D and D
[2001] FMCAfam 132
•19 June 2001
FEDERAL MAGISTRATES COURT OF AUSTRALIA
D & D [2001] FMCAfam 132
PROPERTY SETTLEMENT – Dispute as to value of home – whether payments from husband’s parents was a contribution or a loan – s 75 (2) factors – whether lack of medical evidence produces a finding that the wife is unable to work – costs – circumstances in which offer came to attention of party.
| Applicant: | L D |
| Respondent: | M N D |
| File No: | ZM 3201 OF 2000 |
| Delivered on: | 19 June 2001 |
| Delivered at: | Melbourne |
| Hearing Date: | 13, 14, 15 June 2001 |
| Judgment of: | Bryant CFM |
REPRESENTATION
| Counsel for the Applicant: | Ms Tulloch |
| Solicitors for the Applicant: | Tolhurst Druce & Emmerson Solicitors |
| Counsel for the Respondent: | Ms Phelan |
| Solicitors for the Respondent: | Testart Robins Solicitors |
ORDERS
THAT the Husband pay to the Wife the sum of $245,128.00 (“the payment”) on or before the 4th day of August 2001.
THAT contemporaneously with the payment, the Wife do all things necessary to transfer to the Husband, at his expense, her right title and interest in the former matrimonial home situate at 1 B Court, D in the State of Victoria (“the property”), and the Husband indemnify the Wife against all liability in relation to the property.
THAT the Husband do all acts and things necessary and sign all documents necessary to transfer to the Wife or at her discretion, any entitlement in the D superannuation fund and any costs incurred as a result be borne equally between the parties.
THAT the Husband advise the Wife within 14 days if he intends to make the payment or alternatively if he requires a sale of the property.
THAT in the event that the Husband advises the Wife that he requires a sale of the property or in the event that the payment is not made on or before the due date, the parties forthwith do all acts and things necessary to place the property on the market for sale with an agent and at a price to be agreed between the parties and in default of agreement there be liberty to apply.
THAT from the net proceeds of the sale, the parties disperse the funds as follows:
a)in payment of costs and expenses of sale;
b)in payment to the Wife of a sum representing 57.67%;
c)in payment to the Husband of the balance; and
d)the Husband pay or receive any adjustment of rates at settlement.
THAT the Wife transfer to the Husband or his nominee any shareholding, directorship or other interest of whatsoever nature she may have in the company W V Marketing Pty Ltd at his expense and the Husband indemnify her in relation to any liability of whatsoever nature arising from her involvement in the said company.
THAT the Husband transfer to the Wife at her expense, any interest he has in the Honda Accord motor vehicle.
THAT the Wife transfer to the Husband at his expense, any interest she has in the Nissan Patrol motor vehicle.
THAT the Husband transfer and sign to the Wife his right title and interest in the furniture and chattels in the schedule annexed to these Orders headed “Wife” and deliver up the said chattels as soon as is practicable.
THAT the Wife transfer and sign to the Husband her right title and interest in the furniture and chattels in the schedule annexed to these Orders headed “Husband” and deliver up the said chattels as soon as is practicable.
THAT unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these Orders;
b)each party be solely entitled to the exclusion of the other to any monies standing to the credit of the parties in any bank account;
c)subject to these Orders, each party forego any claims they may have to any superannuation benefits belonging to or earned by the other;
d)insurance policies remain the sole property of the owner names thereon; and
e)any joint tenancy of the parties in any real or personal estate is hereby expressly severed
IT IS FURTHER ORDERED BY CONSENT
THAT the Wife and the Husband have joint responsibility for making decisions about the long term care, welfare and development of the children of the marriage A R D born on the 9th day of August 1991 and J F D born on the 28th day of December 1995.
THAT the Wife and Husband have sole responsibility for making decisions about the day-to-day care, welfare and development of the said children during periods when the said children are living with them (except as otherwise provided for in these Orders).
