Dacey and Dacey and Anor
[2013] FamCA 638
•14 August 2013
FAMILY COURT OF AUSTRALIA
| DACEY & DACEY & ANOR | [2013] FamCA 638 |
| FAMILY LAW ─ JURISDICTION ─ Accrued ─ Whether the Court had accrued jurisdiction to deal with a dispute between the husband and second respondent concerning beneficial ownership of land in a foreign country ─ Where there was no evidence before the Court and no likelihood of evidence being adduced in relation to the laws of the foreign country relating to the acquisition, dealing with, or disposition of land in that country ─ Where there was no evidence before the Court of the manner in which the ownership, as between the husband and the second respondent, on the one hand, and the occupiers on the other, would be determined according to the law of the foreign country ─ Accrued jurisdiction not exercised ─ Husband’s application for a declaration in relation to ownership of land in a foreign country dismissed FAMILY LAW ─ PROPERTY SETTLEMENT ─ CONTRIBUTIONS ─ Where the wife claimed that she made a greater contribution to homemaking and parenting than did the husband in paid employment ─ Where throughout the marriage the husband generally was in paid employment leaving the traditional homemaking and parenting roles to the wife ─ Where taking into account the contributions of the husband’s family, the husband’s direct and indirect contributions as parent and homemaker, the wife’s contributions as a homemaker and parent and the husband’s contributions in the paid workforce, the Court was of the view that the contributions should be assessed as to 60 per cent in favour of the husband and 40 per cent in favour of the wife FAMILY LAW ─ PROPERTY SETTLEMENT ─ ADJUSTMENT ─ Where the wife has not been in the paid work force for nearly 20 years, and has no demonstrated work skills ─ Where the husband’s prospects of income and financial assistance from third parties are superior to those of the wife ─ Adjustment made in favour of the wife |
| Family Law Act 1975 (Cth) Jurisdiction of Courts (Foreign Land) Act 1989 (NSW) |
| British South Africa Company v Companhiade Mocambique [1893] AC 602 Habib v Commonwealth of Australia [2010] FCAFC 12 Kennon v Kennon (1997) FLC 92-757 |
| APPLICANT: | Ms Dacey |
| RESPONDENT: | Mr Dacey |
| 2ND RESPONDENT: | Mr B |
| FILE NUMBER: | SYC | 5386 | of | 2010 |
| DATE DELIVERED: | 14 August 2013 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Rees J |
| HEARING DATE: | 5 - 6 August 2013 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | In Person |
| SOLICITOR FOR THE RESPONDENT: | Mr Fowler |
| SOLICITOR FOR THE 2ND RESPONDENT: | In Person |
Orders
IT IS ORDERED
That each of the husband and the wife do all acts and things and sign all documents required to effect the sale of the property known as C Street, Suburb D (“The Property”).
(a) The listing price of the Property shall be that amount agreed upon by the parties but if there is no agreement within 30 days the parties shall list the Property for sale at a price as may be recommended by the real estate agent with whom the Property is listed for sale.
(b)The Property shall be listed with E Real Estate, Suburb F, through Mr G or such other real estate agent as may be agreed upon by the parties (“the agent”), for sale upon the following terms:
(i)In default of agreement between the parties within 30 days as to the method of sale of the Property the parties shall accept, and act upon, the recommendations of the agent.
(ii)For the purposes of any public auction of the Property, the reserve price shall be that amount agreed upon between the parties and in the absence of agreement by the date which is 14 days prior to the auction date, shall be determined by a registered real estate valuer. In default of agreement by the parties by the date which is 7 days prior to the auction date as to the valuer to be appointed for this purpose then the parties shall engage such valuer as is recommended by the agent on the request of either party.
(iii)The parties shall each pay and be responsible for payment of one half of any marketing, advertising and/or auction expenses payable to the agent.
(iv)Both parties shall attend any auction of the property and if the Property is not sold for a price not less than the reserve price then the parties shall use their best endeavours to reach agreement on a sale price for the property with the underbidder.
(c)If an offer is made to purchase the Property on reasonable terms and the parties are in default of agreement as to whether or not the amount offered to purchase the Property should be accepted then the parties shall engage a registered real estate valuer to determine the fair market value of the Property and if the offer made is not less than the fair market value of the Property the parties shall accept the offer. In default of agreement by the parties as to the valuer to be appointed for this purpose then the parties shall engage such valuer as is recommended by the agent on the request of either party.
