D and G
[2003] FMCAfam 315
•8 August 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| D & G | [2003] FMCAfam 315 |
| Family Law – Property – Contributions – whether redundancy payment used for purchase of matrimonial home affects contribution – Husband’s contribution to step child – consideration of needs factors. |
Child Support (Assessment) Act 1989
Family Law Act1975
Money and Money (1994) FLC 92–485
Pierce v Pierce (1999) FLC 92–844
Robb v Robb [1995] FLC 92–555/1
R v H [2003] Fam CA 125
| Applicant: | A A D |
| Respondent: | S L G |
| File No: | (P)MLM 2053 of 2003 |
| Delivered on: | 8 August 2003 |
| Delivered at: | Melbourne |
| Hearing dates: | 25 & 26 June 2003 |
| Judgment of: | Phipps FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Thomson |
| Solicitors for the Applicant: | Hayes & Associates |
| Counsel for the Respondent: | Mr Mort |
| Solicitors for the Respondent: | Slater & Gordon |
ORDERS
THAT the Wife pay to the Husband the sum of $126,225 ("the payment") on or before 7 October 2003.
That contemporaneously with the payment;
(a)the Husband do all such things and sign all such documents as may be required to transfer to the Wife at the expense of the Wife all his right title and interest in the real property situate at and known as 1 G Street, N in the state of Victoria;
(b)The Wife indemnify the Husband against all payments and liability pursuant to the mortgages over the property and all apportionable rates, taxes and outgoings with respect to the property.
That in the event that the whole of the payment has not been made by the due date then the real property be sold and upon completion of the sale, the proceeds of the sale be applied:
(a)first to pay all costs, commissions and expenses of the sale;
(b)secondly to discharge the mortgages and any other encumbrances affecting the real property;
(c)thirdly the balance then remaining be divided in the proportion of:
(i)42.5 percent to the Husband;
(ii)57.5 percent to the Wife.
That unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these are any subsequent Orders;
(a)each party be solely entitled to the exclusion of the other to all other property in the possession of such party as at the date of these Orders, or agreed to be delivered to the other party prior to the date of these Orders;
(b)each party forego any claims they may have to superannuation benefits belonging to or earned by the other;
(c)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
That there be liberty to apply in respect of the terms and conditions of the sale of the property.
Otherwise, all extant applications are dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
(P)MLM 2053 of 2003
| A A D |
Applicant
And
| S L G |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties commenced cohabitation on 1 October 1991. They were married on 5 April 1992 and separated on 16 October 2001. The Husband was born on 22 December 1952 and is presently aged 50 years. The Wife was born 6 February 1964 and is presently aged 39 years. Both are in good health.
At the time of the marriage be Wife had a daughter, J born
24 November 1986. There is one child of the marriage, R born
17 October 1992.
The agreed property pool is:
·Property at 1 G Street, N; agreed value $450,000 less mortgage $153,000 net equity $297,000;
·Wife’s car $3,000;
·Furniture and contents, Wife’s estimate $6500, Husband’s estimate $10,000.
The Husband has a motor vehicle which was purchased after separation. He purchased it new for $41,000 and borrowed the purchase price. Its value is now less than the amount owed and neither party sought to make it relevant to the property pool.
The Husband has superannuation of $66,000 and the Wife $45,000. Neither sought a splitting Order. Each party approached the case on the basis that superannuation was a financial resource.
Since separation, the Wife has resided in the former matrimonial home with the children and the Husband has resided with his Mother.
At the commencement of cohabitation the Husband was working a manager at a S U earning approximately $33,000. The Wife was studying full time and was working at a medical clinic. She was then and is now qualified as an enrolled nurse but is not registered. To be registered now requires further study. At the commencement of the relationship each party had a motor vehicle and some furniture. The Husband says he had $6,500 and some debts. The Wife’s disputes the savings. She said that, without consulting her, the Husband went into debt to pay for the wedding and honeymoon and she was unhappy about that. A consequence is that there were no assets at the commencement of the marriage.
The parties lived in various rented premises. By the time of the child R’s birth the Wife had deferred her studies and was working full time as an executive assistant at C R. She had little time off work after the birth of the child.
In December 1994 the Husband accepted a voluntary redundancy package from his employment with the S U. He received a sum of $80,332 made up of accrued holiday pay, long service pay and redundancy pay all totalling $47,060 and non preserved superannuation of $33,272.
Late in 1994, the parties took out a personal loan for $6,994.76. It was repaid in January as soon as the Husband received his redundancy payment. The Wife said that it was to pay a taxation bill of the Husband and the Husband’s credit card bills. The Husband said it had been taken out to purchase a car.
