Cummins and Creighton (No. 2)
[2017] FamCA 858
•27 October 2017
FAMILY COURT OF AUSTRALIA
| CUMMINS & CREIGHTON (NO. 2) | [2017] FamCA 858 |
| FAMILY LAW – PROPERTY – Settlement in relation to marriage –Where the husband and wife were married for 10 years and have a child who has been diagnosed with severe developmental delay and autism – Where it is just and equitable for the Court to make orders – Consideration of s 79 of the Family Law Act 1975 (Cth) – Where the wife made greater initial contributions – Consideration of s75(2) of the Family Law Act (Cth) - Where the wife is the primary carer of the children and has significant future needs –Where an order is made for the wife to receive 73 per cent of the property pool. |
| Family Law Act 1975 (Cth) – ss 75(2), 79, 79(1), 79(2), 79(4), 106A |
| Bevan & Bevan (2013) FLC 93-545 Pierce & Pierce (1999) FLC 92-844 |
| APPLICANT: | Ms Cummins |
| RESPONDENT: | Mr Creighton |
| FILE NUMBER: | PAC | 4337 | of | 2014 |
| DATE DELIVERED: | 27 October 2017 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Johnston J |
| HEARING DATE: | 6 & 7 July 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Harris |
| SOLICITOR FOR THE APPLICANT: | Michael Vassili Barristers & Solicitors |
| COUNSEL FOR THE RESPONDENT: | Mr Rosic |
| SOLICITOR FOR THE RESPONDENT: | Watts McCray Lawyers |
Orders
Within 28 days the husband do all things and sign all documents necessary to transfer to the wife his interest in the former matrimonial home situated at B Street, Suburb C in the State of New South Wales and being the whole of the land comprised in title reference ...
The wife be declared the sole owner of the Motor vehicle 1 and the Motor vehicle 3.
The husband be declared the sole owner of:
(a) The Motor Vehicle 8;
(b) The Motor Vehicle 6;
(c) The Motor vehicle 2 components; and
(d) The Motor Vehicle 6 components.
Within 30 days each of the husband and the wife do all things and sign all documents necessary to cause the Motor Vehicle 5 and matching chassis and engine number … to be listed for public auction with P Auctioneers (“the auctioneer”) on the following terms and conditions:
(a)at a nominated reserve price of $180,000, unless specifically otherwise agreed in writing by the parties;
(b)to be advertised as recommended by the auctioneer;
(c)to be offered for sale at auction on a date recommended by the auctioneer;
(d)each of the husband and the wife shall be permitted to bid at the auction;
(e)in the event that the vehicle does not sell at auction, it is to be resubmitted to further auctions with the reserve price reduced by five per cent at each subsequent auction until sold and otherwise the provisions of sub-paragraphs 4(a) to 4(d) inclusive herein shall apply.
To facilitate the auction of the Motor Vehicle 5 each of the husband and the wife shall co-operate in every way with the reasonable recommendations of the auctioneer, including:
(a)the husband shall arrange for the Motor Vehicle 5 to be delivered to any place nominated by the auctioneer for the purposes of the auction, such delivery to be undertaken by a registered car carrier holding appropriate insurance for any damage to the vehicle during transit, and the husband shall bear the cost of any such transportation in the first instance, and such costs shall be reimbursed to the husband from the proceeds of sale of the Motor Vehicle 5;
(b)the husband shall make the Motor Vehicle 5 available to the auctioneer or the auctioneer’s representative for the purposes of photographing the vehicle.
Upon the sale of the Motor Vehicle 5 the proceeds of sale shall be paid in the following manner and priority:
(a)in favour of the auctioneer, for any costs and disbursements reasonably associated with the auction and sale of the vehicle including any costs for advertising or promoting the Motor Vehicle 5 prior to the auction;
(b)by way of reimbursement to the husband for the reasonable costs incurred for the carriage of the Motor Vehicle 5 by the registered car carrier to the place nominated by the auctioneer for the purposes of the auction provided that the husband delivers to the wife a copy of the invoice received with respect to the transportation of the vehicle;
(c)24.131 per cent of the balance to be paid to the wife; and
(d)the balance to be paid to the husband.
In the event that P Auctioneers are unavailable to undertake the auction provided for herein, then the parties shall nominate Q Auctioneers to undertake the auction of the Motor Vehicle 5 as provided for in paragraphs 4 to 6 inclusive above.
The husband shall forthwith do all things necessary to ensure the Motor Vehicle 5 is comprehensively insured for damage or loss for a value of $180,000.
The husband and wife are declared the sole owners respectively of all other property and superannuation in their possession and/or control.
Pending transfer of the husband’s interest in the said former matrimonial home the wife shall be responsible for all mortgage payments, statutory rates and charges, other utilities, insurances, outgoings and expenses in relation to the home incurred prior to the date of transfer and shall make all such payments as and when they fall due and the wife hereby indemnifies the husband in respect of all other liabilities incurred prior to the date of transfer.
That in the event that either party refuses or neglects to execute any deed or instrument pursuant to these orders, the Registrar of the Court be appointed pursuant to s 106A of the Family Law Act 1975 (Cth), to execute such deed or instrument in the name of such party and to do all things necessary to give validity to the operation to the deed or instrument.
All exhibits be released.
Both parties have leave to relist these proceedings by arrangement with the Associate to Justice Johnston in relation to the implementation of the orders.