That, until settlement of the sale, the wife be responsible to pay council and water rates and building insurance.
That the husband and wife do all acts and things and sign all documents as may be required to cause the proceeds of sale of the Property to be applied as follows:
a.Firstly, to pay all costs, commissions and expenses of the sale.
b.To pay to the wife 45 per cent of the balance remaining.
c.To pay to the wife the sum of $36,991.
d.To pay the balance then remaining to the husband.
That the wife use her best endeavours to locate and make available for collection by the husband his rosewood icon and any hand or power tools in her possession.
That the wife be solely entitled to the household goods and jewellery in her possession.
That the wife execute all documents tendered to her by the husband to cause her entitlements to dividends declared in her favour by H Pty Ltd and I Pty Ltd, and her shares in H Pty Ltd, to be transferred to the husband and that the husband indemnify the wife and hold her safe in respect of any and all liability arising out of her being a shareholder of H Pty Ltd.
That the application of the husband seeking orders against the Second Respondent be dismissed.
That the Response of the Second Respondent be dismissed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Dacey & Dacey and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 5386 of 2010
| Ms Dacey |
Applicant
And
| Mr Dacey |
Respondent
And
| Mr B |
2nd Respondent
REASONS FOR JUDGMENT
Before the Court are proceedings for property settlement arising out of the marriage of the applicant Ms Dacey (“the wife”) and the respondent Mr Dacey (“the husband”). The wife who is aged 52 and the husband who is aged 50 started living together in either September 1989, according to the wife, or in 1990, according to the husband. Nothing turns upon that date. At the commencement of their co-habitation they were both working. They married in 1991 and there were three children of their marriage, J who was born in 1994 and sadly died of cancer in 2004, K, who was born in 1997 and is therefore now 15 years old, and L who was born in 1999 and is now 14 years old.
In 1992 the parties purchased a property at M Street, Suburb F (“Suburb F”) for $210,000. The husband asserts that his parents gave the parties $60,000 towards the purchase price and lent them “interest free”, $50,000. The wife asserts that the husband’s parents gave them between $40,000 and $60,000 and denies any knowledge of the interest free loan. That is a matter to be determined. It is however, common ground that the balance of the purchase price was provided from their joint savings.
In 1998 the parties sold the property at Suburb F for $405,000 and purchased a property at C Street, Suburb D (“Suburb D”) for $460,000. The money required to complete the purchase was provided from the parties’ savings which included monies which had been advanced to the parties by way of dividend by the husband’s family of which more will be said later. The Suburb D property was substantially renovated. The husband reduced his working hours in order to participate in the renovations. The wife also assisted with the renovations but was primarily engaged in caring for the parties three small children.
In April 2010 there was a period of separation under the same roof and on 25 July 2010 the husband moved out of the former matrimonial home taking L with him and commenced to live in rented accommodation. K remained living with his mother until April 2013 when he too went to live with his father. Since that time neither child has spent substantial periods of time with the mother and it would appear that at the present time the mother and the children are completely estranged.
In the proceedings before me, the wife was unrepresented, as was the second respondent, Mr B. The husband was represented by his solicitor.
the property in Country N
In June 1988, the husband together with Mr B, purchased land in Country N. They each put in approximately $1,000 Australian dollars. In order to comply with local requirements the property was registered in the name of a Country N national.
The husband and Mr B still own that property although there is a dispute between them about the beneficial ownership. In the proceedings before me Mr B asserted that he was entitled to 90 per cent of the beneficial ownership of the property in Country N. The husband agreed with that assertion and both Mr B and the husband sought declarations consequent upon that agreement.
Because the husband asserted that he was not beneficially entitled to half of the value of the property in Country N, Mr B was joined as the second respondent. By response filed on 1 February 2013, Mr B sought a declaration that the Family Court of Australia did not have accrued jurisdiction to hear and determine the matter in relation to the land in Country N. In the alternative, Mr B sought a declaration that he be entitled to 90 per cent of the property; a declaration that the property was valued at $174,000; an order that the husband and the second respondent be, presumably equally, liable for the cost of reclaiming the land from its current illegal occupants who hold the land in adverse possession and an order that the husband transfer his share of the land to the second respondent.
