidavit of Wife filed 30/05/2013, par 127
The wife also was unable to concentrate at work, was unable to meet her employer’s utilisation targets and regularly had to leave work to attend medical appointments for herself, F and G. The team she supervised did not meet their targets and were not paid any bonus. The wife decided she could not continue effectively at fulltime work and moved down to three days in the office each week. She continued to work from home on the other two days. Her income reduced accordingly.
In October 2010 the wife increased her hours to four days a week and in January 2011 returned to fulltime work.
The wife has volunteered at school events for F, provided reading assistance for his class and has attended open days, sports carnivals, the Halloween disco and other such events. I accept that she has not been able to take any annual leave because her leave has been utilised to meet F’s needs at school and her own obligations to attend court for the husband’s criminal trial.
In mid-2010, the husband returned to work earning approximately $87,000. He made no contribution to Suburb C, including the mortgage, maintenance costs or outgoings. The wife packed the husband’s personal belongings and placed them in storage, documented the contents and provided the list and keys to a friend of the husbands. She did so at her own expense.
The husband arranged for a moving van and removed half of the household furniture, including a bedroom suite, lounge, dining table, chairs, bedding, cookware, cutlery and crockery[17].
[17] Affidavit of Wife filed 30/05/2013, par 140
The husband provided child support for F in the assessed amount of $125.40 per week commencing 1 November 2010.
When the first trial was abandoned after a week when the Judge became ill, the wife returned to work. She again took annual leave in January when the second trial ran for three and a half weeks. Using her annual leave in this way meant that F attended holiday care during school holidays.
When the September trial was adjourned, again the wife had arranged three weeks leave and returned to work after one week.
In December 2010, the wife again took her annual leave.
After the trial the wife was served with a Notice of Severance of joint tenancy in respect of Suburb C.[18] The wife has continued to provide all of F’s care. He attends before and after school care, other than on Thursdays when he attends drama classes as an extra-curricular activity.
[18] Annexure ‘EE’ to Affidavit of Wife filed 30/05/2013.
The wife and F arrive home each working day about 6.30 pm. The wife then cooks dinner. The wife, F and G eat together, F does his homework, reads to his mother, is bathed and put to bed. After that time the wife attends to washing and cleaning assisted by G increasingly.
The wife has made efforts to maintain F’s connection with his father. She organised supervised visits for him when his father was in hospital in Sydney. During the period when the husband was staying with his sister’s home recuperating in Town O, the wife organised communication via Skype.
As previously stated, between September 2010 and December 2012, F has seen his father on about 13 occasions. The wife estimates that on about half of those occasions she initiated the contact and the other half was requested by the husband.
F has suffered night terrors[19] and woke screaming on average three nights a week. This has not reduced to some extent. He also sleepwalks.
[19]Affidavit of Wife filed 30/05/2013, par 166
I have no reason not to accept the evidence of the wife that she has continued to reassure F that his father loves him and is “getting better” and to alleviate his concerns about his father in prison. She attempts as much as possible, to organise playtime for F with his friends at weekends which is impossible during the working week.
Financially the wife has been solely responsible for council rates, water rates, electricity accounts, home insurance, motor vehicle registration, insurance and maintenance, telephone, internet and Foxtel costs. She pays for before and after school care for F five days a week. The wife has her own medical expenses. She continues to attend on a general practitioner after the depression she suffered in early 2010. She arranges for F to see a psychologist in relation to his behavioural problems and night terrors.

I accept that the wife has, whenever possible, also contributed to the mortgage.[20] She has not utilised the redraw facility and has negotiated a minimum payment with the bank. She was pressed by the husband to pay all of the mortgage payments and this position was maintained before me. I accept that the wife was not in a financial position to do so.
[20]Affidavit of Wife filed 30/05/2013, par 172
Her financial statement reveals her salary or wage as $2,729 per week gross, elevated to $3,338 per week as a result of the RSU’s previously discussed in these reasons. These add an additional gross amount of $63,797. Excluding the mortgage payment from her personal expenditure,[21] she has obligations of about $3,400 per week.
[21]Part G & N of Financial Statement of Wife filed 05/09/2013.
The wife was not challenged on her detailed evidence of weekly expenses and I accept that although she does indeed earn a comfortable income, especially with the present inclusion of RSU’s, she is fully extended in meeting all the relevant costs of her household. There should be an adjustment in favour of the wife to reflect her very significant contributions financially and to the welfare of the family, particularly F and G, but also in direct assistance to the husband initially and the maintenance of the parties’ asset. This adjustment should be in the order of 10 to 15 per cent.
I take into account the continuing benefit to both parties of the husband’s inheritance monies, keeping the home mortgage in advance throughout the period.
The wife has had the benefit of living in the home, whilst at least for the period from July 2010 to December 2012, the husband has paid rent. However, the overwhelming contribution post separation has been by the wife and an adjustment of 10 per cent is appropriate in the circumstances. Therefore at date of hearing, the contributions between the parties favour the wife over the husband in the ratio 55/45 per cent. This analysis was supported by counsel for the husband at the commencement of the proceedings, although resiled from during submissions.

