Dabrowski and Thurston
[2009] FMCAfam 1222
•24 November 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DABROWSKI & THURSTON | [2009] FMCAfam 1222 |
| FAMILY LAW – Property settlement – property including real property in Poland – assessment of contributions – assessment of s.75(2) considerations. |
| Family Law Act 1975, ss.75(2), 79 |
| Hickey & Hickey; A-G for Commonwealth (Intervener), [2003] FamCA 395, (2003) FLC 93-143, (2003) 30 Fam LR 355 C & C, [2005] FamCA 429, (2005) 33 Fam LR 414, (2005) FLC 93-220 |
| Applicant: | MS DABROWSKI |
| Respondent: | MR THURSTON |
| File Number: | PAC 2820 of 2008 |
| Judgment of: | Halligan FM |
| Hearing dates: | 29, 30 July & 17 November 2009 |
| Date of Last Submission: | 17 November 2009 |
| Delivered at: | Parramatta |
| Delivered on: | 24 November 2009 |
REPRESENTATION
| Counsel for the Applicant: | Ms Druitt |
| Solicitors for the Applicant: | Jay Olszanicki, Solicitor |
| Counsel for the Respondent: | The husband appeared in person |
ORDERS
Within 3 months, the wife shall-
(a)pay the sum of $244,409 to the husband; and
(b)cause the mortgage secured on the property situate at Property L, New South Wales (the property) to be discharged.
On compliance by the wife with order 1, the husband shall-
(a)do all things and sign all documents necessary to transfer to the wife all of his right, title and interest in the property; and
(b)vacate the property.
If the wife does not comply with order 1, then the parties must forthwith upon one making a request to the other in writing, sign all documents and instruments and do all things necessary to list for sale the property at a listing price agreed upon between them with a real estate agent agreed upon between them and shall proceed to sale of the property at a sale price agreed upon between them and following such sale the proceeds of sale shall be applied as follows:
(a)In adjustment of rates on settlement;
(b)In payment of agent’s commission (if any) on sale;
(c)In payment of legal and all other proper costs of sale;
(d)In discharge of the registered mortgage in favour of the National Australia Bank secured over the property;
(e)In payment to the husband 48% of the balance.
(f)In payment of the balance to the wife.
In the event that Order 3 operates and the property does not sell by private sale within 4 months of being listed for sale, then the parties must forthwith upon one making a request to the other in writing, sign all documents and instruments and do all things necessary to list the property for sale by public auction with an auction agent agreed upon between them at a reserve price agreed upon between them and shall proceed to a sale at a sale price agreed upon between them and the parties shall be equally responsible for all costs and expenses of the auction payable prior to the auction sale and following such sale the proceeds of sale be applied as provided in Order 3 above.
In the event that Order 4 operates and the property does not sell by public auction in accordance with order 4, the parties must forthwith upon one making a request to the other in writing, sign all documents and instruments and do all things necessary to resubmit the property for sale by public auction in accordance with the provision of order 4 and to resubmit the property for sale by public auction at 6 monthly intervals from the last public auction and be resubmitted for sale by private treaty between such auctions, until the property shall be sold and upon such sale either by public auction or private treaty the proceeds of sale shall be applied as provided in order 3.
In the event that Orders 3, 4 and/or 5 operate and the parties are unable to reach agreement in relation to an auction agent, a real estate agent, a listing price, a reserve price or a sale price whether a sale by public auction or by private treaty then the parties shall and do hereby appoint the President for the time being of the NSW Division of the Australian Property Institute or her/his nominee to determine such disputed matter or matters and the parties shall thereafter act in accordance with that determination and the parties shall be equally responsible for the costs and expenses of the President of her/his nominee in making such determination.
By consent, the parties shall do all things and sign all documents so as to cause the transfer of the Property S time share units into the names of Ms T and Mr T.
Within 28 days, the husband shall notify the wife’s solicitor in writing which of the lists of personal property, being Annexures Q and R to the wife's affidavit sworn and filed on 10 July 2009, and headed respectively “List A” and “List B”, he chooses, and thereupon the husband shall be solely entitled to the exclusion of the wife to the property on that list and the wife shall be solely entitled to the exclusion of the husband to the property on the other list.
If the husband fails to comply with the preceding order, within 42 days, the wife shall notify the husband in writing which of the lists of personal property, being Annexures Q and R to the wife's affidavit sworn and filed on 10 July 2009, and headed respectively “List A” and “List B”, she chooses, and thereupon the wife shall be solely entitled to the exclusion of the husband to the property on that list and the husband shall be solely entitled to the exclusion of the wife to the property on the other list.
The husband is the sole owner in law and in equity as between himself and the wife of all items of personal property, financial assets and financial resources currently in his power, possession or control other than as specifically dealt with elsewhere in these orders, including any property held in his name in Poland.
The wife is the sole owner in law and in equity as between herself and the husband of all items of personal property, financial assets and financial resources currently in her power, possession or control other than as specifically dealt with elsewhere in these orders, including any property held in her name in Poland, any items purchased by her since separation, and the following household items:
(a)All original oil paintings;
(b)Chandeliers and candelabras;
(c)Glass, dinner and cutlery sets;
(d)Kitchen electrical small appliances;
(e)Fridge;
(f)Baryman wardrobes;
(g)Reproduction antique lounge suite;
(h)Carved coffee table;
(i)Teak dinner suite;
(j)Small teak tables
(k)Sofa bed;
(l)Lamps.
In the event that either party refuses or neglects to comply with any of these orders in relation to the execution of any deed, instrument or document the court appoints and authorises pursuant to section 106A of the Family Law Act the Registrar of the Federal Magistrates Court, Parramatta Registry, to execute such deed, instrument or document in the name of the party who so refuses or neglects and further appoints that Registrar to do all acts and things necessary to give validity and operation to the deed, instrument or document.