It was the husband’s unchallenged evidence that he and Mr B by virtue of a deed dated 21 June 1988 owned the Country N land in equal shares.
It was the husband’s evidence that in 1989, on the subject land, he was physically assaulted by a group of people. The wife was present during the assault. Her version of events does not accord with that of the husband but nothing turns upon their differences. It was the husband’s evidence that after the assault he had a conversation with the second respondent and it was agreed between them that the second respondent would proceed to develop the land, the husband would make no further financial contribution, and the second respondent would then be beneficially entitled to 90 per cent of the property.
It was the husband’s unchallenged evidence that after that discussion he did not spend any further money on the property and that the second respondent did work and expended money on the Country N land.
A dispute arose with the Country N national registered proprietor which was resolved in 2004 when the property was subdivided into two lots. The Country N national took one of the subdivided lots and the husband and the second respondent took the other.
The property in Country N is held in adverse possession.
Attempts to value the property have been unsuccessful.
O Partners were instructed to value the property for the purpose of the proceedings, as single expert. The single expert reported to the parties but they were unable to conduct a survey and consequently unable to conduct a valuation due to the objection of the present occupiers of the land.
In order to conduct the survey, and therefore the valuation, the single expert advised that it was necessary for one of the co-owners to come to Country N and take legal action against the illegal occupiers. Once that action had been successfully completed, it would be necessary for one of the owners to make arrangements with the local authority to complete registration for tax purposes and pay any tax currently outstanding. In order for the land to be sold and the proceeds transmitted to Australia, permission would need to be obtained from the controller of exchange in Country N. There was no evidence about whether that permission would be likely to be forthcoming.
The single expert was unable to express an opinion about the amount of time which would elapse from the date of the owners’ giving instructions to commence proceedings, and the date of removal of the illegal occupiers. The time frame would depend on how strong the defence was and whether the illegal occupier had built a permanent structure on the land in which case “The case may drag on for some time.” In order for the trial to proceed, the owners would need to be available in Country N to give evidence. The single expert has given an estimate of the legal costs likely to be incurred in the proceedings.
In relation to the prospects of the illegal occupiers, or other occupiers, returning to occupy the land after an order had been executed, the single expert advised that it was possible that some other party may occupy the land again in which case fresh proceedings would have to be commenced. The single expert advised that the boundaries of the land should be protected by way of a boundary wall or security fence and that a security company or similar person, should be engaged to protect the land until such time as the land was sold. There was no estimate before the Court of the likely costs of either security fencing or retaining security services.
On the evidence available in relation to the land in Country N, the Court could not be satisfied that its value, whatever that may be, will ever be realised or that either the husband or the second respondent will ever be in a position to sell the land and retrieve any monies from their investment. In those circumstances, the dispute between them, or indeed the agreement between them, about the manner in which their holdings should be treated, becomes irrelevant and does not require to be determined in order to determine the claims between the wife and the husband.
accrued jurisdiction
At the commencement of the proceedings the issue of whether or not the Court had accrued jurisdiction to deal with a dispute about land in Country N was raised with the parties. No submissions were made by either the second respondent or the wife. After briefly hearing submissions from the solicitor for the husband, I indicated that I did not intend to exercise accrued jurisdiction and that reasons would be included in these reasons for judgment.
Because of my findings in relation to the value of the property it is not necessary, as between the husband and the wife, to consider the question of accrued jurisdiction, however, the application of the second respondent remains to be determined.
It is settled law that the Family Court of Australia can accrue jurisdiction where there is a single justiciable controversy between the parties to the proceedings. The accrual of jurisdiction however assumes that another Court, in this case, presumably the Supreme Court of New South Wales, would have had the jurisdiction to determine the controversy.
There is a long standing rule of private international law, derived from the decision of the House of Lords in British South Africa Company v Companhiade Mocambique [1893] AC 602, that the court of a sovereign country has no jurisdiction to entertain an action for the determination of title to, or the right to possession of, any immoveable property situated in a foreign country.