The above orders not commence operation until 14 November 2017.
Both parties have leave to relist these proceedings by arrangement with the Associate to Justice Johnston not later than 13 November 2017 for further submissions in relation only to the form of the orders.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cummins & Creighton (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: PAC 4337 of 2014
| Ms Cummins |
Applicant
And
| Mr Creighton |
Respondent
REASONS FOR JUDGMENT
Introduction
These are final property proceedings. Ms Cummins (“the wife”) and Mr Creighton (“the husband”) commenced cohabitation in December 1995 and married in 1997. They separated under the same roof in March 2006 and the husband moved out of the former matrimonial home on 19 August 2014.
There are two children of the marriage, N born in 2002 and O born in 2004. O has been diagnosed with severe developmental delay and autism.
The parties have been unable to resolve their property dispute and have asked the Court to determine a property settlement for them.
Applications
The wife seeks orders to the following effect:
·The husband transfer to her his interest in the former matrimonial home at B Street, Suburb C;
·The husband transfer to her his interest in the Motor vehicle 5;
·The wife be declared the sole owner of the Motor vehicle 3, the trailer with registration number … and the Motor vehicle 1;
·The wife transfer to the husband her interest in the Motor vehicle 9;
·The husband be declared the sole owner of the Motor vehicle 8, the Motor vehicle 7 and the Motor vehicle 6;
·The wife be appointed the trustee for $21,000 cash held in her parents’ safe on trust for the two children of the marriage;
·Each party be declared the sole owner of all other property and superannuation in their possession or control; and
·Enforcement and machinery orders as specified.
On the other hand, the husband seeks orders to the following effect:
· The husband transfer his interest in the former matrimonial home at Suburb C to the wife upon payment to him by her of $47,500 and the wife thereafter indemnify him in respect of all liabilities in relation to the property;
· Pending transfer of the husband’s interest to her the wife be responsible for all mortgage payments and outgoings in relation to the former matrimonial home;
· In the event that transfer in accordance with the above is not effected, the parties sell the former matrimonial home and pay the net proceeds after payment of the sum of $47,500 together with interest to the husband, to the wife;
· The wife be declared the sole owner of the Motor vehicle 1 and she indemnify the husband in relation to all liabilities in respect of it;
· The husband be declared the sole owner of the Motor vehicle 5, the Motor vehicle 7, the Motor vehicle 8, the motor cycle registration number .., and the trailer 1 (registration number …) and the husband indemnify the wife in relation to all liabilities in respect of these items of property;
· The husband transfer to the wife his interest in the trailer 2(registration number ..) and the wife indemnify him in relation to all liabilities in respect of it;
· Each of the parties be declared the sole owner of all other property in their possession and /or control respectively; and
· Certain machinery and enforcement orders as specified.
A copy of each of the forms of orders sought is included at Annexure “A” to these reasons for completeness.
Background
The husband was born in 1960 and is currently 56 years of age.
The wife was born in 1968 and is currently 49 years of age.
In December 1995 the husband and wife commenced cohabitation.
At the commencement of cohabitation the parties were both employed in the public service.
The wife owned the following assets:
a)An unencumbered property at I Street, Suburb J (“the Suburb J property”) subsequently sold for $125,000;
b)A property at K Street, Suburb L worth approximately $195,000 subject to a mortgage of $184,116 (“the Suburb L property”);
c)Superannuation in the amount of approximately $212,000;
d)Furniture worth approximately $8,000; and
e)Savings of approximately $10,500.
The husband owned the following assets:
a)$25,000 from the proceeds of sale of a property at R Street, Suburb S;
b)A motor bike; and
c)Some superannuation.
In mid-1996 the parties purchased a Motor vehicle 4 for $22,000 using the proceeds of sale of the husband’s property at Suburb S.
In 1997 the parties were married.
From approximately 1997 the husband contributed approximately $250 per month to the financial assistance of his father by way of mortgage payments on a property at T Street, Suburb U. I shall refer to this again below.
In 1997 the wife sold her Suburb J property for $125,000. The proceeds were applied to the mortgage on the Suburb L property.
In 1998 the wife borrowed the sum of $36,000 against the mortgage on the Suburb L property to purchase a Motor vehicle 5 (“Motor vehicle 2”).
In 1999 the wife purchased five bottles of vintage wine in a wooden crate. She later purchased a sixth bottle to complete the set.
In July 2000 the wife purchased a Motor vehicle 2 (“Motor vehicle 2”) for $92,000 using funds borrowed against the mortgage on the Suburb L property.
In October 2000 the wife purchased a Motor vehicle 6 for $9,250 funded from her savings.
In 2001 the wife received redundancy payments in the total amount of $116,116. She also withdrew the sum of $91,874 from her superannuation, approximately $29,000 of which was used to fund an overseas holiday for the parties.
In 2001 the parties purchased a property at B Street, Suburb C (“the Suburb C property”) for $790,000. This property was purchased using the balance of the funds withdrawn from the wife’s superannuation and her redundancy payment secured by way of a mortgage.
In 2001 the Suburb L property was sold for $480,000. The proceeds of sale were used to discharge the mortgages against the property and approximately $293,601 was applied to the mortgage on the Suburb C property.
In 2002 the parties’ first child, N was born.