IT IS NOTED that publication of this judgment under the pseudonym Dabrowski & Thurston is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAC 2820 of 2008
| MS DABROWSKI |
Applicant
And
| MR THURSTON |
Respondent
REASONS FOR JUDGMENT
Introduction
These are property proceedings under the Family Law Act 1975.
The wife seeks orders that within six weeks the husband transfer to her his interest in the parties’ former matrimonial home and vacate the home, and that simultaneously she pay him $180,000 and secure his release from the obligations under the mortgage secured on the home. In default of the payment to the husband, the wife proposes that the former matrimonial home be sold and the net proceeds be divided as to $180,000 to the husband and the balance to the wife. The wife seeks that the contents of the home be divided by the husband retaining the property contained in whichever list of the two she prepared he chooses. Otherwise the wife seeks that each party retain property in his or her power, possession or control, with the exception of specific items she seeks to retain..
The husband, who has at all times represented himself, sought orders in his response and in one of his affidavits, the import of some of which was unclear. At the commencement of the hearing, and again in final submissions, I sought to clarify with the husband what he sought. As best I understand it, he seeks that the wife transfer to him her interest in the former matrimonial home and that he refinance the mortgage secured on the home, that he retain the contents of the home except for specific items he conceded could be retained by the wife, that his suggested half interest in a property in Poland be transferred to the wife together with its contents except for specific items he sought to retain, and that the parties retain their respective superannuation interests. Various other matters the husband sought to raise both in his response and in his affidavit were ultimately abandoned by him, as I understand it. Certainly, some of them appear to be beyond jurisdiction of this court, some appear to be claims more properly made against the wife's parents than the wife, and others are based on matters about which there is simply no evidence.
Background
The wife was born [in] 1956, and is aged 53. The husband was born [in] 1955 and is 54. The parties married [in] 1981 in Poland. The wife asserts the parties separated on 10 June 2003, while the husband asserts they separated on 23 April 2005. The parties have both continued to live in the former matrimonial home. Their marriage was dissolved on 4 August 2008, the divorce becoming final on 5 September 2008.
There are two children of the marriage, Mr T born [in] 1981, aged 28, and Ms T, born [in] 1982, aged 27.
The family migrated to Australia from Poland in February 1992 on skilled migrant visas.
Credit of the witnesses
In addition to her own evidence, the wife relied on affidavit evidence of her father and a valuer. The husband relied on his own evidence alone.
No issue arose about the credit of the wife's valuer. His opinion of the current value of the former matrimonial home was not contested. The husband cross-examined him apparently to elicit his opinion whether certain landscaping work had improved the value of the former matrimonial home, and if so, by how much.
On the second day of the hearing, the wife applied for leave for her father to be cross-examined by phone from Poland, using the Polish interpreter in court to assist the wife. Leave was granted in the absence of objection from the husband. It seemed the husband had some forewarning of the application, as he had provided copies of documents on which he wished to cross-examine the wife's father to the wife's solicitors the previous day. The wife's solicitor had emailed copies of the documents to the wife's father, but when the husband first attempted to take the wife's father to the content of a document the witness had received, the witness said the copy was illegible. I therefore revoked the leave to the wife to have her father cross-examined by phone, as it was clear the husband could not effectively do so by phone in the circumstances. I take the view therefore that the wife's father was not made available for cross-examination, and where his evidence differs from the husband's, I am not prepared to place any weight on it.
The wife was shown to be less than frank and honest in aspects of her evidence. Her evidence that she had only once sent money to her father in Poland, being a sum of $10,000 for renovations to an apartment, was untrue, she having in addition sent him $70,000 a mere four months before giving this evidence. Even when presented with the funds transfer documentation she completed to transfer the $70,000 to her father, the wife failed to tell the truth. The evidence she then gave that the $70,000 was to repay a loan was also incorrect, as was her description of the purpose of the funds transfer on the funds transfer documentation itself.
The wife gave inconsistent answers when asked if her parents had written expressing gratitude for the hospitality provided by the husband and wife when the wife's parents visited and stayed with the parties during the marriage. The wife's evidence that the parties lived with the husband's mother for a period was also inaccurate, as the husband's mother in fact vacated her apartment and lived with a friend to allow the parties sole use of her apartment. She gave contradictory evidence about what the parties’ savings remaining after the purchase of the former matrimonial home were used for.
While these matters in my view are insufficient to generally destroy her credit, they do in my view damage her credibility generally, and warrant her evidence on controversial matters being carefully scrutinised.
The husband frequently did not respond to questions asked of him, or digressed to matters not pertinent to the question. When I drew his attention to the potentially adverse consequences of continually failing to respond to questions asked of him in cross-examination, the incidence of non-responsive answers markedly decreased. I was not satisfied his non-responsive answers were a product of prevarication, but rather the result of English not being his native tongue and his particular style of discourse. He appeared to readily make concessions to the wife, for example in relation to the wife's summary figures as to the parties’ respective financial contributions from 2003. I was not satisfied that the husband’s credit was successfully challenged, and I accept him generally as a truthful witness. However, his recollection of when certain events, including relatively recent events, occurred, was shown to be poor, for example his evidence as to seeking employment. I therefore consider that some caution is warranted with his evidence because of his apparent poor recollection of past events.
The evidence
The wife’s parents set up a savings account in her name when she was three to gain eligibility for the wife to apply for allocation of an apartment under the then Communist regime in Poland. When she turned 18, her parents enrolled her in a housing co-operative and paid the deposit, in an unspecified amount, to place the wife on a waiting list for the allocation of an apartment.
When the parties married [in] 1981, neither party had any significant assets.
The wife worked full time from marriage until the parties migrated to Australia, taking four months paid maternity leave after each child was born.