The position in the State of New South Wales is complicated by the passage of the Jurisdiction of Courts (Foreign Land) Act 1989 (NSW). Section 3 of that Act bears the heading “Jurisdiction with respect to foreign land (the Mozambique (sic) rule abolished). Section 3 provides:
The jurisdiction of any Court is not excluded or limited merely because the proceedings relate to or may otherwise concern land or immovable property situated outside New South Wales.
As Perram J in Habib v Commonwealth of Australia [2010] FCAFC 12 noted:
41....It might be noted for completeness that the Mocambique rule has been abolished in New South Wales by s.3 of the Jurisdiction of Courts (Foreign Land) Act 1989…. The role of those provisions in federal jurisdiction in light of section 79 of the Judiciary Act 1903 is, as yet, unclear.
Section 4 of the Jurisdiction of Courts (Foreign Land) Act provides:
A Court is not required to exercise jurisdiction under this Act if the Court considers that it is not the appropriate Court to hear the proceedings.
I am of the view that the Family Court of Australia is not the appropriate Court to hear the proceedings. There is no evidence before the Court and no likelihood of evidence being adduced in relation to the laws of Country N relating to the acquisition, dealing with, or disposition of land in that country. It cannot be assumed that equitable rights which might arise in Australia would also arise in Country N. Neither can it be assumed that the law of Country N would permit rights to arise in relation to real estate by virtue of oral agreements between parties.
In any event it would appear that the husband and the second respondent are not the only claimants to an interest in the subject land, there being persons in Country N in adverse possession, presumably claiming to have rights, however identified. There is no evidence before the Court of the manner in which the ownership, as between the husband and the second respondent, on the one hand, and the occupiers on the other, would be determined according to the law of Country N. Once the claims of the occupiers are taken into account, it is difficult to see how the dispute could be regarded as a “single justiciable issue” so as to meet the test for accruing jurisdiction.
In all of those circumstances, if I found there was accrued jurisdiction, then jurisdiction could only have accrued by virtue of the provisions of section 3 of the Jurisdiction of Courts (Foreign Land) Act. For the reasons set out above, I would have declined to exercise jurisdiction pursuant to the provisions of section 4. In the circumstances of this application, whether I had accrued jurisdiction is not a matter which I am required to determine.
Accordingly, the application of the husband for a declaration in relation to the ownership of the land in Country N, will be dismissed.
the issues
A) The source of the monies used for the purchase of the Suburb F Property.
The husband asserts that his family gave the parties $60,000, and lent the parties $50,000 interest free. The wife recalled a gift of $40,000 to $60,000 and, as to the loan, while she does not deny that assertion, says she has no knowledge of such a loan.
Both the husband and his father gave evidence that the parents had given the parties $60,000. Neither was cross-examined about that issue. I accept that evidence.
The husband gave evidence that his parents had lent the parties $50,000 interest free for the purchase of Suburb F and that sum had been paid back over a period of time. He was not cross-examined by the wife, who appeared unrepresented, on that issue.
The husband’s father, Mr P Dacey, swore an affidavit and was cross-examined. He deposed to an interest free loan of between $40,000 and $60,000 which had been repaid. His evidence was not challenged.
The purchase price of the property was $210,000. After payment of stamp duty and legal fees, the cost of acquisition was about $217,000. After the gift from the husband’s parents, the balance to be found by the parties was $157,000. They had returned to Australia after an extended holiday of more than three months, mostly spent in Country N, in September 1989. They had no substantial savings upon their return and they began to save to purchase a home. The whole of the wife’s earnings were saved and they lived on the husband’s earnings.
They travelled again to Country N in 1990 for about seven weeks. In early 1992 they moved from a shared house to a house which they leased together and therefore paid the whole of the rent. Neither party was in well paid employment. It is unlikely that they could have saved $157,000 between September 1989 and 1992 and I accept that the most likely explanation for their being able to purchase the Suburb F property without a mortgage was that the husband’s family lent them $50,000. There is no evidence about the applicable mortgage interest rates at the time or the amount of interest which was saved.
B) The manner in which the Country N property should be treated.
On the husband’s evidence he is the legal owner of 50 per cent of the property, notwithstanding that it is currently in adverse possession. The husband’s position is that there is no merit in pursuing an action in Country N and he seeks an order that he transfer his interest in the Country N property to the second respondent or in the alternative that he transfer his interest to the wife at a deemed nil value.