In 2004 the husband’s father passed away. The property at T Street, Suburb U was sold and the husband inherited a portion of the proceeds in the amount of $70,000.
In 2004 the parties’ younger son O was born.
In 2006 the parties purchased a race car called the Motor vehicle 1 for $26,000. They redrew $25,000 on the mortgage to pay for the vehicle. Restoration works were undertaken at a cost of $90,000 to $100,000.
In March 2006 the parties separated under one roof.
In 2007 O was diagnosed with severe developmental delay and autism.
On 25 March 2007 the wife sold the Motor vehicle 2 for $605,000, the net proceeds of sale being $588,362. Those funds were applied to the restoration of the Motor vehicle, the purchase of a further vehicle (Motor vehicle 8) for $36,750, and to discharge in full the mortgage secured against the Suburb C property. The remaining funds were deposited into a savings account.
In 2009 O began attending a school for children with special needs.
On 19 August 2014 the husband vacated the former matrimonial home.
In July 2014 the Motor vehicle 6 (partially restored), a car trailer, tools, workshop equipment and spare collectable car parts were stolen from a shed on the Suburb C property.
In July 2015 the wife withdrew $7,800 from her superannuation fund, and in July 2016 the wife withdrew a further $7,800 from her superannuation fund, these funds having been paid out “on grounds of severe financial hardship”.
On 20 January 2016 final parenting orders were made by consent providing for the parties to share parental responsibility for the children, for the children to live with the wife and for O to spend time with the husband each alternate Saturday. No time was ordered between N and the husband.
Credit
The Wife
The wife was forthright and responsive in her answers to questions. She conceded that she had not disclosed two withdrawals of cash in May 2014 from a Commonwealth Bank account in the husband’s name which she was also able to operate. These withdrawals came to a total of $21,000 and the wife deposited these cash amounts into her parents’ safe. The wife said that she had been depositing money into this account for the parties’ children each month. The wife conceded that she had not disclosed such funds in her affidavit nor had she included them in the balance sheet. The wife said that she had forgotten about this money.
While I have some reservations about the wife not having been completely forthcoming, generally, I regard her as a witness of the truth.
The Husband
The husband demonstrated a good grasp of detail in his answers to questions during cross-examination but he has been dilatory in filing his income tax returns. He had not filed a return for some years, then apparently brought his tax affairs up to date by filing income tax returns initially to the end of the 2014 financial year. He filed his last tax return at the end of the 2015 financial year. He has not filed an income tax return for the 2016 financial year. I do not regard this as a part of some strategy to cloud his financial affairs but rather, he appears to be somewhat nonchalant about his administrative affairs.
In any event, although there was a somewhat spirited cross-examination and suggestion to him that he had failed to make a full and proper disclosure about his financial circumstances, the evidence did not suggest such.
I regard the husband’s evidence generally to be reliable.
O’s special needs
In March 2007 O was diagnosed by Dr V of the Suburb W Early Childhood Assessment Team as having severe developmental delay and autism disorder. Dr V indicated that O’s condition will be life-long.
Dr V also indicated in 2008 that O’s intellectual and developmental capacity is equivalent to that of an 18 month old child and will not improve. He will have to be cared for during the rest of his life as though he was 18 months old. This means fulltime supervision – he cannot be left on his own.
O is unable to speak. He grunts and makes noises when he is frustrated. But when he wants something, he takes his mother by the wrist and shows her what he wants. For example, he would take her to the microwave, stove or refrigerator to indicate that he is hungry.
O has participated in special programs including to endeavour to assist him to communicate using pictures, unfortunately to no avail.
In 2009, O commenced attending Y Centre, a school for children with special needs.
O suffers from seizures after which he vomits then sleeps for a long time. He also vomits when he becomes anxious. He is incontinent of urine and faeces. A particular behavioural challenge is that he removes his nappy and plays with and/or smears his faeces. Changing his bed linen, mattress protector and all too regularly even the mattress, scrubbing the carpet and furniture which has been soiled are ongoing tasks performed by his mother. On average, O requires four changes of clothes each day because of his soiling, he requires eight to 10 nappy changes per day, and his mattress requires replacing at six to eight month intervals.
O is now 103 kg in weight. Weight gain has been a side-effect of part of the regime of medication that has been prescribed to assist in the management of his disorder.
Given his size and strength, it can be very difficult for his mother to bring about his entry or exit from a motor vehicle if he has a different view.
The applicable law
Sub-section 79(1) of the Family Law Act 1975 (Cth) (“the Act”) provides to the effect that in property settlement proceedings the Court may make such order as it considers appropriate altering the interests of the parties to the marriage in the property of them, or either of them.
Sub-section 79(2) provides that the Court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Sub-section 79(4) sets out various matters which must be taken into account in considering what order (if any) should be made under the section. These matters include direct and indirect contributions (financial and otherwise) by or on behalf of a party or a child to the acquisition, conservation or improvement of any property of the parties, contributions by a party to the welfare of their family including as a homemaker or parent, relevant matters referred to in s 75(2) and the other matters referred to in s 79(4).
The operation of s 79 was the subject of consideration by the High Court in the case of Stanford v Stanford (2012) 247 CLR 108. In this case the majority said (at page 120) in referring to ss 79(2) and 79(4) as follows:
35.… The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
36.The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. … while the power given by s 79 is not “to be exercised in accordance with fixed rules” (24), nevertheless, three fundamental propositions must not be obscured.