THAT the said children live:
a)with the Wife each alternate week commencing 9.00am, Monday the 28th day of May 2001; and
b)with the Husband each alternate week commencing 9.00am Monday the 4th day of June 2001;
c)subject to the following:
i)that during school term the non resident parent shall have contact with the said children each Thursday, collecting the said children after school and returning them to the resident parent at 7.00pm;
ii)that at Easter, the residence changeover shall be brought forward to 2.00pm Easter Sunday;
iii)that by agreement during the long summer vacation, the said children shall spend two consecutive weeks with each parent commencing on the 1st and 3rd Mondays respectively in January each year;
iv)that in the event that, during school terms, Monday is a public holiday or non school day, the said children will remain with the parent with whom they have resided until 3.00pm Monday at which time they are to be collected by the other parent;
v)that in the event that either of the children’s birthdays fall on a weekend, the said children will have contact with the non resident parent for a period of three hours on that day, at a time to be agreed upon between the parties;
vi)that in the event that Mother’s Day falls on a weekend where the Wife is not the resident parent, the said children shall be returned to the Wife at 10.00am on Mother’s Day;
vii)that in the event that Father’s Day falls on a weekend where the Father is not the resident parent, the said children shall be returned to the Husband at 10.00am on Father’s Day;
viii)that in the event that Christmas Eve is a Monday, the no resident parent shall have contact from 9.00am Christmas Eve until 3.00pm Christmas Day;
ix)in the event that Christmas Day is a Monday, the resident parent’s period will extend from 9.00am until 3.00pm Monday; and
x)that otherwise, the non resident parent shall have contact from 6.00pm Christmas Eve until 3.00pm Christmas Day.
THAT all Applications be otherwise dismissed and removed from the Pending Cases List.
THAT Pursuant to S65DA(2) of the Family Law Act1975, the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders are set out in Annexure A and these particulars are included in these orders.
FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE
ZM 3201 of 2000
L D
Applicant
And
M N D
Respondent
REASONS FOR JUDGMENT (Ex Tempore)
Introduction
This matter now concerns competing applications for property settlement. The parties have reached agreement as to the orders to be made in relation to parenting issues. Those orders will provide for the two children of the parties to live with the husband and wife on a week-about arrangement for two consecutive weeks with each parent during the summer school vacation. The orders will, in addition, provide for special days to be shared.
Applications
The applications therefore which were pursued before me by the parties related solely to settlement of property. The applicant husband in his application seeks that he pay to the wife the sum of $119,144 within 60 days of the making of orders and that in consideration the wife transfer to him her interest in the former matrimonial home situated at 1 B Court, D, which I will refer to as the former matrimonial home. He seeks further orders which provide for the wife to retain her Honda Accord motor vehicle, for him to retain the Nissan Patrol motor vehicle, for the wife to transfer to him or his nominee any shareholding or directorship or any interest in the company known as W V Marketing Pty Ltd and that otherwise each party retain the assets in their respective possession, including superannuation, and that they forego any entitlement to any other superannuation benefits owned by each of them.
The wife, who is the respondent in the proceedings, commenced by seeking that the former matrimonial home be sold. Her Response which was filed on 27 October 2000 provides for an order that she receive 60 per cent of the sale proceeds together with a division of furniture and chattels and she retain her car and her interest in a National Australia Bank term deposit account. At the commencement of the proceedings her counsel opened on the basis that she sought 70 per cent of the proceeds of sale of the former matrimonial home together with some equalisation in relation to the different superannuation entitlements that the parties had in their private superannuation fund.
At the conclusion of the matter in closing the wife sought sale of the former matrimonial home with a division in favour of the wife as to 62 per cent and 38 per cent to the husband. The husband's counsel in closing sought an equal division in relation to the value of the former matrimonial home and other assets and some equalisation in relation to superannuation. The husband's position in relation to what should happen with the former matrimonial home was dependent upon the value of that property as found by me in the proceedings, there being a dispute as to valuation.
The husband's position was that if I were to find the property to have a value of $425,000, as asserted by the wife, that he would be unable to raise funds necessary to pay the wife and that the property would need to be sold. I indicated to the parties at the conclusion of the hearing that I would make some orders providing an opportunity to the husband to purchase the wife's interest but that he would need to advise her within a short space of time whether he was going to be in a position to do so and if not, there would be orders for sale of the property.
Background
The wife was born on 25 December 1966 and the husband was born on 23 January 1962. The wife is accordingly 34 years of age and the husband is 39. The parties married on 1 July 1989. They separated in October 1999 when, by agreement, the wife left the home, but the fact that the marriage was over was not communicated to her until late 1999. Each party accepts that the marriage has now irretrievably broken down. There are two children of the marriage, A R D born 9 August 1991, currently aged 9 and J F D born 28 December 1995, currently aged 5.