The wife’s position is that the husband’s half interest in the Country N property should be treated as an asset in his name and brought into account in the balance sheet at full value. She does not want to be a part owner of the land.
In circumstances, as have been explored earlier in these reasons, where the value of the property cannot be determined; its sale cannot be readily achieved; the value, whatever it may ultimately be, is not likely to be realised in the foreseeable future and Mr B claims to be beneficially entitled to 90 per cent of the value, I do not propose to bring the husband’s interest in the land into account.
C) Shareholding in H Pty Ltd (“H”)
H is the corporate vehicle through which the husband’s parents, brother and sister operate a business. The husband’s parents and brother are Directors. The husband has never worked in the business.
Both the husband and the wife were allocated shares in H. It was common ground that the I and K Class shares held by the husband and the wife carried no rights and that dividends could be declared to those shareholders at the discretion of the Directors. A single expert, Mr Q, was appointed to value the shares. Mr Q valued the husband’s 50 D Class shares at $100 and ascribed no value to the I and K Class shares held, respectively, by the husband and the wife, on the basis that no further dividends would be paid.
In the past H has paid dividends to the husband or the wife by virtue of that share holding. It was tax effective for the dividend to be paid to the wife when she was not in paid employment. The significance of those dividends will be discussed when considering contributions. There remains however a credit loan account in the name of the wife in the sum of $90,000 in H which results from dividends declared in her favour in 2008 and 2009 totalling $90,000 which were not in fact paid to her.
The husband’s brother is responsible for the management of H. He gave evidence. He did not suggest that there was any impediment to the amount of the loan account’s being paid if a call were made.
There is no dispute that the credit loan account in H is an asset. The wife seeks that it be transferred to the husband together with any shares which she owns in H. The husband seeks that the credit loan account be divided in accordance with the proportions that other property will be divided.
In circumstances where it is the husband’s family who control H, I am of the view that he should take that asset and be the person who deals with his family to organise its payment, if he chooses to do so.
For the same reason, the shares held by the wife in H should be assigned to the husband.
D) Prospective inheritances
Both parties asserted that the other was likely to inherit upon the death of their respective parents. The wife’s mother is in her 80’s and owns her own home. She has no other assets. There is no evidence of the value of the home. The wife has a brother. There is no evidence of the testamentary intentions of the wife’s mother.
The husband’s parents are also in their 80’s. Other than that they own their own home and have shares in the companies, including H, which are the vehicle for the business, there is no evidence of their assets or the value of those assets.
The husband’s father was cross-examined about his intentions. He gave evidence that in 2010, after the parties separated, they both changed their wills to exclude the husband. The parties separated in July 2010. The wills were tendered. They were executed on 1 October 2010.
Tendered in the wife’s case were two documents that, she submitted, suggested that the existing wills were drawn to protect the husband from any claim that he might have a prospective inheritance. The first is a tax invoice prepared by the solicitors for H for their professional costs in responding to subpoena issued by the wife directed to H. The invoice is headed “(Surname) – Advice as to Asset Protection and Consequences of Family Action for (the husband)”. None of the 14 items then set out relates to anything other than the production of documents pursuant to the subpoena. The second document is a letter from the husband’s brother to the husband’s solicitor. The second paragraph reads:
Please find enclosed and attached the response to your questions received by email (date). The response is completed after the advice from (the Solicitors for [H]), the solicitors for (the husband’s parents) in relation to their estate (including their Wills & the [P Dacey] Family Settlement Trust and its corporate trustee [I Pty Ltd].)
The husband’s father gave evidence that the wills were changed to exclude the husband because he and the husband’s mother disapproved of the separation and its effect on their grandsons. The terms of the second document are not inconsistent with the evidence of the husband’s father. I accept that his evidence represents his current intentions.
Whether the husband’s parents will soften their attitude towards the husband remains to be seen. The husband’s father has been willing to advance him quite large sums of money since the separation. The husband, if he is not provided for, may challenge the provisions of the wills.