I am satisfied that after the husband was awarded his Masters degree, and while studying for his PhD, he worked as a lecturer, and in addition, in 1981 and 1982 he worked in consultancies and on occasions had two jobs.
From marriage until the allocation of an apartment the parties could live in, the parties lived first with the wife's parents for five years, and then in the husband's mother's apartment for four years. When the parties resided with the wife's parents, they assisted with child care, purchases of necessary items, and cooking. As mentioned, the husband's mother vacated her apartment for the parties.
In 1990, the wife was allocated an apartment, the size of which was related to the size of the family, two adults and two children. I am not satisfied the allocation of this apartment was in any way connected with the husband's academic achievements, as he contended. The wife paid an allocation fee equivalent to no more than two months salary from her income. In addition, the funds saved in the wife's name by her parents were used in gaining or taking up the allocation of the apartment. There is no evidence as to the amount of those savings. The wife did not acquire ownership of the apartment at that time. To the extent that the wife's income equivalent to no more than two months’ salary was applied to acquire the right to occupy this apartment, the husband has made at least an indirect financial contribution to securing or taking up the allocation of this apartment.
On the allocation of the apartment, the wife’s parents gave the parties linen and household items, and paid for all the furniture in the living room and kitchen and for carpets for the apartment.
As mentioned, the family migrated to Australia in February 1992. When the parties vacated their apartment, the wife's parents moved into it and rented out their own apartment. The wife's father said that he and his wife were invited by both the parties to move into the apartment the parties were vacating to move to Australia.
The husband said that he wanted to rent out the apartment they were vacating but at the insistence of the wife and her parents, the wife's parents moved into the apartment and rented out their own apartment. The husband said that in the first year or so the wife's parents sent the parties the net rental income after deducting renting agent’s fees, levies and taxes. He annexed to his affidavit a document in Polish that he said was a letter from the wife's father to the parties accounting for the rent for the period 1 March to 31 December 1992. It was a copy of this document on which the husband first sought to cross-examine the wife's father, but could not as the copy sent to him by the wife's solicitor was illegible.
However, while the husband attempted to put this document to the wife's father, he did not put it to the wife during his cross-examination of her. On the other hand, while at the commencement of her oral evidence the wife gave evidence updating her financial circumstances, including in response to a matter raised in the affidavit in which the husband contended the accounting for rent by the wife's father to the parties, the wife did not deny the husband's evidence on this point. The affidavit making these allegations was filed by the husband the day before the hearing commenced.
The husband's evidence that he wanted to rent out the apartment but was overruled by the wife and her parents infers there was no agreement to rent out the apartment, to the wife's parents or anyone else. He did not assert any agreement with the wife's parents that they would pay rent to the parties for their occupation of the apartment the parties vacated. The suggestion then that the letter from the wife's father was an accounting to the parties for rent is difficult to understand.
To the extend to which it could be relevant to the property settlement between the husband and the wife, I am not satisfied that there was any agreement for the payment by the wife's parents of moneys to the parties or to the wife alone in return for occupying the apartment the parties vacated. It is an asset that did not derive any income for the benefit of the parties after they vacated it.
When the parties came to Australia, they had savings of $20,000.
The wife has been in constant employment in Australia since 1994. The husband was in employment from 1993 to 2001. Since 2003, the husband has only worked intermittently and briefly.
In 1995, after the law in Poland changed to allow private property ownership, the wife exercised a right to convert her tenancy of the apartment in Poland to full ownership. It cost the equivalent of $3000 to do so, which was paid by her father. Her parents continue to live in it, and have continued to lease their own apartment.
In August 1996, the parties purchased the former matrimonial home at Property L, using savings of $70,000, a gift from the wife's parents of US$10,000 , which the wife said was equivalent to about A$12,500, and a $226,000 home loan. The parties had about $10,000 of savings left after purchasing the former matrimonial home, which was used to buy necessities for the house.
The wife received various monetary gifts from her parents in Australia, in addition to the gift used in the purchase of the former matrimonial home. Including the gift to assist in purchasing the former matrimonial home, between 1996 and December 2001, she received a total equivalent to $38,629 from her parents, of which a total of $28,018 was directly contributed by the wife to the acquisition of the former matrimonial home and the reduction of the mortgage on it, and the remaining $10,611 she contributed towards living expenses including mortgage repayments.
As previously alluded to, the wife sent $10,000 to her father in Poland to be applied towards renovations to his apartment. I infer this occurred during the parties’ cohabitation. The $70,000 the wife sent to her father in March 2009, of which $15,000 was to repay a loan and the balance was a gift, was saved by the wife from her earnings after separation. I am not satisfied the husband made any contribution to the $70,000.
The wife's father visited the parties in Australia three times and her mother twice. They each stayed with the parties during their visits, for two and a half years in aggregate. They paid for their own travel expenses, the parties providing them with accommodation at the former matrimonial home. They did not contribute to the household living expenses while living in the former matrimonial home.
In mid 2001, the wife received $6,915 for accrued long service leave, which she deposited to the home loan account. In the same year, the husband received a $45,000 redundancy payment most of which was paid into the home loan account.
As mentioned, the parties differ as to the date of separation. The wife said the husband moved out of the matrimonial bedroom in 2002, but up to 10 June 2003 had returned to the matrimonial bedroom on several nights. The wife said that on 10 June 2003 she told the husband the marriage was over and asked him to move out of the home, to which he responded she should move out. She said that thereafter the husband stopped coming to the matrimonial bedroom. She said that for two weeks in December 2004 the parties were intimate on several occasions, but they continued to sleep in separate beds and she did not change her opinion that the marriage was over. During this period the parties undertook a day trip together to the Hunter Valley. In December 2003, after the wife said she had advised her parents that the parties had separated, her father sent a letter in an envelope addressed to both parties at the former matrimonial home. The absence of any explanation why the wife's father would have done so after being advised the parties were no longer cohabiting in my view calls the wife's evidence as to separation and telling her parents of the separation into doubt. The reservations I have previously expressed about the wife's credit cause me to view the fact of this correspondence from the wife's father as significant in calling the wife's evidence as to separation into question.
