D & D
[2004] FMCAfam 154
•2 April 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| D & D | [2004] FMCAfam 154 |
| FAMILY LAW – Property settlement where the parties have never been divorced but separated for 19 years – relevance of the wife and child’s exclusive occupation of the former matrimonial home for 19 years and relevance of section 75(2)(o) because of the wife’s continuing need to care for adult daughter who is seriously intellectually disabled and is unable to be separated from the wife – relevance of wife’s post separation savings PRACTICE & PROCEDURE – Costs – section 117 matters – offer to settle factor considered – wife ordered to pay husband’s costs. |
Family Law Act 1975 (Cth), ss.75(2), 75(2)(a), 75(2)(b), 75(2)(c), 75(2)(d), 75(2)(e), 75(2)(f), 75(2)(g), 75(2)(o), 79, 117, 117(a), 117(2), 117(2A), 117(2A)(a), 117(2A)(b), 117(2A)(c), 117(2A)(d), 117(2A)(e), 117(2A)(f), 117C
Lee Steere v Lee Steere [1985] FLC 91-626
Ferraro v Ferraro [1993] FLC 92-335
Clauson v Clauson [1995] FLC 92-595
Russell v Russell [1999] FLC 92-877
Penfold v Penfold (1980) 144 CLR 311
| Applicant: | A D |
| Respondent: | H D |
| File No: | DGM 1295 of 2003 |
| Delivered on: | 2 April 2004 |
| Delivered at: | Dandenong |
| Hearing Date: | 31 March 2004 |
| Judgment of: | Bryant CFM |
REPRESENTATION
| Counsel for the Applicant: | Ms M Barbayannis |
| Solicitors for the Applicant: | Barbayannis & Co |
| Counsel for the Respondent: | Mr Howe |
| Solicitors for the Respondent: | Leo Dimos & Associates |
ORDERS
The wife pay to the husband the sum of $94,352 within 14 days.
Contemporaneously to the payment by the wife the husband do all things and sign all documents necessary to transfer to the wife at her expense his right, title and interest in the property situate in the state of Victoria.
The wife indemnify the husband against all liability in relation to the said property.
Unless otherwise specified in these orders and save for the purposes of enforcing any moneys due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other, to property (including choses in action) in the possession of such party as at the date of these orders (the furniture, possessions and like chattels in the said property being deemed to be in the possession of the wife);
(b)each party retain any superannuation benefit belonging to them and forgo any claim they have to any superannuation benefits belonging to or earned by the other;
(c)insurance policies remain the sole property of the owner named therein;
(d)each party be solely liable for and indemnify the other against any liability in relation to any item of property to which that party is entitled pursuant to these orders.
The applications otherwise be dismissed.
That in addition to the payment in paragraph 1, within 14 days the wife pay to the husband the sum of $2500 towards the husband's costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT DANDENONG |
DGM 1295 of 2003
| A D |
Applicant
and
| H D |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter involves property settlement applications between the husband and wife who have never been divorced but have been separated since 1985. The parties were married on 4 November 1977. They have one child who is now 26 but seriously intellectually disabled. D lives with the wife and has done so since separation. The husband has allowed the wife and D to occupy the former matrimonial home following separation and he has lived in rental property since that time.
The husband and wife are now aged 68 and 66 respectively. Both are in receipt of a pension.
The present proceedings were commenced by an application filed on behalf of the husband on 19 June 2003. The husband seeks an order that he receive one half of the matrimonial assets. In particular in this case what he is seeking is 50 per cent of the value of the former matrimonial home and some shares owned by the wife. He is content that the wife retain the former matrimonial home as long as he receives a sum representing his 50 per cent share.
The wife has filed a Response and wants to keep the property. She seeks an order that she pay to the husband a sum which represents 22.5 per cent of the former matrimonial home.
The relevant law
The law that I am applying in this case is found in s.79 of the Family Law Act 1975 (Cth) (the Act). The approach to the determination of an application under s.79 is well established by authority (see Lee-Steere v Lee-Steere [1985] FLC 91-626, Ferraro v Ferraro [1993] FLC 92-335 and Clauson v Clauson [1995] FLC 92-595). The process ordinarily involves a multiple part procedure. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined in s.79(4); and thirdly, evaluating the matters contained in s.75(2) insofar as they are relevant.