I do not consider the prospect or either party’s inheriting from a parent to be sufficiently proximate, certain, or capable of even an estimate of ultimate value, that it would be appropriate to take either prospect into account.
balance sheet
At the commencement of the hearing, a balance sheet was tendered. The disputes are not extensive and will be dealt with as they are numbered in the document.
| Owned | Description | Wife’s value | Husband’s value | |
| ASSETS | ||||
| 1. | H&W | C Street, Suburb D | E 1,200,000 | 1,200,000 |
| 2. | H | Property 1, Country N | 87,037 | 0 |
| 3. | H | NAB Account … | 3,042 | |
| 4. | H | NAB Account … | 1,042 | |
| 5. | W | AMP (Quay) Credit Union Account … | 100 | |
| 6. | H | H Pty. Ltd. – 50D Class shares | 100 | 100 |
| 7. | H | H Pty. Ltd. – 25 I class Redeemable Preference Shares | 50 | |
| 8. | W | H Pty. Ltd. – 10K Class Redeemable Preference Shares | 20 | |
| 9. | H | Mr Dacey (tools) | 1,000 | E 500 |
| 10. | H | Sporting equipment | E600 | E 50 |
| 11. | H | Two (2) Paintings | 5,000 | E 2,000 |
| 12. | W | Jewellery | 6060 | 20,370 |
| 13. | H&W | Household Contents | 5,000 | 5,000 |
| 14. | H | Sapphires | E3,000 | 0 |
| 15. | W | Loan account in H Pty. Ltd and I Pty. Ltd | 90,000 | |
| Total | $1,307,897 | $1,322,174 |
| ADDBACKS | ||||
| 16. | H | Interim distribution from BOQ | 71,732.70 | 71,732.70 |
| 17. | W | Interim distribution from BOQ | 71,732.70 | 71,732.70 |
| Total | $143,465.40 | $143,465.40 |
| LIABILITIES | ||||
| 18. | W | G E Mastercard | 550 | |
| 19. | H | Mr. P Dacey – personal loan | 58,796 | |
| 20. | H | Mr. R – personal loan | 13,000 | |
| 21. | H | Mr S – personal loan | 13,148 | |
| Total | $550 | $84,944 |
| SUPERANNUATION | |||||
| Member | Name of Fund | Type of Interest | Wife’s value | Husband’s value | |
| 22. | W | Spectrum | E1,819 | ||
| 23. | H | Mert | E200 | 200 | |
| 24. | H | Advance | E413 | 413 | |
| Total | $ 2432 | $613 |
Item 2 – land in Country N
For the reasons earlier set out, this item will be removed.
Items 3, 4 and 5 – savings
These funds are sourced to the partial property settlement received by each of the parties and should be excluded as a double counting. That position was conceded by the husband.
Items 9 and 10 – tools, sporting equipment
There is no evidence of the value of the tools and the husband’s admission against interest will be accepted ($550).
Item 11 – Paintings
Until the husband swore his updated Financial Statement on 29 July 2013, the value of the paintings was agreed to be $5,000. The wife only understood that he resiled from that agreement when the joint balance sheet was prepared. She was given no opportunity to have the paintings valued. The husband conceded that he should, in those circumstances, be bound by his earlier agreement ($5,000).
Item 12 – jewellery
The husband conceded that the appropriate value was the Fair Market Value rather than the replacement value for which he had previously contended ($6,060).
Items 16 and 17 – the interim distributions
At separation, the parties had accumulated funds in the Bank of Queensland (“BOQ”), being savings and accumulated dividends paid by H. The husband removed $16,215 from the account when he moved away from the matrimonial home to pay a rental bond and six months rent in advance. In September 2010 the parties agreed to a distribution of funds from their BOQ funds of $80,000 being $40,000 for each of them to be paid as to $30,000 to each of their solicitors and $10,000 to each of them for “living expenses”. Further distributions were made totalling approximately $50,000, paid equally to their respective solicitors. According to the joint balance sheet, the total distribution was $143,465.40 or to each party, $71,732.70.
Each party has a small sum remaining, the balance having been paid to their solicitors. I regard the distributions to be a partial or interim property settlement. Each has used the funds mainly to pay their legal fees. It is not appropriate to add that amount back, but it is a factor to be dealt with pursuant to s 75(2).