The Wife said that the taxation bill was $5,000. The Husband’s evidence was that he did have a penalty and reassessment to pay as a result of a desk audit of tax returns for 1988 and 1989. The taxation documents he produced suggested that this amount was a little over $2,000.
In 1995, the parties purchased the former matrimonial home at 1 G Street, N for $157,000. Stamp duty and legal fees are in addition; the Husband says about $7,000 and another $1,000 for garden items required; a total of about $165,000 spent acquiring the house.
The deposit of $15,700 and a further payment of $51,300 came from the Husbands termination payment. The balance was made up of a Westpac bank home loan of $75,000 and a $25,000 service benefit loan. The Husband was eligible for service loan because he had served in the army as a national serviceman in 1972 and 1973.
In May 1998, a further $50,000 was borrowed from Westpac Bank to pay for renovations, additions, a kitchen, two extra bedrooms and a bathroom and laundry. By that time, the Wife was working as an administration officer at the A E U. She says that in November 1998 she resigned to take a less demanding job with the independent E U. She received a superannuation payment and contributed a further $10,086 from this payment to the cost of renovations. The Wife says that there had been an earlier increase in borrowings of $5000 to do some minor renovations to the house.
The Law
A four step process must be applied to property proceedings under section 79 of the Family Law 1975. These are:
a)ascertain the matrimonial property and its value: A superannuation interest is to be treated as property – section 90MC;
b)consider contributions under section 79 (4) (a)–(b);
c)consider any adjustment for the matters contained in section 75 (2);
d)consider whether in all the circumstances the Order proposed is just and equitable.
The parties conducted the case on the basis that superannuation was not part of the matrimonial assets but a financial resource to be taken into account. This was because neither sought a splitting order for superannuation.
Contribution Factors
The major issue between the parties is how the $67,000 contribution from the Husband’s redundancy payment affects contribution under the second step. The Husband says that it should result in an assessment of contribution of 60 percent in his favour and 40 percent to the Wife. It was submitted that the situation was similar to one where there was substantial unequal initial contribution at the commencement of the marriage, and that this should result in an adjustment in shares, see Pierce v Pierce (1999) FLC 92 -844.
The redundancy package needs to be placed in context. The Husband had been fully employed at the S U for 12 years. Cohabitation commenced in October 1991. The redundancy package was received in December 1994. Following his redundancy the Husband did not work for some months. He says three months and the Wife says six months. He then had several periods of contract employment before obtaining his current position. He suffered from depression in the period after the redundancy. He attended a psychiatrist and there was a period when he was seeing a counsellor as many as 16 times a month.
The Wife says that it was primarily her efforts which enabled the parties to obtain the Westpac bank loan. The defence loan had to be secured by a first mortgage and so only a bank prepared to take a second mortgage was an option. She says that through contacts she had in Westpac, she was able to do this.
The Wife says that she was the major administrator and organiser of the renovations. She was the owner builder and organised plans, contracts for materials and building works generally. She spent time and energy in finding lower priced materials, for instance, second-hand roof tiles.
The Wife says that she was the primary carer of the child of the marriage R and of her daughter J. The Husband says that he did his share of caring for both children.
Other matters to be taken into account are gifts from the Wife’s parents to fund the purchase of carpets ($1,100) and carport ($1,470). During renovations, the Husband’s Mother leant $8,000 which has been repaid. The Husband has another loan from his Mother which he is currently re-paying.
Since separation, the Wife has been living in the matrimonial home, caring for the children and, to a certain extent, has been paying the mortgage payments. She has had to make arrangements with the bank to reduced payments pending resolution of matrimonial property issues.
The Wife is well organised and energetic. I accept that she played the major part in organising the house renovations. The Husband gave evidence of helping to find bricks and tiles, doing demolition work, and doing some painting and demolition. A substantial amount of time and organisation was necessary to do the renovations as an owner builder. While the Husband played his part as described, I find that the major part was played by the Wife. Without her efforts, the renovations would not have been carried out at the price that they were.
The Husband’s contribution from his redundancy must be taken into account. Without it, the parties could not have purchased a house at the time they did.
An initial contribution is eroded by the passage of time. In Money and Money (1994) FLC 92-485 Fogarty J. said at 81, 054 that in an appropriate case an initial substantial contribution by one party may be eroded to a greater or lesser extent the later contribution of the other party even though those later contributions do not necessarily, at any particular point, outstrip those of the other party. He said that the original contribution should not be carried forward as a mathematical proportion. It is one of a number of factors to be considered.