The wife first sought a divorce in 2005, the application being served on the husband on 23 April 2005. That is the date the husband asserts the marriage ended. The husband opposed this divorce application, and it was dismissed, the wife not appearing to prosecute it. This further calls into question her contention as to the date of separation.
It is also relevant in my view that the wife continued to deposit her income to the parties’ joint bank account until August 2004, 14 months after the wife said the parties separated.
Considering all the evidence, and because of the concerns I have as to the wife's credit, I am not satisfied the parties separated before 23 April 2005.
From 10 June 2003 until August 2004, when the wife's income ceased being deposited into the joint account, the wife deposited a total of $55,400 and the husband deposited a total of $15,000 into the joint account. During this period, the parties met the mortgage repayments and their bills and expenses from this account, each party withdrawing funds for his or her own separate living expenses.
In August 2004, the wife opened a bank account in her sole name, and thereafter her income was deposited to this account. She transferred money into the joint account for mortgage repayments and joint expenses. From August 2004 until 18 June 2008, the wife paid a total of $25,106 into the joint account and the husband deposited a total of $15,461 into that account.
The wife closed the joint account in June 2008, and thereafter has made mortgage repayments from her separate account. From June 2008 up to the swearing of her primary affidavit on 10 July 2009, the wife paid $9,000 in mortgage repayments and the husband paid nothing. During this period the wife said she paid $3,536 towards rates and bills, purchase and installation of a new hot water tank and for repairs to the inclinator at the former matrimonial home, while the husband contributed a total of $2,000 to these expenses. The husband denied only paying $2,000, asserting he had paid all the electricity bills, Foxtel subscriptions, council rates and NRMA house insurance during this period. However, he conceded when presented with the receipt that the wife in fact paid an electricity account in August 2008. He also accepted when presented with the documentary evidence that the wife had paid for AAMI house insurance in February 2009, but he was not aware of this, he had paid for house insurance with NRMA, and it seemed the house was covered by two separate insurance policies. I cannot on the evidence find that the husband paid more than the $2,000 asserted by the wife.
Thus, since June 2003, the wife has paid a total of $54,000 and the husband a total of $23,000 towards mortgage repayments, bills and expenses in relation to the former matrimonial home, and until August 2004 towards the parties’ separate living expenses.
After the parties migrated to Australia and until separation, the wife was responsible for all day to day domestic tasks including cooking, cleaning, washing and shopping, and for child care.
The wife made curtains and blinds for the former matrimonial home, upholstered various items of furniture, and gave the husband some, albeit relatively minor, assistance with some of the landscaping. The wife painted almost all the rooms in the house with some help from the husband. She worked in the garden, planting flowers and ornamental trees. She arranged repairs to appliances and the hot water tank.
The husband did basic maintenance and repairs around the home, and made some furniture. He spent considerable time in his workshop and in constructing very extensive terracing on the very steep block on which the former matrimonial home was erected, there being a difference in elevation of 60 metres between the front and the rear of the block. The wife gave the husband some, albeit relatively minor, assistance with the landscaping work. The husband moved very large quantities of sandstone and manually carved blocks of sandstone for use in the extensive terrace walls he constructed. There was an issue about one particularly high stone wall at the rear of the house, which I will refer to later in these reasons when dealing with the asset pool.
I am satisfied that the extent of the husband’s involvement in these activities left relatively little time to spend with the children. However, the husband did assist with the children, including by occasionally driving the children to school and he occasionally drove the wife to the university where she worked, but generally the wife and the children used public transport to get to and from work and school respectively.
The husband rebuilt the veranda and tiled it after it was severely damaged in a storm in about 2001. The damage was not insured. The husband was not then in paid employment. The wife said she helped the husband. She did not state how.
The husband installed a new vanity unit in the bathroom after the wife bought it. The husband seemed to assert that the wife maliciously or unnecessarily demolished the bathroom, necessitating this work. There is no particularity in his evidence sufficient to support such a finding.
The husband carried out renovations to the kitchen, which were never completed. Again the husband appeared to assert that the wife maliciously or unnecessarily damaged some of the work he had done, but in the absence of any particularity in his evidence, I cannot make such a finding. The wife spent $15,000 from her income on the renovations.
The husband rebuilt the inclinator platform. I am not satisfied that the wife was culpable in the circumstances that lead to the need for him to do this work. In any event, the evidence of the valuer, which I accept, is that the platform is in disrepair.
The husband installed under floor heating.
The husband is currently unemployed. He is working at home on various projects, but none have been productive of any remuneration. He last worked full time in 2005 or 2006 as a factory hand. He said he had applied for many full time positions. He said he was sure he had applied for positions in 2009, but could not recall the details. He said all his job applications were unsuccessful. He had also made a number of business proposals to various companies but none had been accepted. The evidence of the husband about these matters was quite vague.
The wife continues in full time employment.
I will not traverse certain other allegations the husband made against the wife in his affidavit evidence. Some are of a scandalous nature, and there is no evidence of the matters alleged beyond the husband's bald allegations. Some of them seem irrelevant to the current proceedings.
The applicable law
Property settlement proceedings fall to be determined by reference to s.79. The court may make such order as it thinks appropriate (s.79(1)), but must not make an order unless satisfied it is just and equitable to do so (s.79(2)). In deciding whether to make an order, and if so what order, the court must have regard to those of the considerations in s.79(4), including s.75(2), the provisions of which are incorporated into s.79(4) by reference, as may be relevant in a particular case.