In determining what order the Court should make under s.79 the Court must be satisfied in all the circumstances that it is just and equitable to do so (see s.79(2)). It is the justice and equity of the actual orders that the Court must consider (see Russell v Russell [1999] FLC 92-877). Section 75(2) of the Act sets out the matters which must be taken into account by the Court when determining applications with respect to maintenance. This is the prospective element of the determination of an application for property settlement. The assessment of contributions during the marriage up until the time of hearing is the retrospective element.
I am required pursuant to s.79 to consider firstly, the assets of the parties and to make findings as to what assets constitute the assets and financial resources of the parties and their value. Secondly, I am then required to consider the contributions that the parties have made to the acquisition, conservation and improvement of the assets of the parties or either of them during the period from the commencement of cohabitation up to the date of the hearing. I am then required to consider the matters in s.75(2) of the Act to determine whether there should be any further adjustment by reason of any of the matters in s.75(2). Finally, as the Full Court said in Russell v Russell, I am required to consider when determining what order should be made whether in all the circumstances that order is just and equitable.
I therefore first turn to the question of the asset pool. The parties have agreed that the former matrimonial home has a value of $287,500. The home consists of what was a shop and dwelling, although the shop itself now forms part of the dwelling. The property is unencumbered. The wife has Telstra shares which presently have a value of about $4000. In addition, the wife has acquired savings, which together with the sale of some other shares, presently total approximately $110,000. Those savings have been acquired since separation. The husband did not claim any part of the wife's savings as such. However, when considering the assets of the parties I am required to take into account all of the assets of the parties and consider the respective contributions to each of those assets.
I find, therefore, that the assets are as follows:
i)The former matrimonial home with a value of $287,500.
ii)The wife's Telstra shares valued at approximately $4000.
iii)The wife's savings of approximately $110,000.
The total asset pool is therefore $401,500. There are no liabilities.
D also has some savings, approximately $54,000, which have been saved with the wife's assistance from her pension entitlements and placed into an account in her own name. The parties concede that these funds are D's and they should not be taken into account in the property settlement.
The former matrimonial home was acquired in 1978 for $58,000. The parties lived in the dwelling and conducted a milk bar business from the shop for a period until separation. At separation they divided up the cash they had available from takings of the shop and the husband left the wife and D in occupation of the premises. The shop has not been operated as a shop business since that time. Since then the husband has lived in various locations in rented premises and for part of that time he has simply rented a room.
During the cohabitation the husband was the major breadwinner, but I find that when they ran the business the wife assisted. The milk bar was operated seven days a week and no other staff were employed. I do not accept the husband's version the wife assisted him only infrequently and for very short periods. The wife's evidence was clear and she had a good recollection of and explanation for what occurred.
Notwithstanding her responsibility for the care of D, she was required to assist the husband at all times when he was unavailable in the shop and for whatever reason. As they did not employ other staff I find that this assistance was not inconsiderable. In addition, the wife did the paperwork for the shop and was responsible for the shopping, cooking and housework. But the major role played by the wife during cohabitation and subsequently has been her care of D who, despite her age of 26 has the mental age of a child. She is unwilling to be separated from the wife and has been cared for exclusively by the wife both prior to and since separation. For example, her need and dependency upon the wife meant that she accompanied her to Court and was present just outside the Court during the proceedings.
It is hard to over-empathise the commitment the wife has made and will continue to make to the unrelenting and full‑time care of another person unable to care for themselves. The wife received no financial support or other forms of support from the husband after separation for D or herself. However, his contribution to the household was to allow the wife and D to occupy the former matrimonial home for nearly 20 years and to live in extremely modest circumstances himself during that period. For most of that period the husband was not working and was in receipt of a Newstart allowance so that in any event there was little opportunity for any financial contribution to be made by him. Nevertheless, even if he could not make a financial contribution, he did not contribute by assisting the wife in the care of D in anything other than a very cursory manner and on very few occasions during the period since separation.