There is really no dispute that until at least 1998 the wife was the primary care giver for the children, although the husband assisted her with their care. On 23 March 1997 the wife was delivered of stillborn twins at 22 weeks. Tragically, she was shattered by this experience and during 1998 she was referred to a psychiatrist and admitted to hospital. While in hospital she attempted suicide. She had electroconvulsive therapy and was discharged in January 1999. She was readmitted to hospital shortly thereafter and spent some time in the psychiatric unit at Box Hill Hospital where she received further electroconvulsive therapy. She returned home in April 1999 but was readmitted to hospital in July and again in August.
The parties reached agreement at this time that the wife would live separately from the family for six to 12 months in an effort to work through issues and with the intention, certainly on her part, of returning to the family home in better health. At that time the husband assisted her in finding a flat in which to live, and she returned to the home on a regular basis to see the children. She was then receiving a disability allowance and met the cost of her rental from that allowance, although the husband paid some of her expenses. In December 1999, just after Christmas, which the family spent together, the husband told the wife that the marriage was at an end and that he was considering divorce.
Upon being served with his application for settlement of property and residence of the children, the wife took an overdose and was readmitted to hospital. Since that time her health has slowly, but it would appear steadily, improved. By the end of October 2000 she and the husband agreed that the boys would spend four week nights in her care each alternate week with the husband and she alternating weekends. Since the end of the year the parties have had a sharing arrangement between them in relation to the children. The arrangements now agreed to by the parties will formalise a situation whereby the children will spend equal time with each of the husband and the wife.
Prior to 1997 it is clear that the wife had been the primary care giver for the children, particularly when the husband was initially pursuing his full-time occupation as accountant. Subsequently when he became a strawberry grower on his parents' property his work commitments enabled him to assist with the children. Following the birth of the stillborn twins in 1997 and the wife's subsequent ill health, it is not in contention that the husband, at least until late 2000, has had the primary responsibility for the children.
Until the wife left the former matrimonial home at the end of 2000, when she was at home and not hospitalised, she was obviously able to assist in the care of the children but there is little doubt that during this time the husband assumed responsibility for their care and was the person primarily responsible for supporting them financially. There is also little doubt that this period was a very difficult one for the entire family and that not only was the wife suffering in this period from her ill health, but that the whole family also suffered the consequences of it.
The wife has not been in paid employment since 1995. She is in receipt of a disability allowance of $247 per week. The husband is currently employed as an accountant employed by A & S and works full-time. He has had a reasonably long association with that firm and as a result is able to work on a somewhat flexible arrangement which enables him to work less hours in the week in which he has the boys with him and more hours in the other week when they are with the wife.
The law
In considering an application for settlement of property, the Family Law Act requires that the court make such order as it considers appropriate, altering the interests of the parties in the property pursuant to section 79 of the Family Law Act. Section 79(4) provides for the court in considering what order should be made, to take into account:
a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them or otherwise in relation to any of the last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties;
b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of the party or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage;
c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children;
d)the effect of any proposed order on the earning capacity of either party;
e)the matters referred to in subsection 75(2) of the Act ;
f)and any other order made under the Act affecting the parties or a child.
Finally, I am required to consider any child support under the Child Support Assessment Act that a party to the marriage has provided or is to provide or might be liable to provide in the future for a child of the marriage. Dealing with the question of subsection 79(4)(g) first, it was suggested at the outset that an application pursuant to section 117 of the Child Support Assessment Act might be made seeking a departure from administrative assessment in this matter. It transpired, however, that there has not been application for administrative assessment made by the wife who was seeking to file that application, and accordingly, there is no basis upon which such an application could be made to this Court for a departure.
What is likely to occur now is that the wife is likely to make an application for administrative assessment and that that application will be processed by the Child Support Agency. As the husband is now employed as a full-time employee, that application will be able to be dealt with by the agency and, in light of the information available as to the parties' assets and income, will be a reasonably straightforward application to be processed. Accordingly, I do not need to have any further regard to the provisions of subsection 79(4)(g).
In considering the matters in section 79(4) and section 75(2) of the act, I must carry out the following process as set out by the Full Court (see Davut and Raif, (1994), FLC 92-503), I must first identify the assets of the parties and find their value. I must then consider the contributions which the parties have made to the acquisition, conservation and improvement of those assets and then I must consider the matters arising under section 75(2) to discern whether any further adjustment should be made. Finally, I must look at the result in total and consider whether that result achieved by the three-step process would result in a just and equitable resolution.