In Hickey & Hickey; A-G for Commonwealth (Intervener), [2003] FamCA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355, the Full Court of the Family Court of Australia explained the preferred approach in determining property settlement proceedings under s.79, as follows (FamCA at [39]; FLC at 78,386; Fam LR at 370):
“39. The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEJ and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.”
Where one or both of the parties has a superannuation interest, the majority of the Full Court in C & C, [2005] FamCA 429, (2005) 33 Fam LR 414, (2005) FLC 93-220, said that the preferred course, whether a superannuation splitting order is sought or not, is to apply the s.79(4) and s.75(2) considerations to the superannuation interests separately from the other property, liabilities and resources.
It is the wife's position in this case that I should follow this course. The size of the superannuation interests in relation to the value of the other property is such as to render the alternate course of combining the superannuation interests in a single pool with the other assets inappropriate, in my view.
Where the superannuation is dealt with separately, the majority of the Full Court in C & C said (at [65] – [66])-
65. In summary, then, the trial Judge has a discretion as to how superannuation interests will be treated in a particular case. If superannuation is not included in the list of property but rather made the subject of a separate pool, it will be necessary where a splitting order is sought, or extremely prudent where no such splitting order is sought (in order to ensure that justice and equity is achieved) to:
(a) value the superannuation interest (according to the Regulations if an order under Part VIIIB is sought or according to the Regulations or otherwise if no order is sought);
(b) consider and make findings about the types of contributions referred to in s 79(4)(a), (b) and (c) which have been made by the parties to the superannuation interests on either a global approach or an asset by asset approach depending on the circumstances;
(c) consider the other factors in s 79(4) being the matters in s 79(4)(d), (e), (f) and (g); and
(d) ensure that pursuant to s 79(2) the orders in relation to the parties’ property, and any order under Part VIIIB in relation to superannuation interests are just and equitable.
66. In the context of a consideration of the matters referred to in sub-paragraphs (b) and (c) of the last paragraph, the following matters may well be relevant: the relationship between years of fund membership and cohabitation; actual contributions made by the fund member at the commencement of the cohabitation (if applicable), at separation and at the date of hearing; preserved and non-preserved resignation entitlements at those times; and any factors peculiar to the fund or to the spouse’s present and/or future entitlements under the fund.”
The parties’ assets, liabilities and resources
The parties jointly own an interest in a time share facility. They agree their interest in the time share should be transferred to their children and omitted from the pool of divisible assets, and have submitted Terms of Settlement (Ex A) to require them to effect the transfer to their children. I will make orders in accordance with this document.
Otherwise there was agreement as to the identification and value of much of the parties’ property, and as to their superannuation interests. The matters in issue are as follows.
Value of former matrimonial home
The value of the former matrimonial home was agreed at the figure attributed by the wife's valuer. However, the husband cross-examined the wife's valuer. As best I understand it, the purpose of that cross-examination was to seek the valuer’s opinion on the impact, if any, of the husband's landscaping work on the value of the former matrimonial home.
I accept the valuer’s evidence, he not being challenged on his opinions.
Real estate agents would be unlikely to bring prospective purchasers to inspect the property due to the risk posed by the state of the inclinator and the stairs at the former matrimonial home. Because of the dilapidated and dangerous state of the stairs, the valuer did not venture down the block beyond the house. Hence he did not see or inspect a four metre high stone wall behind the house.
However, based on photos he was shown, the valuer’s opinion, which I accept, is that the work depicted, which the husband performed, would increase the value of the home by between $10,000 and $15,000 provided the wall was not a retaining wall, or if it was, provided it had been built incorporating reinforcing steel. If it was a retaining wall and did not have reinforcing steel, the wall would not comply with council building regulations and would not affect the value of the home.
The husband agreed that an engineering certificate was required for structural walls over 600mm high, but contended the wall in question was part of landscaping, not a structural wall. He denied there was earth behind the wall, the valuer’s explanation of a retaining wall, saying that there were large boulders on the block pushed down the block previously, they were precarious and dangerous, and that old excavation material was behind the wall.
The evidence is equivocal whether the wall meets relevant council building regulations. The valuer did not see the wall. The husband appeared somewhat evasive in his evidence about whether this was a retaining wall, suggesting there was no soil behind it, but suggesting there was “excavation material” behind the wall. Photos of the wall clearly show plants growing at the top of the wall, which would require a growing medium of some kind to be behind the wall.
As I understand the conduct of the husband's case, he was attempting to show that his construction of this wall had increased the value of the former matrimonial home. The husband bears the onus of proving that the work met the condition precedent to the valuer’s opinion that it had increased the value of the home, that is that the wall was constructed to the requisite structural standards. In light of the uncertainty about whether it was so constructed, I am not satisfied it increased the value of the property.
Property in Poland – husband
The husband's mother died in Poland on 3 April 2005. She owned an apartment in Warsaw, and is survived by the husband and his sister. The wife said that when the husband's mother visited them in 2001, she said she wanted the husband and wife to have a half share and the husband's sister a half share of the apartment when she died. The husband said that in discussions he had with his mother and his sister before the parties migrated to Australia, and again when he visited his mother a few days before she died, his mother indicated that she wished her daughter to have her apartment. The husband said the initial proposal was on the basis that his sister would look after their mother, and she did so.
There is no clear evidence whether or not the husband's mother left a will, and there is no evidence about the law in Poland as to inheritance in the event of an intestacy.
It is the wife who asserts the husband has an interest in this property, and the onus is thus on her to prove her assertion. I am not satisfied she has done so. At best for the wife, I cannot prefer one party’s evidence over the other’s about what the husband's mother said on different occasions. At worst for the wife, for reasons previously given, I have some reservations about her credit as a witness, and would generally prefer the husband's evidence over hers.