Items 19 to 21 – husband’s post separation borrowings
After separation, the husband secured rental accommodation with L using $16,215 from joint funds to pay his bond and six months rent in advance. He sold his vehicle for $3,000. The husband had access to $19,215 from jointly owned assets, disregarding what he and the wife received from interim distributions. In addition, the wife’s car was owned by the business and was taken from her.
There is no evidence about the amount of rent which was necessary for the husband to pay to house himself and L. He chose to rent a home which provided room for Mr R. His evidence at trial was that he is moving to cheaper premises.
In the financial year ended 30 June 2011, being the first full year of separation, his taxable income was $4,673, he being unfit for full time employment because of his health.
The husband deposes to having borrowed $52,711 from his father and $12,148 from Mr S. Each of those persons has sworn an affidavit deposing to the advances and their expectation of repayment from the proceeds of the husband’s property settlement. Neither was challenged. I accept that those sums will be repaid.
The husband also deposes to having borrowed $13,000 from Mr R. Mr R did not swear an affidavit. Neither the husband nor Mr R gave evidence of an expected repayment. The wife does not accept that the money is owed. Mr R has, since separation, occupied a room in the husband’s premises whenever he is in Sydney which is approximately one week in six or seven. He has for some time allowed the husband the use of his motor vehicle. He pays no rent. I am not satisfied that the asserted debt to Mr R will be repaid or should be taken into account.
The sums advanced by the husband’s father have been used primarily to pay rent and also for discretionary items such as braces for L, an operation for the husband and motor vehicle expenses.
The sums advanced by Mr S were also used primarily to pay rent.
The husband has continued, as he did during co-habitation, to pay private health insurance for himself and the children, although, after separation, not for the wife.
The wife has remained in the former matrimonial home, until April 2013 with K. She has been, since separation, in receipt of a Newstart Allowance. It was her unchallenged evidence that she has paid rates, insurance and utilities from her Newstart Allowance. When K moved to live with his father, her Newstart Allowance dropped to $248 per week or the equivalent of $12,896 per annum. Her unchallenged evidence was that she is unable to afford to use electricity and has resorted to candles and that she uses her electric blanket to keep warm rather than running the air conditioning. She has not borrowed to improve her lifestyle.
The husband gave evidence of no such privation. He has paid for activities for L and for holidays for himself and the boys, albeit driving and camping holidays where he stayed with friends. He is able to take the boys to the farm owned by his family to enjoy outdoor activities such as riding and motor sports.
It is appropriate for the husband to make decisions about the lifestyle he wishes to enjoy and to borrow to support that lifestyle. However, taking those borrowings into account as liabilities of both parties, leaves the wife with a responsibility for a share of his borrowings as to which she was never consulted. That is not appropriate and the liabilities will be disregarded for the purpose of the balance sheet. This issue can be re-considered in the context of s 75(2) adjustments.
Similarly, the wife’s Mastercard debt will be disregarded.
Item 37 – sapphires
The husband denies that these exist. There is no evidence to support their existence. This item will be removed from the balance sheet.
I therefore find the assets and liabilities of the parties, for the purpose of division to be:
| Owned | Description | Value | |
| 1 | H&W | C Street, Suburb D 2229 | 1,200,000 |
| 2 | H | Property 1, Country N | 0 |
| 3 | H | H Pty. Ltd. – 50D Class shares | 100 |
| 4 | H | H Pty. Ltd. – 25 I class Redeemable Preference Shares | 50 |
| 5 | H | H Pty. Ltd. – 10K Class Redeemable Preference Shares | 20 |
| 6 | H | Mr Dacey (tools) | E 500 |
| 7 | H | Sporting equipment | E 50 |
| 8 | H | Two (2) Paintings | 5,000 |
| 9 | W | Jewellery | 6,060 |
| 10 | W | Household Contents | 5,000 |
| 11 | H | Loan account in H Pty. Limited and I Pty. Ltd | 90,000 |
| Total | $1,306,780 | ||
| Member | Name of Fund | Type of Interest | Value | |
| 12 | W | Spectrum | E1,819 | |
| 13 | H | Mert | E200 | |
| 14 | H | Advance | E413 | |
No order is sought by either party in relation to superannuation. The amounts are insignificant.
section 79(2)
The parties have separated and their significant asset remains in their joint ownership. They ask the Court to divide their assets and it is just and equitable that they each receive a portion of the assets they have jointly acquired.
contributions
The husband owned the two Pro Hart paintings prior to co-habitation.