The wife is dependent upon a pension for herself and D, but she has been more industrious and frugal than the husband. She has had some part‑time work from time to time doing menial tasks such as cleaning and also assisting with some aged-care nursing. As a result of her frugality she has been able to save at least $106,000 which forms the major part of the cash savings to which I have referred. The savings have been possible partly because the wife has supplemented her pension with some income from part‑time employment. It has also been possible, as I have described, for D to save from her pension about $54,000 in her own name.
The main reason the wife and D have been able to save is the frugality of the wife's existence. Her responsibility to look after D and her limited capacity to therefore enjoy any life outside home has meant that her needs have been mainly confined to food for both of them, moderate clothings and outgoings on the house. This has enabled the wife to save in the manner that I have described.
The wife has also been conscious of the fact that when she is no longer able to care for D she will need to leave her with sufficient assets to provide for her care. Her industriousness in saving has been directed to this provision. The husband concedes that he has made no direct contribution to the savings of the wife since separation. The wife and D enjoyed the benefit of occupation of the former matrimonial home to the exclusion of the husband. The wife has paid rates, insurance and approximately $50,000 in maintenance and improvements to the home.
Notwithstanding the husband's evidence to the contrary, I accept the wife's evidence that his visits to them were minimal. Apart from one occasion which he gave her $50 to buy a present for D which she did, he did not contribute financially to their support. Between 1985 and 1995 the husband made some occasional visits to the wife and D. Between 1995 and 2000 the wife lost contact with the husband and after she made contact again in 2000 there were a few visits and some consideration was given to a reconciliation which did not happen.
Conclusion
Prior to cohabitation both parties contributed to the acquisition, conservation and improvement of the assets of the parties which was then the former matrimonial home. The husband made the greater financial contribution but the wife's contribution as homemaker and parent was significant. She also assisted in the shop. Even prior to separation the responsibility for the care of D was a significant responsibility and a significant contribution.
After separation the wife has made substantial contributions as a parent to D involving her total care and responsibility unrelentingly for her.
The husband has made contributions indirectly by allowing the wife and D to live in the former matrimonial home and to postpone his entitlement to any interest in the property so that the wife and D could continue to live there and be housed. That too, in my view, is a significant contribution but is outweighed, in my view, by the wife's contribution both before and after separation for the care of D.
I assess the contributions having regard to these matters as approximately 60 per cent to the wife and 40 per cent to the husband in relation to the former matrimonial home. I do not regard the husband as having made any contributions to the wife's savings, however, expressed as a percentage of the total pool as I believe I am required to do, I assess the husband's contribution at 30 per cent and the wife's contribution at 70 per cent.
Section 75(2) factors
I turn now to the matters in s.75(2) which I consider relevant.
(a) The age and state of health of the parties
Both parties are beyond the age when they would normally be expected to work and are in receipt of an age pension. The husband has diabetes and in February this year he was operated on for gangrene and one toe had to be removed.
(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
Both of the parties have similar needs as far as their own support is concerned. The income, property and financial resources of the parties are those which I have described as part of the asset pool and neither of them at their age have any capacity for gainful employment.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
There is no child who has not obtained the age of 18 years, I propose to consider the care of D under subsection (o) of the Act.
(d) commitments of each of the parties that are necessary to enable the party to support themselves
Each of the parties has commitments which require them to support themselves and, as I have said, each of them have some requirements.
(e) the responsibilities of either party to support any other person
This subsection involves the responsibility by the parties to support any person. The wife has a responsibility to care for D, although it is not a responsibility in a legal sense and D is maintained, at least in income terms, by the pension that she receives.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit
Neither party has any superannuation entitlement. They both are in receipt of an age pension.
(g) where the parties have separated or the marriage has been resolved, a standard of living that in all the circumstances is reasonable
The husband's case is that he has for a number of years been denied a standard of living in all circumstances that is reasonable as a result of his having given up his occupation of the former matrimonial home and having not sought a property settlement prior to this date. He now wishes to have a standard of living that is a reasonable one and to have some funds from which he can at least, if not purchase a home, have some reasonable accommodation of his own.
(o) any other relevant matters
The other matter which in my view is relevant falls under subsection 75(2)(o) and is the wife's continuing need to care for D. As I have described, this is a full‑time and unrelenting task which the wife will undoubtedly carry out for the rest of her life, at least until she becomes unable by virtue of her own health to do so. During her own lifetime she then may have to arrange for someone else to care for D at a cost. As I have said, she is anxious to provide for D after her death. This is, in my view, a significant matter.