Section 75(2) Factors

I take into account the following matters of those set out in s 75(2) of the Act.

Age and state of health

The husband is 55. His physical health is good, however he has suffered serious injuries and may be required to have further surgery in the longer term.
The wife is 44 and apparently in good health, having recovered from reactive depression.

Capacity for employment

Both parties have the physical and mental capacity for appropriate gainful employment. The husband has disqualified himself from ongoing employment through his conviction. He was able to return to work despite his injuries and made the transition to a longer journey to work as part of an assisted program. It is very clear on the face of the document from the husband’s employer, that it is the fact of his conviction that has prompted the decision to terminate his employment[22].
[22] Exhibit 3, par 3 of letter to husband’s solicitor 19/09/2013

Care and control of the child

The wife has had the care and control of the one child of the marriage over the last four years. She will continue to have sole responsibility for his care, at least until December 2014. Thereafter, it is most likely the child will continue to live with her. There is certainly a wish on the part of the husband to re-engage in a relationship with his son. However, given the passage for five and a half years at that time with very limited contact, the transition may be quite slow and need careful management.

Commitments

The wife is committed to her present employment in order to maintain herself and the parties’ child F.
The wife has had a responsibility to support G, who came into the parties’ household by agreement of the parties. She is now aged 18, employed and contributing to the household but still dependent on her aunt for accommodation.

Eligibility for Government benefits

It is likely on his release from prison that the husband will be eligible for some Commonwealth allowance or benefit until he is able to obtain employment, if he is.
Both of the parties have superannuation. The wife will not be able to access her superannuation for another 11 years at the earliest and will continue to contribute to the fund at the statutory rate.
The husband has superannuation benefits which may be reduced by the payment of personal debt for legal fees.

Standard of living

The parties are separated and not divorced. The wife will maintain the standard of living that she enjoyed prior to separation, except that she will be solely responsible for supporting the parties’ child and meeting all the expenses of the household. The husband will be in an entirely different position where it is unlikely, even if he commutes his superannuation to a lump sum, that he will be easily able to purchase property. He is likely to rent to re-accommodate himself.

Creditors

The husband’s present and previous solicitors, his sister and others are creditors of the husband. The order made provides for the husband to transfer his unencumbered interest in the matrimonial property. This will require the husband to pay his debts through commuting his superannuation, or otherwise reaching an accommodation with his present solicitor to whom he has given a charge over his interest in the Suburb C property.

The duration of the marriage

The marriage has endured for 10 years. The parties were married in 2003. However the relationship endured for 15 years, from 1994 to 2009. Each party was in well remunerated work prior to separation.

The need to protect a party who wishes to continue that parties’ role as a parent

The mother has taken up the responsibility of caring for F and wishes to continue to do so. In terms particularly of time, she is fully extended by working fulltime and caring for the child alone. Remaining in the family home will enable her to continue to do so in the pattern that has been established.

Child support

The husband paid child support between November 2010 and December 2012 in the assessed amount. In the event that he is unable to find employment, which is a real possibility, the wife will be entirely without child support assessed or otherwise. In the event that the husband finds work at a similar level of remuneration as he had in the government department, the wife will have the benefit of the assessed amount, probably not less than $125 a week.

Any other fact or circumstance

The husband has significant outstanding debts. The majority of them are for legal costs in these Family Law proceedings, both legal expenses in the ordinary way and two costs orders against him. It was urged on the Court that the criminal costs should be taken into account pursuant to s 75(2), it having been legitimate for the husband to raise funds for legal representation in his defence.
There is some force in this argument. In a practical sense, the figures put before the Court were estimates in respect of two of the personal loans. The personal loan by the husband’s sister, Ms H, for $20,000 was unchallenged as to its amount and her expectation that it would be repaid. I consider there should be a very modest adjustment in the order of two and a half per cent for the fact that the husband has criminal costs to repay.
Overall an adjustment is required for the future to enable the wife to go on providing a home for the child. She has a substantial income which will reduce after the expiry of the four year period of the vesting of RSU’s. She has a capacity for work and an ability to earn at a higher level than that of the husband.
The husband has a capacity to work and earn at the level at which he was earning in January 2013 when his employment was suspended. He is most unlikely to retain his current employment as a result of his conviction. He is unlikely to find employment at the same level due to the sharing of information within the public sector about his conviction. He may find employment in the private sector. It is an uncertain position.
An adjustment in the order of 15 per cent to address the wife’s obligations to the parties’ child is called for. Overall, taking into account a small adjustment for the husband’s criminal legal costs and the obligations of the wife, there should be an adjustment in the order of approximately 10 to 15 per cent overall.
By each party retaining what is currently in their possession and the wife acquiring both the interest of the husband and all of the debt secured on the home, the division between them falls at 67/33 per cent. It would be artificial and unrealistic to do other than confirm the arrangement at that percentage division.
By these alterations:
(A)      The wife will retain and acquire interests as follows:
1.The whole of the interest in Suburb C  $1,000,000
Less the whole of the obligation under the mortgage (to be refinanced)  $ 360,405
$ 639,595
2.Items retained 2-5 incl, 10(a), 8-10, 12, 13
Less The car loan debt to St George ($11,372)  $ 61,318
$700.913
Plus Superannuation  $203,152
Total$904,065
(B)      The husband will retain interests as follows:
Superannuation  $517,554
Items 6, 7 and 11  $10,261
Total$527,815
Net asset pool  $1,431,880
The division of the net asset pool is:
·to the husband 37 per cent;
·to the wife 63 per cent.