Property in Poland – wife
The apartment initially allocated to the wife in Poland and occupied by the wife's parents since the parties came to Australia is still in the wife's name. The wife has now acquired the freehold interest in the apartment. The wife's parents retain their own apartment, which is rented out by them. The wife's suggested moral duty to support her parents cannot affect the legal title to this property.
I am not satisfied by the various matters put by the husband that he has any proprietary interest in this apartment. The evidence satisfies me that the apartment was allocated to the wife alone, and that the freehold was acquired in the name of the wife alone, even though the parties were married at the time of both events. The husband's assertion that under Polish law a spouse acquires a half interest in the property of the other spouse is not supported by any expert evidence as to the law of Poland. In any event, if it were so, one would expect that the allocation of the apartment and its subsequent purchase would have been in joint names, but it was not.
The wife did not call a valuer or appraiser as a witness to give opinion evidence of the value of this apartment. I am satisfied she attempted to do so, that she obtained a valuation report from a person qualified to express an expert opinion as to its value, but that person refused to swear an affidavit verifying his valuation report. Based on this report, the wife said she believed the apartment now to be worth 388,600 Polish zlotys, which she believed to be the equivalent of about $154,267. The husband asserted the property to be worth $260,525. There is no indication how he arrived at that figure.
In the circumstances, I am satisfied the value of the property is more likely than not about $155,000.
Personalty
I am not satisfied the wife has any items of jewellery other than those she said in cross-examination she had, namely a diamond ring from her mother, a 20gm 18 carat set from her parents, and some items she received from the husband. She had an engagement ring but would need to look for it. She received a “necklace and set” from the husband, some of which had been lost. There is no valuation evidence of any jewellery, and I am unable to take this any further.
The wife contended the contents of the home were worth $5,000 while the husband asserted they were worth $30,000. Neither adduced any valuation evidence. In the circumstances where there are issues that I am unable to resolve about whether some items were gifts or not, and where there is such a disparity in the suggested value of the contents with no valuation evidence to assist me, I intend to order that the contents be divided equally between the arties in specie in the manner suggested by the wife, and not bring the contents to account at any particular value.
The asset pools
As mentioned, I will treat the superannuation interests separately from the other assets and liabilities.
It was submitted on behalf of the wife that I should treat the wife's interest in the apartment in Poland separately from the other non-superannuation assets. Because of the circumstances surrounding its acquisition, and the quite modest contribution the husband made to it, as referred to later in these reasons, I am satisfied this is an appropriate course.
Thus I will identify three pools – the Australian non-superannuation assets and liabilities, the superannuation interests, and the wife's apartment in Poland.
The Australian non-superannuation pool is as follows:
Item Description Title Amount 1 Former matrimonial home Joint $530,000.00 2 Wife's motor vehicle Wife $11,525.00 3 Wife's savings Wife $7,250.00 4 Wife's shares Wife $215.00 5 Husband's motor vehicle Husband $1,000.00 6 Mortgage on former matrimonial home Joint -$20,824.00 7 Husband's Visa card Husband -$13,403.00 8 Wife's Visa Card Wife -$195.00 Total $515,568.00
The superannuation pool is as follows:
Item Description Title Amount 1 UniSuper Wife $257,379.00 2 Australian Public Superannuation Fund Wife $9,125.00 3 UniSuper Husband $905.00 4 Investment Management Ltd Husband $74,216.00 5 AMP Rollover Fund Husband $1,223.00 Total $342,848.00
As mentioned, I am satisfied that the wife's interest in the apartment in Poland is worth about $155,000.
The assessment of contributions
The parties cohabited from January 1981 to April 2005, a little over
24 years. Neither had any significant assets at marriage. Both parties worked in Poland and contributed their incomes, the wife taking only short periods of maternity leave around the births of the two children, from marriage or shortly thereafter, until early 1992, when they migrated to Australia. Thereafter, the husband worked and contributed his income from 1993 to 2001, and for short intermittent periods thereafter to separation in April 2005, while the wife thereafter worked and contributed her income from 1994 to separation. Since separation, the wife has continued in full time employment, and the husband's income has been very meagre. From June 2003 until July 2009, the wife has contributed a total of $93,042 to mortgage repayments, the parties’ joint living expenses while they were still cohabiting, and outgoings on the home, while the husband has contributed $32,461 for these purposes. The wife has also contributed $6,915 in accrued leave payments and the husband has contributed $45,000 in a redundancy payment.
The wife’s parents have given the wife a total of $38,630 in cash gifts from her parents, which she has contributed to the mortgage and living expenses. However, during the parties’ cohabitation she gave her father a gift of $10,000. I am satisfied that the $70,000 the wife sent her father in March 2009 was saved by the wife from income derived by her after separation to which the husband made no contribution.
Both parties’ parents assisted the parties with accommodation in Poland, and the wife's parents provided gifts to help the parties set up their own first home in the wife's apartment in Poland. The parental assistance to the parties is a contribution made on behalf of the particular parent’s child.
Throughout the parties’ marriage, the wife has been responsible for the household duties, and for most of the child care. She has painted the house with some unspecified help from the husband, made curtains and blinds, upholstered unspecified items of furniture, and gave the husband some minor assistance with landscaping, and did some gardening. She arranged repairs to appliances and the hot water tank.
The husband did basic maintenance and repairs to the home, made some furniture, and spent a very considerable amount of time over a long period carrying out extensive landscaping, including terracing a very steep block. However, the extent of the time he devoted to this task significantly affected his availability to assist with child care, casting an additional burden on the wife.