In the end, having considered the matters under s.75(2), there are two factors which I consider to be significant. The first is the wife's responsibility to care for D which I have described. The second, which favours the husband, is on the basis of the amounts that I have attributed to each of the parties by virtue of their contributions. The wife has the majority of the assets and is in a much stronger financial position than the husband. I need to weigh up both of these matters and in doing so, in my view, there should be a further small adjustment by virtue of s.75(2) factors in the wife's favour of 6.5 per cent. I am satisfied that her responsibility to care for D is a significant and ongoing one and warrants an adjustment notwithstanding that there must also be consideration taken for the fact that she has substantially more assets than the husband.
Thus, in conclusion I find that having regard to the contributions of the parties and the factors under s.75(2) the assets should be divided as to 76.5 per cent to the wife and 23.5 per cent to the husband. The asset pool total is $401,500. The husband is then entitled to receive a sum of $94,352. Expressed in a slightly different way, which is the way the parties originally presented their case, that amounts to a percentage of about 32.5 per cent to the husband from the assets comprising the former matrimonial home and the shares.
The last matter that I need to consider is whether the orders are just and equitable. As a result of the orders that I propose to make the wife will be able to pay out the husband and meet other expenses and be able to retain the former matrimonial home in which she and D will continue to live. The husband will have a sum from which it may be possible for him to acquire accommodation of his own or at least he will have a sum on which he can contribute funds to the provision of better accommodation than he has previously had. In all the circumstances I am satisfied that the orders are just and equitable as required by the Act.
Costs
I am asked to make an order for costs pursuant to s.117 of the Act arising out of the orders that I have made. Section 117 provides that subject to subsection (2) of s.117A(a) each party shall bear their own costs. The High Court in Penfold v Penfold (1980) 144 CLR 311 said that s.117 creates no presumption either against an order for costs being made or in favour of it, but each case must be considered on its own facts. Section 117(2A) sets out the matters to which the Court must have regard and are as follows:
(a) the financial circumstances of each of the parties to the proceedings.
In this case I have described the parties' financial circumstances. The orders as they stand at the present time, leaving aside D's savings, would leave the wife with probably enough to pay her own costs but then there are savings that D has of her own. The amount being paid to the husband he is required to meet his own legal costs and to also require accommodation.
Subsection (b) requires me to consider whether any of the parties are in receipt of legal aid. The parties were not in receipt of assistance by legal aid.
Subsection (c) requires me to consider the conduct of the parties in relation to the proceedings. There is nothing in the conduct of the parties in relation to the proceedings which in my view is relevant.
Subsection (d) requires the Court should consider whether the proceedings were necessitated by the failure of a party to comply with previous orders. There is nothing relevant about the failure of a party to comply with orders.
Subparagraph (e) requires the Court to consider whether any party has been wholly unsuccessful. Neither party has been wholly unsuccessful.
Finally, subsection (f) requires the Court to consider whether there have been any offers to settle the proceedings and whether either party made an offer in writing to the other party to settle the proceedings and the terms of such an offer. In this case the husband has made an offer on 23 October 2003 to settle the proceedings by receipt of payment of $90,000. As a result of my orders, he has done better than that and as a result he seeks an order for his costs since that date of $5500.
I accept that the wife is in a difficult position financially and has the care of D. The husband also is in a difficult position financially. I take those matters into account, but in my view, it is appropriate to make some order for costs in favour of the husband. That is because, in my view, it is important for parties to be able to make reasonable offers of settlement in the hope that the matter can be compromised at the time of such an offer and that both parties will then not have to incur further costs. This is what the husband did in October, which I note was just after the conciliation conference when the parties had been discussing the matter, and he has now obtained an order which is slightly better than that.
However, I also take into account that he is now better off as a result of my order and having regard to the financial circumstances of the parties I am prepared to make an order for costs but something less than has been sought on behalf of the husband. I note that once he pays his costs he will be in a position where he would at least have $90,000 clear. I therefore propose to order that the wife pay the sum of $2500 towards the husband's costs.
I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Bryant CFM
Associate: Peter Smith
Date: 15 April 2004
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