Issues
There were a number of issues to be determined in this matter. In relation to the assets available for division between the parties, there was a dispute between the parties and an issue as to precisely what that pool should be. The first issue concerned the value of the former matrimonial home. The valuer for the husband valued the property in a written valuation at $380,000 but subsequently conceded, after a conference between the valuers, that the property had a value of $390,000. The valuer for the wife valued the property at $425,000. The second issue concerned the question of whether a contribution made by the husband's parents to the acquisition of the former matrimonial home of $130,000 should be treated as a contribution made on his behalf for the purposes of section 79(4) or alternatively, whether it was a loan which had to be deducted to arrive at the net value of the assets. The husband's case was that that should be regarded as a loan and the wife's case was that it was a contribution and should be regarded as such.
The parties each have a motor vehicle and in the end the values of their respective motor vehicles was agreed at $8000 in relation to the wife's Honda and $15,000 in relation to the husband's Nissan Patrol. As at separation, or shortly thereafter, the parties had under their control two separate bank accounts. The husband ultimately had the benefit of a cash management account in the name of W V Marketing with a balance at separation of $21,147. The wife had the benefit of a National Australia Bank term deposit with a balance of $23,180. There was some dispute between the parties as to precisely how these sums should be taken into account and whether moneys should be added back on the husband's side or alternatively, whether the parties should have been taken to have simply had the benefit of those accounts and only the net balance now remaining be brought into account. The parties also have 500 Coles Myer shares which are in the wife's name with an agreed value of $3604.
Finally, there was an issue at the outset as to whether there was any value to be attributed to machinery and motor vehicles which formed the assets of W V Marketing.
Apart from the actual asset pool there was also a dispute between the parties as to what findings should be made in relation to contribution and in particular what weight should be placed on contributions made by the husband, principally sourced from his family, and what weight should be given to contributions made on the wife's part. The husband asserted that apart from the contributions made by the parties themselves up until 1997 he should have credit for contributions made by:
a)obtaining the benefit of rent-free accommodation from his parents up until 1993 when the parties acquired the former matrimonial home;
b)the benefit of a car worth $13,000;
c)general assistance from his parents; and
d)the contribution of $130,000 which enabled them to complete the purchase of the former matrimonial home.
On the wife's side she sought that weight be given to contributions made by her at the commencement of the marriage in respect of her ownership of the Toyota Corolla motor vehicle worth about $3500, and some savings which she put at $5600. In addition she contributed a house at 52 S Avenue, S, which she had purchased in January 1987 for $57,000 and which was sold in April 1992, the net proceeds of sale being $73,326. She also had a half-interest in a block of land at 6 S M Drive, K, which was purchased with her mother in 1987 for $39,000 and which was sold in October 1997 with her share of the net proceeds of sale being $32,495. There was an issue between the parties as to the amount that had been paid off the mortgage by the wife by the time the parties were married in 1989.
Finally, there was an issue between the parties as to what weight should be given to the matters in section 75(2) and in particular, in relation to the capacity of the wife to work in the future and to maintain herself compared to the husband's capacity to work. That particular matter is dealt with in section 75(2)(a) and (b) which requires me to consider the age and state of health of each of the parties and the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment. There is also the issue of the differential between the superannuation entitlements of each of the parties in their privately held superannuation fund.
Evidence
In relation to the former matrimonial home, both valuers were called and cross-examined. Both used similar methodology, namely the application of comparable sales evidence to the subject property. This involves finding comparable properties to the subject property in order to establish a value for this particular property. Both used similar sales evidence in the D and E D area to establish comparable properties. It was agreed between the valuers that in the D area the market has risen in the last 12 months and it was conceded by the husband's valuer that it would not be unreasonable to attribute a 10 per cent rise in the market in that area.
Having heard the evidence of the valuers and read their reports in relation to the comparable properties, there seems little doubt that the most comparable sale is that of a property at 8 B Court, D, which was sold for $390,000 in July 2000. The difference between that property and the subject property, which are both located in courts quite close to each other, appeared to be the building style of the property in B Court, being a federation style compared to a more plain style of the subject property. There was disagreement between the valuers as to whether or not a federation style would make the property more attractive to the market or not. The husband's valuer indicated that he thought that would provide a reason why the property might be more attractive whilst the wife's valuer considered it would not necessarily be so.
However, there was another matter which the valuers did agree upon which seems to make the B Court property somewhat less desirable than the subject property. It was conceded that the subject property was elevated and had some views over a neighbouring park. The property in B Court had a view which was, to some extent, spoiled by power lines which were approximately a quarter of a mile away and visible thereby affecting the view. Otherwise the property seems to be reasonably comparable to the subject property.