Is the alteration of interests and transfer of property just and equitable?

The husband will have debts to pay in relation to costs. Not less than $264,330 or more depending on the assessment of costs orders against him. If those debts are discharged without compromise the husband would have:
a)Chattels $10,261
b)Superannuation $253,224 or less
It is a harsh outcome for him after a lifetime of hard work and sensible efforts to acquire wealth. However, the fact of the husband’s conviction is critical.
As a result of his conviction:
(1)He has almost certainly lost his stable employment with the government department.[23] He has a capacity to continue in his job as he did until 2012. He wants to do so. It is highly unlikely. He may find management work but probably not at his earlier level of remuneration.
(2)He will be unlikely to contribute significantly to the cost of raising F, including clothes, food, entertainment, travel, after school care and education.
[23] Exhibit 3
The wife will have:
a) the equity in the former matrimonial home and its contents - $649,595.
She will have a secure home for herself and F depending on her ability to maintain her employment. She has the capacity to do so.
She will be solely responsible for the mortgage ($360,405) outgoings and maintenance of the property.
She will have other debts. The Westpac personal loan, the car loan and a small credit card debt. The majority of her cash is committed to the balance of legal fees. There may be delay in receiving the payment of costs orders.
To preserve the home for F is of particular significance given his emotional fragility. The wife herself has suffered depression but has managed to work to support the family despite this ill health. Keeping him in his own home provides stability for F.
In all of these circumstances and for the reasons given, I do consider that alteration of interests which equates to a proportional sharing 67 per cent to the wife and 33 per cent to the husband is a just and equitable outcome.
Orders are made accordingly.

Costs of interim Application

On 28 August 2013, the proceedings were relisted at the request of the husband. On that day an oral application was made for the appointment of a single expert. This was said to be in reliance on Order 8 of Orders

17 April 2013.
1.…….
4.In the event that either party wishes to make an Application for a joint Single Expert, such Application can be made on 7 days notice to the other party and to the Court.
5.………
6.………
7.………
8.I grant the parties leave to apply to relist the matter in relation to the implementation and direction of these Orders on 7 days notice by arrangement with my Associate.
There was no Application in a Case or supporting affidavit.
The stated purpose of the relisting was objected to by the wife on the basis that:
(a)There was a specific provision for making such an Application (order 4 of the April 2013 Orders).
(b)Even if properly brought it was too late for such an application to be made.
(c)There was no issue for a single expert to determine.
The position of the wife was in all respects correct.
However, I was told by counsel for the husband that his instructions were that the employment of the husband had been terminated, that the wife had been advised accordingly and that the situation was urgent for the husband.
Leave was granted to the husband to urgently file and serve the relevant Application in a Case noting that the affidavit in support was to contain evidence of communication to the wife of dismissal.
On 9 September 2013, the Application in a Case came before me. It was supported by an affidavit of 130 pages by the Husband’s solicitor. It became clear that the employment of the husband had not been terminated. The process of considering his termination was continuing.
The Order sought was as follows:
(1) That Dr [P] (or another appropriately qualified Expert nominated by the Court) be appointed as a Single Expert to prepare a report for use in the proceedings as to the Husband’s future work capacity.
(2) Such further or other orders as the Court deems fit.
I unreservedly accepted submissions on behalf of the wife that future work capacity was not an issue. The husband had returned to work and very much wished to keep his employment. His solicitor was instructed to make appropriate submissions to his employer on that basis.
The issue was employment not capacity. The husband’s conviction was likely to put him out of work.
I dismissed the application noting that I was inclined to grant costs to the wife, but would reserve that decision to the final hearing in order to consider financial hardship.
I do so now. The husband has sufficient resources to meet the costs order but should be allowed time to pay in the circumstances. Three months is allowed.

I certify that the preceding one hundred and seventy-six (176) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cleary delivered on 1 November 2013.

Associate:

Date: 1 November 2013

[2013] FamCA 856

Key Legal Topics

Areas of Law

Family Law

Civil Procedure

Property Law

Legal Concepts

Costs

Remedies