Assessing these various contributions in relation to the pool of Australian non-superannuation assets and liabilities, I am satisfied that the contributions favour the wife, due to the financial assistance from her parents, a net amount of $28,630, and because of the wife's greater financial contribution from 2003 onwards.
It was submitted on behalf of the wife that I should assess the contributions to this pool as favouring the wife in the proportions 82.5/17.5. This is said to be because of the gifts from the wife's parents, her contributions both as an income earner and homemaker and parent, and in particular her far greater financial contributions after June 2003.
However, in my view such an assessment would give totally disproportionate weight to the financial contributions over the last six and a half years of a total period of over 28½ years since the parties married. In my view, subject to the gifts from the wife's parents, the parties’ contributions up to June 2003 slightly favoured the wife, as she was both a full time income earner, as was the husband, for most of the marriage, but she also performed the household duties and the bulk of the child care, the share of which was increased by the long periods the husband spent building rock walls at the home, which it has not been shown improved the value of the property. While the husband's landscaping contributions are significant and relevant contributions, overall I am satisfied that the wife's non-financial contributions were somewhat greater than the husband's.
Having regard to the totality of the significant financial and non-financial contributions by each of the parties from marriage until separation, a period of over 22 years, the wife's parents’ gifts of $28,630 net, made over a period of a little more than five years from 1996 to 2001, cannot have a significant impact on the overall contributions to the date of separation. I would assess the wife's somewhat greater non-financial contributions and the gifts from her parents as tipping the contributions in the wife's favour by no more than 7.5%.
That the wife's financial contributions exceeded the husband's by a factor of nearly three to one in the last six years is clearly relevant, and must further tip the balance in the overall assessment of contributions in the wife's favour. However, it is not the case that over this period the husband made no contributions, and the mathematical comparison of financial contributions over a limited part of the relevant period risks undervaluing the significant non-financial contributions by both parties over many years.
Taking all the relevant contributions into account in relation to the parties’ Australian non-superannuation assets and liabilities, I am satisfied they favour the wife in the proportions of 62.5/37.5.
In relation to the parties’ superannuation interests, the value of the wife's interests have increased significantly since the parties separated. At June 2005, the wife's superannuation interests in Uni Super were worth about $148,000, and are now worth about $266,500.
The wife had three separate interests in Uni Super from before separation until they were combined in the one account in August 2007. No contributions were being made to two of those interests. The accretion in the value of those two accounts arose from fund earnings, or “investment returns” as they are described on the wife's member benefit statements.
The “active” interest to which contributions continued to be made (account number ending in 318) was worth about $39,000 at June 2005. It was an interest with an accumulation component then worth $5457 and a defined benefit component then worth $33,573. The two preserved interests (account numbers ending in 233 and 889) were then worth $96,095 and $13,069 respectively.
In August 2007, $16,917 from account ending 889 and $130,464 from account ending 233, were rolled over into account ending 318. The first member benefit statement for account ending 318 issued after the combination of the three accounts shows that the rolled over interests were credited entirely to the wife's accumulation interest in account ending 318.
The value of the wife's combined single account with Uni Super at the most recent date, 6 July 2009, is $257,379, comprising an accumulation component of $134,940.73 and a defined benefit component of $122,438.38.
The accretion in the wife's superannuation interests has in part been a result of the wife remaining in full time employment. Because the husband has not obtained consistent full time work since 2001, his superannuation interests have grown from fund earnings alone, and not from further contributions. There is no evidence to satisfy me that the husband either could not work, or that he was unable to find employment despite diligently seeking it. His evidence in chief did not address his attempts to find work, and he was vague on the subject in cross-examination.
It was submitted on behalf of the wife that the parties’ respective contributions to their combined superannuation interests should be assessed as favouring the wife 82.5/17.5. The husband’s position was unclear. At the commencement of the hearing he seemed to suggest that the superannuation interests should remain as they are. At the commencement of his final submissions he for the first time seemed to suggest that he wanted a superannuation splitting order dividing the superannuation interests equally. When I explained the difficulties that seeking such an order at such a late stage of the hearing would cause, he abandoned any suggestion of a superannuation splitting order, but it was unclear that he was saying that leaving the superannuation interests as they were was appropriate. In the circumstances, and because the husband was unrepresented, I proceed on the basis that the husband did not accept that leaving the superannuation interests as they were was an appropriate result unless some adjustment was made to the parties’ interests in other property to redress the imbalance in the superannuation interests.
In assessing the parties’ contributions to their superannuation interests, I take into account the parties financial and non-financial contributions to separation with the exception of the gifts from the wife's parents, which do not appear to have influenced the superannuation interests in any way, directly or indirectly. I also take into account the fact that from 2001 to separation in Apr 2005 the husband did not work apart from brief intermittent periods, despite there being no evidence he could not do so or could not after diligent attempts find appropriate employment. There is no evidence as to the value of the parties’ superannuation interests in 2001 when the husband last had regular employment. I am satisfied that at separation, the wife made a slightly greater contribution to the superannuation than the husband. Since separation, the wife, by maintaining employment whereas the husband did not, made a significantly greater contribution to the superannuation than the husband. However, even if the wife had not continued to work, like the husband, her superannuation interests would have continued to grow through fund earnings. Thus the measure of her unique contribution, unmatched by the husband, is the contributions and interest earned on them, and the increase in the defined benefit component, arising from her continued employment. There is no evidence as to how the defined benefit interest is calculated. There was no attempt to quantify either of these aspects of the wife's superannuation interests in the wife's case.
I also observe, as with the Australian non-superannuation pool, that the impact of significant financial contributions by one party late in a long marriage cannot prevent proper recognition in a relative sense of all the other contributions both parties made over a long marriage. In those circumstances, I take the view that the parties’ contributions to the combined superannuation pool favour the wife, 65/35. Her interests currently represent 78% of the total superannuation pool. In the absence of a superannuation splitting order, and subject to the assessment of the non-contribution factors, some adjustment in the husband’s favour from non-superannuation assets is warranted.