The High Court said that the first of these propositions is for the court to identify, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.
The second is that although s 79 confers a broad power on the court, it is not a power that is to be exercised according to an unguided judicial discretion. It must be exercised in accordance with legal principles, including the principles which the Act itself lays down.
The High Court said that the third fundamental proposition is that the question of whether the order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters set out in s 79(4). To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to “conflate” the statutory requirements and ignore the principles laid down by the Act.
And the High Court majority went on to say (at page 122) as follows:
41.… The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.
The parties’ existing legal and equitable interests in property
Balance Sheet Issues
The wife has a suspicion that the husband orchestrated the robbery of the Motor vehicle 6 and a considerable quantity of motor vehicle spare parts which disappeared from the Suburb C property in July 2014. The husband vehemently denied any knowledge or responsibility for such theft. He reported the theft to the police. He said that he had been interstate at the time.
The husband said that he had taken the motor from the Motor vehicle 6 to a Mr Z a couple of weeks before the theft, for work to be undertaken on the motor. The wife said that the husband did not file an affidavit by Mr Z and therefore the Court should draw an inference from this and make an adverse finding against the husband.
As I indicated to the parties after cross-examination of the husband about the matter, it is the wife who bears the onus of establishing that which she asserts. In my view, she has not come anywhere near discharging the onus on her in relation to this even on the civil standard of proof.
The wife also suspects that the husband removed six bottles of vintage wine. The husband denied this. Again, the evidence is not such that I could possibly make an adverse finding against the husband about this.
There was an issue concerning the husband’s withdrawal and use of $100,000. The wife said that in 2009 she suggested to the husband that they place $100,000 into an investment account or term deposit for O’s future. The husband denied this. The wife said that the following month she noticed that $100,000 had been transferred to “the AA bank account” with M Credit Union which she believed was attached to the parties’ joint account. The wife subsequently declared to Centrelink that she owned one half of the $100,000 and Centrelink adjusted her account providing a lower benefit to her.
The husband said that an officer of the credit union had suggested that the parties invest the $100,000 in a term deposit to achieve payment of a higher interest rate. The husband said that he raised this suggestion with the wife. He said that the investment account was a “sub-account” of the parties’ joint account and he assumed, wrongly as it turned out, that the term deposit would be placed in the names of both him and the wife. He said he did not find out for some time that someone at the credit union had transferred the $100,000 to a term deposit in his name only.
At the time the husband moved out of the former matrimonial home in 2014 he withdrew the $100,000. I accept that he spent approximately $20,000 in payment of legal costs of these proceedings, approximately $20,000 to set up a home for himself and approximately $7,000 to $10,000 for costs of his removal and storage costs for motor vehicles for a short period.
There was robust cross-examination about these alleged expenditures but I accept the husband’s evidence about this. Of the $53,000 remaining, the husband said that he had spent the money on general expenses such as a couple of electricity bills, some school fees and general expenses.
It is conceded by the husband that the $20,000 he spent on his legal costs ought to be added back to the pool of available property and I propose to do so. This is in accordance with the principles set out in Chorn & Hopkins (2004) FLC 93-204.
So far as the remainder of the $100,000 (and the interest thereon) is concerned, I accept that it was reasonable for the husband to have spent the money given the fact that he was paying child support (and other expenditure for the wife and children) as well as the costs of supporting himself in a rented property.
Another issue was how the Court should regard the fact that the husband has “cashed out” long service leave entitlements to a total of approximately $106,000 between July 2014 and November 2016. The husband did not explain how these funds were expended. I propose to take this into account pursuant to s 75(2)(o) of the Act.
The parties’ legal and equitable interests in property and superannuation are as follows:
$
1. Former matrimonial home at B Street, Suburb C
1,650,000
2. Motor vehicle 1
47,500
3. Motor vehicle 5
180,000
4. Motor vehicle 6
23,000
5. Motor vehicle 5 components
10,050
6. Wife’s cash in parents’ safe
21,000
7. Motor vehicle 3
2,500
8. Wife’s superannuation
138,000
9. Husband’s Motor vehicle 7 subject of lease
35,000
10. Husband’s Motor vehicle 8
10,000
11. Husband’s legal fees paid (add back)
20,000
12. Husband’s superannuation
494,025
_____________
$2,631,075
The liabilities are as follows:-
| 1. Husband’s Motor vehicle 7 lease | $25,000 |
| _____________ | |
| Surplus | $2,606,075 |
This is net property and superannuation with a total value of $2,606,075.
Sub-Section 79(2)
Sub-section 79(2) of the Act provides:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
In their decision in the case of Bevan & Bevan (2013) FLC 93-545 the Full Court (Bryant CJ and Thackray J) said as follows at page 87,234:
89. In our view, it will be less likely that the separate issues arising under s 79(2) and s 79(4) will be conflated if judges refrain from evaluating contributions and other relevant factors in percentage or monetary terms until they have first determined that it would be just and equitable to make an order.
In the present case, the parties purchased their major asset, which is the Suburb C property, as a home in which they could reside as a family. There has been a complete change of their circumstances since that time. The husband no longer resides in the home and as indicated above is renting separate accommodation.
If the Court did not make an order, not only would the parties’ financial interests continue to be enmeshed but various unresolved issues between the parties would not be resolved and reflected in Court orders. The result would be quite unfair to both parties.