Taking account of the valuer for the husband's view that the federation style of house might be more attractive, any possible increase would probably be offset by the fact that its outlook is slightly inferior to the subject property and therefore the properties, on the evidence available to me, seem to be fairly comparable. Having regard to the fact that both agreed that in this area it would not be unreasonable to attribute a 10 per cent rise in the market, the B Court property would, it was conceded if sold today, have a value of at least $430,000 making it consistent with the value attributed to the former matrimonial home by the wife's valuer.
Further, there was a property at 21 N Crescent, E D, which was similar to the subject property, although in a slightly different location but 10 years older. That property had a sale price of $383,000 when sold in April this year. That price is similar to the price attributed to the subject property by the husband's valuer. However, the evidence of both valuers was that the fact of its age would make a difference to value and there did not seem to be any other features in relation to its location which would make it more attractive than the subject property. That sales evidence, in my view, confirms the likelihood that the subject property has a higher value and I find its value to be $425,000.
Turning to the question of the funds available to the parties and how those funds have been used, it is first necessary to consider the husband's income since separation. The husband is now working full time for A & S as an accountant and earning $800 per week gross or $41,600 gross per annum. Before the wife's illness the husband had been carrying on the strawberry farming business on land provided by his parents, as they too had previously been farmers, and he traded as W V Marketing Pty Ltd. In March 2000 he ceased working in that business and commenced doing work as an accountant for A & S as a consultant. He initially did that work through the vehicle of W V Marketing Pty Ltd. On the husband's evidence from July 2000 until February 2001 he worked as a consultant using a corporate entity, H R Pty Ltd, as a vehicle through which his consultancy income was earned.
From April 2001 he has been employed by A & S directly as their employee. Until the time that he became an employee and from when he ceased carrying on the strawberry farming business he claimed that he was earning net $150 per week after payment of business expenses. Consultancy payments would be received by the company through which the payments were being received from time to time. The company would pay expenses and the husband would receive an income of $150 per week which he said was the net position after those expenses were paid. This assertion on his part had some fiscal ramifications. The husband applied for child support at one stage from the wife on that basis and also received a parenting payment from Centrelink right throughout the period up to when he commenced employment as an employee. He is receiving the family allowance in relation to the children, although the wife has been caring for the children at least half the time since the end of last year.
The husband was cross-examined about his expenditure and the income that he received and despite his assertion that his income of $150 per week was received after payment of business-related expenses, I find that in fact very little of the husband's gross fees were spent on business expenses and that his net income was nothing like the $150 per week he claimed it to be and was more like $800 per week. In fact the husband was able to save a considerable amount of his income during the period up to April 2001. In November 2000 the balance in his account was $10,665.59. $8000 was then taken from the children's account and placed in the husband's account which took the balance up to about $18,000. The further addition of his gross fees saw the account rise to $27,394 as at March 2001. The husband then withdrew two amounts from that account: the first was $10,000 and the second was $15,000.
With the $10,000 the husband paid off a Visa card account and gave the wife $4000 and took $4000 himself. These funds were to replace the moneys from the children's account which had been put into his account and were intended to be held by each of them on trust for the children. The income derived by the husband during the period up to April 2001 was derived by him from working fairly significant hours, despite the fact that the children were living with him and that he had a considerable obligation in caring for the children. His time sheets indicate that he was working considerably longer hours than he originally admitted. In fact in some months prior to April 2001 he was working nearly full-time. His gross fees up until the time that he commenced full-time employment for the eight months in the year 2000-2001 were $32,938.20 which is an average of about $1000 a week.
During the course of cross-examination the husband made a number of admissions in relation to his income which admissions enabled me to make the finding that I have in relation to the sums available to him. In particular he admitted that the sum that he had claimed was largely for business and motor vehicle expenses, including domestic usage, and that from the account into which his gross fees were paid that he paid rates, both council and water, some school fees, child care expenses, mowing and repairs to the house. With the $15,000 which the husband withdrew from his account in March 2001 he added to that the money which had been in the cash management account in the name of W V Marketing of $21,000 giving him control of funds at that point with a total of about $36,000.
From those funds he paid a number of expenses, including legal fees of $13,000. He also paid for landscaping. He purchased whitegoods for the house, took the children on a holiday at Easter and he spent money on clothes for himself and the children. He now has left about $12,000. The wife, who has been legally represented throughout the proceedings, has, as I have indicated, only the disability pension and the cash management funds available to her and she has not paid any of her legal fees.