In relation to the wife's property in Poland, the only financial contribution made by the wife herself to its acquisition was no more than two months’ salary that she paid towards the allocation fee when the apartment was initially made available in 1990. All other financial contributions were made by the wife's parents on her behalf, in the form of the savings account they built up in her name that was also paid on allocation of the apartment, and the $3,000 paid to acquire the freehold interest in the apartment in 1995.
The husband has made an indirect contribution to this apartment to the extent that income of the wife during the marriage, of no more than two months salary, was applied towards securing the allocation of the apartment. There is no evidence of the amount of this contribution, and there is no evidence of the amount of the contribution made at the same time from savings in the wife's name contributed by her parents. It is therefore difficult to assess in any relative sense the significance of the payment to which the husband made an indirect contribution.
Apart from the financial contributions on the allocation of the apartment and on the subsequent acquisition of the freehold interest in it, there is no evidence of any payments by the wife towards any upkeep or outgoings on the property. It was the parties’ matrimonial home for about two years immediately before the parties migrated to Australia. There is no evidence that the apartment either benefitted or prejudiced the parties financially after they came to Australia.
While the husband bears the onus of proof of matters going to establish a contribution based entitlement in this property, the reality is that the wife and her supporting witness, her father, were the ones in possession of the relevant detailed information as to the costs incurred at the time of its initial allocation. Its allocation was a necessary pre-requisite to the right to acquire the freehold interest that the wife exercised, and is thus a relevant contribution to the acquisition of the wife's current interest in it. The wife and her father did not give detailed evidence of the cost of taking up the initial allocation, and the unrepresented husband did not really cross-examine the wife about these matters. Her father was not effectively made available for cross-examination. I am not critical of the wife for not giving more detailed evidence of the costs incurred in taking up the initial allocation of the apartment. It occurred many years ago, memories understandably fade, and records of transactions may be lost or discarded over time.
Doing the best I can on this vague evidence, I nonetheless am satisfied that the husband made an indirect financial contribution to the acquisition of the wife's current interest in her apartment in Poland. The evidence does not enable me to assess what that contribution was compared to the wife's contribution. In those circumstances, the evidence does not enable me to determine any particular contribution based entitlement of the husband in that property. I therefore consider this is a matter to be taken into account at the third step, under s.75(2)(o).
The assessment of non-contribution considerations
The parties are of similar age. There is no evidence either suffers any health problem affecting either working ability now or in the future, or future financial need.
The wife continues in full time employment, earning $1887 per week. She has no assets or liabilities other than those dealt with previously. She is able to borrow up to $300,000. She has no obligation to support any other person.
The husband remains unemployed with no income, no social security benefits, and no assets or liabilities other than dealt with previously. He was not cross-examined on his financial statement as to how he met his personal living expenses. I am satisfied the husband could obtain full time employment on a salary equivalent to the wife's, in the absence of any evidence from the husband to the contrary. He has no obligation to support any other person.
Based on the parties’ contribution based entitlements, the husband is entitled to $193,338 from the Australian non-superannuation pool, and the wife is entitled to $322,230, and the husband is entitled to $119,997 and the wife $222,851 from the superannuation pool, being $43,653 more and less respectively than their current interests. In addition, the wife has the apartment in Poland, to which the husband has made an indeterminate probably minor contribution.
Despite the greater superannuation interests of the wife, I am not satisfied any adjustment should be made to those interests in the husband's favour. His apparent indolence has been a significant contributor to that difference. Nor should any adjustment be made in the husband’s favour because of the difference in the parties’ incomes, for the same reason.
However, two matters do warrant adjustment to the contribution based entitlements of the parties, and both arise under s.75(2)(o).
First, the indeterminate contribution by the husband to the wife's acquisition of the apartment in Poland warrants recognition in some form. I propose to adjust the parties’ contribution based entitlements to the Australian non-superannuation assets by 2.5% in the husband’s favour.
Second, the fact the parties’ current superannuation interests do not reflect their contribution based entitlements, by an amount of $43,653, warrants some adjustment to the parties’ contribution based entitlements to the non-superannuation property where no splitting order is sought. In determining the appropriate adjustment, it is relevant that the adjustment will be made from currently realisable assets but in relation to a superannuation interest that the wife cannot presently access and may not be able to access for more than eleven years.
In those circumstances, I propose to adjust the parties’ interests in the Australian non-superannuation pool of property by 5% in the husband's favour.
Thus, I am satisfied an adjustment in total of 7.5% should be made to the parties’ contribution based entitlements in the Australian non-superannuation pool, bring their interests to 55/45 favouring the wife.
A just and equitable order
For the wife to retain the former matrimonial home, her car and savings, her apartment in Poland and her superannuation, she will need to discharge the current mortgage and pay the husband $244,409. She has a current borrowing capacity of $300,000, sufficient for this purpose. The husband with no income would have no borrowing capacity and hence could not buy out the wife's interest in the home. The former matrimonial home will be difficult to sell because of the reluctance of real estate agents to bring prospective purchasers to inspect it. I am therefore satisfied that it would be just and equitable to give the wife first option of retaining the former matrimonial home by paying cash to the husband for his share of the assets.
If she fails to do so within a reasonable time, then the former matrimonial home will have to be sold and the proceeds divided as to 48% to the husband and the balance to the wife. I will make orders to achieve that result.
I will also order that the personalty be divided as proposed by the wife, and I will make the consent order for the transfer of the parties’ interests in the time share to their children.
I certify that the preceding one hundred and twenty (120) paragraphs are a true copy of the reasons for judgment of Halligan FM
Associate: Deanne Bush
Date: 24 November 2009
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