In these circumstances, in my view it would be just and equitable to make an order under s 79 of the Act.
Contributions
As indicated above, the parties cohabited for approximately 10 years, then resided under the same roof for a further approximately eight years to 19 August 2014 when the husband left the former matrimonial home.
At the commencement of cohabitation both parties were working fulltime with the public service. The wife was earning in excess of $62,000 per year and the husband was earning approximately $48,000 per year.
The wife’s property at the commencement of cohabitation consisted of:
·the property at I Street, Suburb J unencumbered which was sold approximately 12-18 months later for $125,000;
·the property at K Street, Suburb L which had a value of approximately $195,000 subject to a mortgage of $184,116;
·a superannuation interest in First State Super with a value of approximately $212,000;
·some furniture worth approximately $8,000; and
·savings of approximately $10,500.
At the same time, the husband’s property consisted of:
·$25,000 from the proceeds of sale of his property at R Street, Suburb S;
·an interest in superannuation with First State Super;
·a motorcycle; and
·some superannuation
The husband used $22,000 of the $25,000 proceeds of sale of Suburb S to fund the purchase of a Motor vehicle 4 for the parties’ use.
The husband worked with the wife and her parents in renovating the Suburb L property, including stripping out the kitchen and installing a new kitchen. An extended garage was also constructed. The wife also worked on these renovations and extensions.
I have referred above to the history of acquisition and sale of properties and motor vehicles and take these into account in assessing the parties’ contributions respectively.
The wife worked fulltime until shortly before the birth of the parties’ elder child, N. In September 2001 she took a redundancy and received a redundancy payment of $86,478 and severance payment, including accumulated leave of $29,638 being a total of $116,116. The wife also withdrew $91,874 from her superannuation. The parties used $28,800 from the superannuation to fund an overseas holiday and paid the $116,116 from the redundancy payment and the balance of the superannuation towards the purchase of the Suburb C property.
In relation to the Suburb C property, the husband installed a large water tank and pump and he and the wife dug trenches. From this time, the husband had to spend a lot of time travelling to and from work because of the distance involved. He would leave home at between 5.30 am and 6.00 am and arrive home at approximately 6.00 pm or slightly earlier on weekdays. But, of course, in these circumstances the major part of the work involved in the care of the children was provided by the wife.
Both parties have made substantial financial contributions, the wife particularly by way of her initial financial contributions and work and the husband mainly from his fulltime work. During the period following the parties’ separation under the same roof in March 2006 until the husband moved out of the former matrimonial home in August 2014, little changed in terms of the manner in which the parties attended to their various responsibilities. The husband continued to live at the home and he continued to deposit his salary into the joint account. He continued to work fulltime and the wife continued to provide the major care for the children.
In 2004 the husband inherited approximately $70,000 from his father’s estate. But it has to be borne in mind that during the period of the parties’ cohabitation until the husband’s father’s death in 2004 the husband contributed to his father’s mortgage repayments and to electricity and rates bills, together with the husband’s sister.
On the one hand, overall, the husband’s financial contributions have well exceeded those of the wife, notwithstanding her substantial initial financial contributions. On the other hand, the wife’s contributions to the welfare of the family and as homemaker and parent to the parties’ two children have substantially exceeded those of the husband in this regard. That is not to say that he has not made significant contributions in this respect because he has. But this is the way that the parties arranged their financial affairs.
These arrangements changed when the husband moved out of the former matrimonial home in August 2014. While he continued to deposit money from his salary to the joint account he also set up a separate account to which he deposited the sum of $2,000 per month for his personal use.
I accept that the husband had always taken an active role in relation to parenting the children. But this changed following separation as indicated above. As indicated above, the husband has not been spending time with N since separation and has had very limited time with O. However, the husband has continued to pay child support in a substantial amount and I shall refer to this below.
It is common ground that the contributions by the wife overall have exceeded those of the husband but there was disagreement about the extent of this. In my view, clearly the initial contributions by the wife are very significant. As indicated above, she brought to this relationship assets with a value exceeding $350,000. As counsel for the wife said, the wife’s unencumbered Suburb J property was really the springboard for the acquisition of the Suburb C property and acquisition of numerous motor vehicles. While I accept there is some force in this, care must be taken to ensure that account is taken of all of the contributions by the parties over the entirety of the relevant period. As counsel for the husband submitted, in Pierce & Pierce (1999) FLC 92-844 the Full Court said as follows:
28. In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife…
There was a long period subsequent to the initial contributions by the wife over which both parties made substantial contributions.
In relation to the contributions made post separation, in my view, those made by the wife have outweighed those made by the husband. I take this view particularly because of the high demands made on the wife by the special needs of O. During the course of the parties’ cohabiting and then continuing to live under the same roof, it was the case that the husband was available and did assist significantly in the care of O. I pause to note that during this period, even though this was the case, in my view, the wife’s contributions in this regard have been outstanding. During the post separation period, with the absence of the husband from residing with the wife and children and in circumstances where there was so little time spent by him with O, in my view, clearly the wife’s contributions as parent in the special circumstances posed by O’s needs have been significantly greater than the contributions made by the husband.
The question becomes what is the appropriate assessment of contributions overall by each of the parties in all of the circumstances?