I find that the husband has in the period in which he has been earning as a consultant accountant fairly consistently earned on average about $1000 per week between at least mid-2000 to March 2001. He has also received a parenting payment from Centrelink and the family allowance. Whilst he has had the major responsibility for the financial support of the children, he has not made any payment of maintenance to the wife, nor has he shared the family allowance with her in the period in which the parties have been caring for the children on a shared basis. The receipt of his income has enabled him to pay his legal fees.
Having regard to the fact that the wife has not paid her fees, it is appropriate in my view, in this case, that the husband's legal fees of $13,000 be treated as being added back to the pool of assets to be taken into account (Farrell and Farrell (1996) FLC 92-681). It is also reasonable, in my view, that the amounts that the parties had in their respective accounts, that is the cash management account for W V Marketing in the case of the husband, and the National Australia Bank in the case of the wife, should be also added back as at the date of separation and in the amounts to which I have referred.
The remaining matter concerning the asset pool itself was the question of whether any amount should be attributed to any other assets of W V Marketing. Having heard the evidence as to the assets of the company, I am not satisfied that any value should be attributed to any remaining assets which are minimal and in the possession of the husband.
There are no liabilities of the parties other than the question of whether the amount of $130,000 contributed by the husband's parents to the acquisition by the parties of the former matrimonial home should be treated as a liability. That property was purchased in October 1993 for $272,500. The purchase was financed from the proceeds of sale of the wife's property at 52 S Avenue, S, which amounted to $73,326, joint savings accumulated by the husband and wife and funds advanced by the husband's parents of $130,000.
Apart from asserting that that was a liability repayable at call, there was no other evidence to support a finding that the sum of $130,000 is a loan which will be payable at some stage to the husband's parents. No documents were produced to support that contention. No evidence was given to support that contention. It is conceded that there has not been any requirement for repayment and given the history of the husband's parents' involvement and other benefits made available to the parties by his parents, I find that the amount of $130,000 was a contribution by the husband's parents and is not a liability which the parties or either of them are required to pay either now or at some future time.
Contributions
Turning to the question of contributions, the parties agreed that there were really three different stages in the marriage in which the contributions should be considered. The first was the period up until the wife became ill in 1997. Apart from contributions which are claimed by the parties from the sale of properties either owned before the marriage or, in the husband's case, from funds made available by his parents, the parties agreed that their joint endeavours during this period should be regarded as being equal. The second period is really from the onset of the wife's ill health in 1997 up until the end of 2000. During that period the husband asserts that the primary financial and other responsibilities for the care of the children fell upon him and that those contributions should be given some weight and that during this period his contributions – particularly as parent and homemaker – outweighed those of the wife.
The final period relates to the time from the end of 2000 until the present when the children have been shared between the parties and there appears to be no argument that in terms of contribution to the children the parties' contributions should be regarded as equal. For her part it would be fair to say that the wife argues that she has made a contribution which she says should be regarded as greater than the husband's because he has retained the benefit of the family allowance during that period. In my view, that is not a factor which would lead me to conclude that there has been a greater contribution on her part. The majority of the financial support of the children has been made by the husband during that period and no doubt using those funds. The wife has undoubtedly struggled during that period and would have found that money of assistance to her, but ultimately no doubt it would have found its way to the benefit of the children who have benefited in any event. What it does enable me to find, however, is that in the period since 2000 the parties have contributed both as parents and financially on an equal basis.
It is agreed that at the commencement of cohabitation that the wife had a car and some savings. She owned a property at 52 S Avenue, S, bought in January in 1987 for $57,000 and which was sold in April 1992 for the net sum of $73,326. It is also agreed that she had a half interest in a block of land with her mother in K which had been purchased for $39,000 and which was sold in October 1997 with her share being $32,495. Although this property was sold after the former matrimonial home was purchased, it is conceded by the parties that the funds were used for the benefit of the family.
The difficulty in precisely identifying the value of the wife's contributions is that the properties that were owned by her at the date of the marriage were encumbered. Initially an amount of $40,000 was borrowed. Prior to her marriage to the husband the wife was living at home, was working at two jobs and was saving. The property at S Avenue was rented and the rental was being paid into an account and was being used to meet the mortgage. Initially it was the wife's case that she had paid significant amounts off the mortgage by the time of the marriage. I have referred previously to the wife's health since 1997 and to the periods of her hospitalisation and to the electroconvulsive therapy that she had at various times. That has clearly and admittedly affected her memory and her recollection of what occurred in the early stages of the marriage was unfortunately hampered by her inability to recall the details.