Both parties worked throughout the period of cohabitation and marriage and, apart from the Husband’s redundancy payment, their financial contributions are about equal. I have already said that I consider that the Wife played the principal part in organising the renovations and held the primary role in caring for the child. This is not to say that I do not accept that the Husband played his part. As with the renovations, the Wife, I find was the organiser in the household and played the major part.
The various components of the Husband’s redundancy payment accrued over a 12 year period, the last 3 years during cohabitation. He then had a short period of unemployment and reduced income. The total period of cohabitation was 10 years; 6 of them after the purchase of the matrimonial home. Apart from the redundancy payment, financial contributions are about equal. The Wife has made a greater contribution as organiser of the extensions and renovations and as principal child carer. She made a greater contribution as homemaker than did the Husband. I consider that the greater financial contribution made to the purchase of the home by the Husband is balanced out by the other factors I have referred so that contributions are equal.
The matters referred to in sub-section 75(2) so far as they are relevant
a) The age and state of health of each of the parties:
The Husband is 50 years of age. The Wife is 39 years of age. Both are in good health.
b)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:
The property and financial resources of the parties is the share of each in the matrimonial property plus their superannuation. The Wife’s income is about $50,000. The Husband’s income is about the same. Each is capable of continuing in their current or similar gainful employment. The husband has more in superannuation.
c)Whether either party has the care or control of a child of the marriage who has not obtained the age of 18 years:
Consent Orders in relation to the child R were made in the Family Court of Australia on 14 January 2003. She resides with the Wife and the Husband has contact on alternate weekends from after-school on Friday to before school on Monday morning; extended to Tuesday should a contact weekend fall on a public holiday. In addition, he has contact each Thursday from after school until Friday morning before school and part of each school holidays and Christmas. The Wife has the major share of the care and control of the child.
d)Commitments of each of the parties that are necessary to enable the parties to support:
(i)himself or herself;
(ii)a child or another person that the party has a duty to maintain:
Neither of the parties have commitments other than that necessary to support himself or herself and their child. The Husband’s liability for the children is in accordance with the Child Support Legislation. Agreement was reached in January 2003 pursuant to which the Husband was to pay child support for both children of 27 percent of his income. However, subsequently he applied for variation in relation to R because of the period of time she spent with him, and that has now reduced his liability to 24 percent.
e)The eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of any other country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established or operates within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party:
The Wife receives a family payment of $78 per week.
f)Where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable:
Each party has sufficient income to pay for their expenses. The Wife provides for the children. The Husband lives with his Mother. The Wife hopes to keep the matrimonial home but that seems unlikely. She will have to find other accommodation for herself and the children. She will find it difficult to maintain a standard of living equivalent to the Husband’s.
g)The need to protect a party who wishes to continue that party’s role as a parent;
ga)Any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage:
Surprisingly, from evidence the precise amount of child support being paid was not clear. The approximate amount is a little over $700 per month.
h)Any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account:
The Husband’s contribution to care of the child J during co-habitation and continuing may be a factor to be taken into account under this paragraph. Robb v Robb [1995] FLC 92-555, R v H [2003] Fam CA 125.
The Wife has the care of the child and needs to provide for her including providing accommodation. The Husband has a greater amount of superannuation. I think that adjustment in favour of the Wife of 10 percent is appropriate for these factors. I consider that adjustment for the Husband’s contribution for the child J should be 2.5 percent.
The Wife is to retain her car, which she values as $3,000. The Husband estimates chattels at $10,000; the Wife’s estimate was $6,500. At the commencement of the hearing the chattels were all in the matrimonial home in the possession of the Wife. During the hearing I was informed that agreement had been reached on chattels to be returned to the Husband.
Conclusion
The Wife wishes to have the opportunity to retain the matrimonial home. The Husband sought its immediate sale. There is no reason why the Wife shall not have the opportunity to raise funds to pay out the Husband, even though ultimately given in evidence, she conceded that it was unlikely that she would be able to do so.
Finally, I need to consider whether the order proposed is just and equitable taking into account all the circumstances. I consider that it is. As part of the determination of what is just and equitable, I consider that given the lack of evidence about value of the Wife’s car and the chattels and subsequent agreement about return of some chattels to the husband, and the fact that the Husband has a motor vehicle himself, not valued and not taken into account, that the division of assets 57.5 percent, 42.5 percent should apply to the matrimonial home only.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Phipps FM
Associate: Kwong S
Date: 28 October 2003
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