It was submitted on behalf of the wife that so substantial have been her contributions, particularly by her initial contributions, that the assessment in her favour should be 60 per cent. On the other hand, it was conceded on behalf of the husband that the wife’s contributions overall have been 55 per cent.
In my view, notwithstanding the substantial initial contributions by the wife and her outstanding efforts in respect of O, particularly post separation, an assessment of 60 per cent would be too high and unfair to the husband. At 60 per cent the differential between the parties would be $521,215. A 10 per cent differential such as submitted on behalf of the husband would be $260,607. In my view, that would be too low. A 14 per cent differential would be $364,850. In my view, this would represent the appropriate difference between the parties concerning all their contributions.
Accordingly, I find the parties’ contributions overall have been 57 per cent by the wife and 43 per cent by the husband.
Sub-section 75(2) matters
The husband is 56 years of age and in good health. He is employed fulltime as a manager. He said that he would not be retiring in the near future because he has lots of bills to pay.
The husband’s weekly income is $4,702.21 but he also has the benefit of salary packaging which I understand enables him to salary sacrifice some of the costs of the Motor vehicle 7 which he leases, the costs of the lease being approximately $1,200 per month. His net weekly income after tax is $3,029.46.
The husband’s weekly expenses are set out in his financial statement.
As indicated above, the husband pays substantial child support, the current child support assessment being $3,624.27 per month. In addition, the husband is required to pay N’s school fees at CC School which are $2,385.00 annually. This comes to a total weekly amount of $882.23.
The husband is in a relationship with a Ms DD. He has provided her with some modest financial support from time to time.
I also take into account the fact that since he left the former matrimonial home the husband has “cashed in” long service leave credits and received a total amount therefore of approximately $106,000.
On the other hand, the wife is 49 years of age and not employed in income-producing work. She is in good health. She receives total weekly income of $1,450.26. This comprises the Carer’s Allowance of $501.30, the Family Tax Benefit of $115.36 and the child support paid by the husband.
Her weekly expenditure is as set out in her financial statement being $1,375.16 per week.
As indicated above, the wife has the care of both of the children. It appears that sadly, the relationship between N and his father has broken down. As I have said, they spend no time together. O has only spent a few occasions with his father since the husband moved from the former matrimonial home. On all indications to date, this unfortunate situation is likely to continue for the foreseeable future. So the wife will probably continue to parent these children without the physical support of the husband.
There is no issue that this is a case in which to arrive at a just and equitable order the Court will need to make a significant adjustment of the available property in favour of the wife.
The husband will be able to work fulltime for quite some years on present indications. He appears to have secure employment and he should be able to continue to contribute to his superannuation. He is paying a substantial amount of child support however he does not have the responsibility of the primary care of a child with severe disabilities and future needs.
The wife does not have any real capacity for employment because she is working very hard indeed to care for O. I have referred above in some detail to O’s situation.
In this regard, I note that in R & R [2004] FamCA 388 the Full Court were considering relevant s 75(2) matters where the two children of the marriage, eight and seven years of age, suffered from quite severe disabilities, one suffering from an autistic spectrum disorder and the other a specific language disorder akin to autism. The Full Court accepted that these children had various specific needs. The Full Court noted that the wife had the primary responsibility for these children with severe disabilities and that she would be primarily responsible for the care of the children in the future. The Full Court described her future obligations as onerous and ultimately made a significant adjustment based on s 75(2) matters taking account of this and various other matters.
I accept that in the case of Clauson and Clauson (1995) FLC 92-595 the Full Court of this Court indicated trial judges need to consider the value of the adjustment in real terms. The Full Court said at page 81,911 as follows:
There is, we think, at times a tendency to assess s. 75(2) factors in percentage terms without considering its real impact, and we think there is legitimacy in the views expressed in more recent times that the Court has tended to operate in this area within artificially delineated boundaries. That is, it appears almost to be inevitable that the s. 75(2) factors will be assessed in a range between 10% and 20%. A number of cases will justify an assessment outside those parameters and in any event it is the real impact in money terms which is ultimately the critical issue. [emphasis added]
It is conceded by the husband that an appropriate adjustment would be 15 per cent of the available property and superannuation. But it is submitted on behalf of the wife that the adjustment required would be 17 per cent. An adjustment of 16 per cent would be a differential of 32 per cent which would be $833,944. In my view, bearing in mind that there is already a differential between the parties based on contributions of $364,850, an adjustment to take account of all relevant s 75(2) matters of 16 per cent would be appropriate.
Conclusion and fourth step
The wife is to have 73 per cent of the property and superannuation available for division between the parties. This is property and superannuation with a value of $1,902,435 (73 per cent of $2,606,075 = $1,902,435).
The parties agree that the wife is to have the following property:
$
1. Former matrimonial home at B Street, Suburb C
1,650,000
2. Motor vehicle 1
47,500
3. Motor vehicle3
2,500
4. Cash in parents’ safe
21,000
5. Wife’s superannuation
138,000
_____________
$1,859,000
If the wife is to achieve property and superannuation with a value of $1,902,435 she would require a payment of $43,435 ($1,902,435 - $1,859,000 = $43,435).
On the other hand, the husband is to have 27 per cent of the available property and superannuation which would be property and superannuation with a value of $703,640 (27 per cent of $2,606,075 = $703,640).