The documents produced are equivocal and do not greatly assist in working out precisely what sums were paid off the mortgage prior to the marriage which would enable me to find what net property the wife brought into the marriage. The husband had done his own calculations as to the reduction of the mortgage by the application of the monthly payments of $595 which were being paid and including a figure for interest. He was prepared to accept that a reasonable way of looking at the contributions of the wife was to take into account the net proceeds of $73,326.00 received when S Avenue was sold in 1992 and the net proceeds of the K property when that was sold and to take off the mortgage which he calculated at the date of cohabitation as about $35,000. That would give the wife a contribution of some $68,690 which he was prepared to concede was her contribution.
Given the state of the evidence as to what was paid off the mortgage, it is difficult to make a finding which is any more accurate than that. It may have been that other sums were paid off prior to the marriage, but the evidence simply does not enable me to make a conclusive finding. However, in addition to that contribution it must also be remembered that the wife brought into the marriage a car and some savings, that the parties after the marriage had the benefit of the property being rented and that rent being used to offset the mortgage payments and to reduce the mortgage. The parties were able to pay off the mortgage prior to sale of the property, no doubt partly because they were living with the husband's parents which is a contribution on his part. But a factor that I should have regard to is that the wife brought into the marriage these properties and that, even upon marriage, the property was let. The mortgage payment after marriage, although the reduction was attributable to both parties was made partly from rental from that property. After the mortgage was repaid and prior to sale, the parties continued to have the benefit of the rent from the property.
These contributions by the wife have to be considered in the context of contributions made by the husband at or about the time of the acquisition of the former matrimonial home. The husband's parents provided them with a car worth $13,000, provided them with rent-free accommodation up until they moved into the former matrimonial home and provided them with $130,000 in 1993 when the property was acquired. There is an imbalance in their contributions and the husband should be given credit for having made from those sources outside the marriage a contribution which is greater than the wife. I place at that point their respective contributions as being 60 per cent to the husband and 40 per cent to the wife.
Subsequent to the acquisition of the former matrimonial home and up until the wife's ill health in 1997 the parties in their respective capacities contributed equally. I have already referred to the period of the wife's ill health and the consequent responsibilities that the husband had for the support of the children, both as homemaker and parent and in a financial sense. Those contributions were undertaken by him and he also worked during that period. I find that their contributions, having regard to all of the matters in section 79(4) up to the date of hearing should be in the proportions of 62 per cent to the husband and 38 per cent to the wife.
Section 75 (2) factors
I now turn to the matters in section 75(2) which I need to consider. There are a number of subsections in subsection 75(2) which I do not intend to repeat. The parties will share the care of the children and to that extent each of them will bear equal responsibility for the children's care. The matters which are of most relevance in considering section 75(2), in my view, are subsection (a) which relates to the age and state of health of each of the parties and subsection (b) which relates to the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment and subsection (g) which provides that where the parties have separated or the marriage has been dissolved the parties should have a standard of living that is, in all the circumstances, reasonable.
The evidence quite clearly establishes that the husband has and has effectively at all times had the capacity to earn a living as an accountant and that he is presently earning in excess of $40,000 per annum. He is fortunate in that he has a position which enables him to earn that sort of an income notwithstanding that he is caring for the children part of the time. He himself admitted that without any other considerations he is fortunate to be in the position where his job enables him some flexibility and that given her obligations to the children alone, it would be difficult for the wife to obtain a full-time position.
The wife's case is that her ill health does not enable her to work and will not do so for the foreseeable future. The husband's case, whilst acknowledging that that is the case at the present time, is that there was no particular reason why work could not be sought by the wife and in the longer term lack of any medical evidence as to her future prospects should be taken into account in considering the weight to which this issue should be given. It is true that no medical evidence was called on behalf of the wife. However, it was abundantly clear from the manner in which she gave her evidence and from her demeanour both in the witness box and in court, to which I referred during the course of the proceedings, that there is little or no likelihood of the wife obtaining employment both now and for the foreseeable future.
The electroconvulsive therapy that she has had clearly appears to have had a marked effect on her memory. She is still in a fairly fragile emotional state and again, that was apparent both during her giving evidence and also the course of the proceedings themselves. Despite the lack of medical evidence it is clear from her demeanour and from the evidence she gave and the way in which she gave it, that she is not able to work and will not be able to work in the foreseeable future. Added to these limitations is, of course, the limitation in any event which is imposed upon her by her obligations to care for the children.