The husband would have the following:
$
1. Motor vehicle 5 (sale proceeds)
180,000
2. Motor vehicle 8
3. Motor vehicle 7
4. Motor vehicle 5 components
5. Motor vehicle 6 components
6. Husband’s legal fees (add back)
10,000
35,000
10,050
23,000
20,000
7. Superannuation
494,025
_____________
$772,075
But the husband’s Motor vehicle 7 is subject to a liability being the lease of $25,000.
Accordingly, on this basis the husband would have property and superannuation with a value of $747,075 ($772,075 - $25,000 = $747,075).
If he was to pay the wife $43,435 this would leave him with property and superannuation with a value of $703,640 ($747,075 - $43,435 = $703,640).
As I informed the parties during the trial, I propose to order the sale of the Motor vehicle 5. This is because such is the intrinsic value of it to each of them that both parties have a very strong desire to retain the vehicle. In my view, there would be no basis upon which this Court could fairly choose between the parties regarding which one of them should have ownership of the vehicle. They can both have the opportunity to bid at an auction for the vehicle.
There is no obvious source from which the husband could pay $43,435 to the wife, apart from the proceeds of sale of the Motor vehicle 5. From the net proceeds of sale of the Motor vehicle 5, the wife will be paid the proportion which $43,435 represents in relation to $180,000 which is 24.131 per cent.
One would hope that the wife would be able to retain the former matrimonial home as a residence for herself and the boys. But it is difficult to feel confident about this especially given that her outstanding legal costs are in excess of $300,000, which appears to be a very high amount. She has also been borrowing money from relatives and friends. It might become necessary for her to sell the home and downsize.
On the other hand, under the orders I propose the husband’s major asset will be his superannuation. He will have to sell the Motor vehicle 5 and although he will have the proceeds of sale he will be required to pay the wife the sum of $43,435. He has outstanding legal costs to pay in excess of $40,000. So there will be little property for him to enjoy. But he will have his substantial income although this will continue to be reduced by the amount of child support he has been assessed to pay, and he will have his superannuation of $494,025. It is difficult to see that the husband will be able to purchase a home for himself, at least for a few years.
So there will be difficulties to be faced by each of the parties upon the making of the orders.
In my view, the orders I propose will be just and equitable in all the circumstances of this case.
I certify that the preceding one hundred and twenty five (125) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johnston delivered on 27 October 2017.
Associate:
Date: 27 October 2017
ANNEXURE “A”
The Wife
That within 28 days of the making of these Orders, the Husband do all such acts and things and sign all necessary documents so as to transfer to the Wife all his right, title and interest in the former matrimonial home situated at [B Street, Suburb C] in the state of New South Wales and being the whole of the land comprised in title reference ....
[Deleted]
That other than as otherwise set out in these Orders, the parties have the sole right, title and interest in any other property which is at the date hereof in their possession, title or name and they shall be solely liable for and indemnify the other against any personal liabilities.
That within 14 days of the date of these Orders, the Husband do all such acts and things and give all consents and execute all documents and writings necessary to transfer to the Wife all his right, title and interest in the following:-
(a)the [Motor vehicle 5] be transferred to the wife; and
(b)[deleted]
and thereafter the Wife is declared solely entitled to the same.
That the Wife be declared solely entitled to the following:-
(a)the [Motor vehicle 3] remain with the Wife;
(b)the trailer [1] with registration number … remain with the Wife; and
(c)the motor vehicle known as “the Motor vehicle 1” remain with the Wife.
That within 14 days of the making of these Orders, the Wife do all acts and things and give all consents and execute all documents and writings necessary to transfer to the Husband all his right, title and interest in the following:-
(a)the [Motor vehicle 9] unregistered with VIN Number …
and thereafter the Husband is declared solely entitled to the same.
That the Husband be declared solely entitled to the following:-
(a)[deleted]
(a)the [Motor vehicle 8] with Registration …;
(b)the [Motor vehicle 7] with registration …; and
(c)the [Motor vehicle 6] motor with engine number …, gearbox and 9 inch diff.
The Wife be appointed as the Trustee for the sum of $21,000 cash held in the safe of her parents, to hold such monies on trust for the benefit of the children [N] and [O].
That in the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to section 106A of the Family Law Act 1975, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed or instrument.
That within fourteen (14) days from the date of these Orders, the motor vehicles listed in paragraphs 4(a) and 4(b) herein be delivered to the Wife by the Husband.
To give effect to Order 10, the Husband shall organise a licensed and insured carrier to transport the motor vehicles to an address as nominated by the Wife in their present condition. The motor vehicles and car parts are to be delivered to the Wife’s nominated address within 14 days from the date of these Orders. The Husband is to pay all costs associated with transporting the Wife’s motor vehicles and car parts to her nominated address.
NOTATIONS
A.That the parties agree that as far as it is practicable to do so that the Orders are made having regard to the provisions of Section 81 of the Family Law Act 1975 with a view to determining for all time the financial relationship between the parties and avoiding further proceedings between them.
B.The court notes that the parties have for the purpose of finally determining the financial relationships between them and to avoid further proceedings between them agreed as follows:
(1)Subject to the approval of the Supreme Court of New South Wales pursuant to the legislation relating to the release of rights to apply for a family provision Order, the Wife and Husband each releases their rights to make an application in relation to the estate of the other pursuant to such legislation;
(2) The Wife and Husband each gives that release in consideration of the other terms of this agreement;
(3)The Wife and Husband acknowledge that it is to their advantage in the light of the terms of this agreement to grant the release;
(4)The Wife and Husband acknowledge the terms of this agreement and that they have taken into account the position of the other in the event of the death of the other;
(5)The Wife and Husband accept that for the purposes of the Act relating to the release of rights to apply for a family provision order, the provisions of this agreement including this release are fair and reasonable;
(6)At any time after the execution of this agreement the Husband or the Wife or their legal representative may request the other party or their legal representative to join in at the cost of the one requesting an application to the court for the approval of this agreement to relinquish all claims under the Act relating to Orders for family provision. If such a request is made the other covenants to comply with such a request and to do all things reasonably necessary to obtain the approval of the Supreme Court at the cost of the one requesting.
C. [deletion] the Wife contend that the items of property listed in this paragraph were stolen from the former matrimonial property in July 2014:-
(1)2 post car hoist;
(2)Air compressor;
(3)Engine hoist and stand;
(4)Spare genuine full set … wheels (1);
(5) Spare genuine full set … wheels (2);
(6)Spare genuine … shaker assembly (1);
(7)Spare genuine … shaker assembly (2);
(8)[deleted]
(9)[deleted]
(10)Car parts 1;
(11)Car parts 2;
(12)Car parts 3;
(13)[deleted]
(14)Car parts 4;
(15)Car parts 5;
(16)Car parts 6;
(17)Car parts 7;
(18)Car parts 8;
(19)Car parts 9;
(20)Car parts 10;
(21)Car parts 11;
(22)Car parts 12;
(23)Car parts 13; and
(24)Trailer 3 … with registration number … and chassis number …
(25)[Motor Vehicle 6]
The Husband
The Court grant leave for an order by way of alteration of property interests pursuant to s. 79 be made in terms of paragraphs 2 to 16 of this document in order to address the consequences of the breakdown of the marital relationship and the injustice that would occur given the circumstances of the relationship if legal and equitable title were not altered.
That within 6 weeks of the date of these Orders each party shall do all things necessary to cause the following simultaneously:
2.1Transfer of the property situated at and known as [B Street, Suburb C] being the whole of the land contained in Folio Identifier … (“the property”) to the sole name of the Wife at the Wife’s cost, such that the Husband shall sign all documents presented to him by the Wife and the Wife shall do all other things necessary for such transfer; and
2.2Payment by the Wife to the Husband in the sum of $47,500.
AND the Wife shall indemnify and keep indemnified the Husband in respect of all liabilities in relation to the property whenever and however arising.
Pending transfer of the property provided for in Order 2 the Wife shall be responsible for all mortgage payments, statutory rates and charges, other utilities, insurances, outgoings and expenses in relation to the property incurred prior to the date of transfer and shall make all such payments as and when they fall due and the Wife hereby indemnifies the Husband in respect of all other liabilities incurred prior to the date of transfer.
That in the event that the property has not been transferred and payment made in compliance with Order 2 then within a further 14 days each party shall do all things necessary to list the property for sale by private treaty with a Real Estate agent agreed between the parties and in default of agreement, as determined by the President of the Real Estate Institute of NSW or his or her nominee, at a price to be agreed between the parties and failing such agreement to be determined by the President of the New South Wales Division of the Australian Property Institute or his/her nominee and that the proceeds of sale shall be disbursed as follows:
4.1In payment of agents commission and advertising expenses and legal expenses of the sale;
4.2In payment of costs incurred in relation to the nomination of a real estate agent (if any), in payment of costs incurred in relation to the nomination of a solicitor (if any) and in payment of costs in relation to determination of value or selling price by the President of the New South Wales Division of the Australian Property Institute or his/her nominee (if any).
4.3In payment to the Husband of the sum of $47,500 together with interest on that sum calculated in accordance with the Family Law Rules from the date of these orders until the date of receipt of such monies by the Husband.
4.4In payment of the balance then remaining to the Wife.
That as between the parties, the Wife is hereby declared to be solely entitled to the [Motor vehicle 1], and the Wife shall indemnify and keep indemnified the Husband in relation to all liabilities in respect of this motor vehicle whenever and however arising.
That as between the parties, the Husband is hereby declared to be solely entitled to the [Motor vehicle 5], the [Motor vehicle 7], the [Motor vehicle 8], the …Motorcycle registration number …, and [trailer 1] (registration number …), and the Husband shall indemnify and keep indemnified the Wife in relation to all liabilities in respect of these motor vehicles and trailer whenever and however arising.
That within 30 days of the date of these Orders the Husband shall do all things necessary to cause the [trailer 2] (registration number …) to be transferred to the sole name of the Wife and the Wife shall hereby indemnify and keep indemnified the Husband in relation to all liabilities in respect of the motor vehicle and the trailer whenever and however arising.
That, as between the Husband and Wife, and subject to the above Orders the Husband and Wife shall each respectively retain all interest in and entitlement to:-
8.1All personal property now in his/her respective possession or control.
8.2All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively.
8.3All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
Pursuant to Section 81 of the Family Law Act the parties intend these Orders to finally determine all financial relations and issues between them and avoid further proceedings between them.
That each party shall do all things necessary including providing all consents to give effect to these orders in the time periods prescribed in these orders.
That in the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these orders, then the Registrar of the Court shall be appointed pursuant to Section 106A of the Family Law Act to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
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