In comparison the husband has the capacity to continue to earn in excess of $40,000 per annum. The fact that he has been able to continue to earn at a reasonably high rate, notwithstanding his obligations to the children, is a credit to him but it also highlights his ability to continue to earn at this level, notwithstanding his responsibilities to the children.
The other matter to which I have regard under section 75(2) is subsection (f) which relates to the eligibility of the parties in relation to any superannuation fund or scheme. The parties both have entitlements in the D superannuation fund but those entitlements at law are different. The husband is entitled to $33,971 and the wife is entitled to $11,500. It was conceded that there needs to be some account taken of this differential, but no agreement as to precisely how that should occur. On behalf of the husband it was put that in considering this factor I should also have regard to the fact that the wife will get some immediate benefit from any adjustment, whereas he must wait until he is by law entitled to access to his funds.
That may be true, but on the other hand if the wife were to roll over the funds to which she is entitled in the fund and were to place some other moneys received from the husband into that fund, then she too would be in a similar position to the husband. Having regard to the differential between the parties in relation to superannuation and having regard to the physical and mental capacity of each of them for gainful employment, in my view there should be an adjustment in the wife's favour of 17 per cent in relation to these factors. That will result in an overall division between the parties of their assets as to 55 per cent to the wife and 45 per cent to the husband.
The asset pool itself I find to be as follows:
the former matrimonial home $425,000.00
the wife's motor vehicle 8,000.00
the husband's motor vehicle $ 15,000.00
the cash management account at
separation in the control of the husband 21,147.00the National Australia Bank term
deposit available to the wife 23,180.00
Coles Myer shares available to the wife 3,604.00
the husband's legal costs added back 13,000.00
Total $508,931.00
55 per cent of that pool is $279,912.00
The wife will retain the benefit of
the cash management funds 23,180.00the car 8,000.00
the Coles Myer shares 3,604.00
Total $ 37,784.00
Thus the balance due to the wife is $245,128.00
Taken as a percentage of the former matrimonial home valued at $425,000 that is 57.67 per cent.
The parties were able to reach agreement about chattels before the hearing concluded and these Orders will reflect that agreement.
Costs
I have competing applications for costs. Costs are dealt with in section 117 of the Family Law Act. Section 117 states that subject to any other order the court might make each party should bear their own costs. There is no presumption that they will do so or that there will an order and each case must be considered on its own facts. Each of the parties interestingly enough has an argument for costs arising from the valuations. I do not intend to give long reasons because I have already enunciated most of the matters which I thought were relevant during the course of the argument. First, the Husband applied for costs occasioned by some delay in commencing the hearing due to the Wife obtaining a different valuation of the firmer matrimonial home at the last minute
In my view there was a short delay while the valuers conferred but the parties used that time to have negotiations about the overall settlement of the matter. Although they were not able to reach agreement, I am not satisfied that it would be appropriate to order costs to the Husband as a result.
The Wife sought the costs occasioned by the valuation issue being litigated at the hearing as she had been successful on that issue. She relied on the fact that the property may still have to be sold and that the husband knew there was an issue over valuation, he having received two market appraisals nearly $100,000 apart. This is was submitted, made it unreasonable for him to retain the former matrimonial home. This merely highlights the fact that it was not unreasonable for him to litigate over this issue, particularly in light of the fact the appraisals he obtained were so different. His case was conducted on the basis that if I had found the lesser value then he would be able to buy out the wife. He still wants the opportunity to do that but it was submitted for him that a consideration of whether or not there should be a sale depended ultimately upon my finding as to value and that could only occur after I had heard the valuers give evidence.
I accept that argument and I do not consider in relation to the valuations that there should be an order for costs in favour of the wife.
The other major matter concerns an offer of settlement made by the husband. The context of how that offer was made was that it did not come to the attention of counsel, nor her instructing solicitor, prior to the matter concluding on Friday, which was the last day of the hearing, and indeed it did not come to counsel's attention until this morning. It is not sufficient just to send the offer of settlement to the solicitors office by facsimile in the middle of the hearing as occurred here. If it is to be relied upon, then it needs to come to the attention of those acting on behalf of the other party and particularly so when they are clearly at court with the other party and when the best opportunity of ensuring that it came to their attention would have been to personally hand it to them at court.
It would not, in my view, be fair or just to make an order based on the offer in those circumstances. I have had regard to the other arguments that have been made generally, but taking into account the matters in section 117(2)(a) in my view there should be no order for costs in favour of either party.
The oral applications of both for costs will be dismissed
I certify that the preceding sixty-two (62) paragraphs are a true copy of the reasons for judgment of Bryant CFM
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