The parties in acquiring the Suburb F property were assisted by a gift of $60,000 from the husband’s family. In addition they were assisted by an interest free loan of $50,000 which was subsequently repaid. There is no evidence about the interest which was saved by the parties but once the loan to the husband’s family had been repaid the parties owned the Suburb F property free of mortgage.
Between 1995 and 2007, the parties received distributions from H. They had no entitlement to those distributions which were made solely at the discretion of the directors of H. Until 2002 the dividends were made payable to the husband and between financial years 2003 and 2007 the dividends were paid to the wife. In financial years 2008 and 2009 the dividends were declared but not paid and were included in the wife’s taxable income. The total which was received by the parties from H was $460,000 (excluding the $90,000 still unpaid). In addition to receiving the dividends, in the financial years 2003 to 2009, when the wife was not in paid employment, she was able, because the dividends were franked, to claim a tax refund and in the financial years 2003 to 2009 inclusive the wife received tax refunds totalling approximately $56,000.
In addition to the dividends actually paid, in 2008 and 2009 dividends were declared in each year of $45,000 in favour of the wife although they were not paid to her. The dividends are held, as has been previously discussed, in a loan account in H Pty Ltd thus the total amounts which have been paid to the parties, or will be paid once the sum of $90,000 is paid, are $606,000 ($460,000 plus $90,000 plus the tax refund of $56,000). This is a contribution from the husband’s family and to be treated as a contribution on his behalf.
In an asset pool of some $1.3 million this is a significant contribution.
The monies which were received from the husband’s family were used in a very significant way to pay for renovations to Suburb F, to pay the balance of the monies required when the parties purchased the C Street property, to pay for the renovations of C Street and to subsidise the parties’ income at times when the husband was not working fulltime either because he was at home during the time that J was sick or because he was otherwise unemployed. Thus the contribution of the dividends was significant in allowing the parties to live in a home on which there was no mortgage payment.
The wife claims that she made a greater contribution to homemaking and parenting than did the husband in paid employment.
It was the wife’s case that the husband’s behaviour towards her over the course of the marriage which, she said, was verbally abusive and demeaning should be taken into account when assessing contributions. The husband denied the wife’s assertions. It was the husband’s evidence that it was the wife who was verbally abusive towards both him and the children.
The wife in support of her assertions relied upon an incident report produced from police files. The report relates to an incident on 23 July 2010, only days before the parties separated, when the wife attended at the police station and complained of a verbal argument with the husband. The wife told the officer who recorded her statement that the parties were in the course of separating and that the husband “Tends to degrade her with different comments belittling her.” The police record an argument between the husband and the wife on that day.
The second document upon which the wife relies is a consultation note and discharge referral from T Hospital recording that the wife was brought to the hospital by police following a phone call from the husband asserting that she was threatening to kill herself. The consultation notes refer to “Situational conflict in context of ongoing divorce.”
I have no doubt that at the time leading up to the parties’ separation and during the time that they lived together under the one roof there was conflict between them. However I cannot, on the evidence before me, and in the face of the husband’s denials, find that the conduct which occurred during the course of the marriage had a discernable effect upon the contributions of the wife, noting, as the Full Court said in Kennon v Kennon (1997) FLC 92-757, that conduct related to the breakdown of the marriage would not have had a sufficient duration to have an impact relevant to contribution.
During the marriage there is no doubt the wife was a dedicated home maker and parent. When L was born in 1999, the parties had three children under five years of age. When J first became ill in about November 2002, L was 3 years old and the wife had the primary care of the two younger children and the primary care of J who was ill for 17 months until he died in May 2004. I accept the wife’s evidence that while J was sick the burden upon her was very difficult.
Throughout the marriage the husband generally was in paid employment leaving the traditional homemaking and parenting roles to the wife. I accept that he assisted the wife from time to time but that the burden was mainly hers.
The husband took time out from paid employment to renovate both of the homes the parties occupied and did work himself, although the wife’s brother who is a tradesman also worked on the homes. The wife gave evidence that her brother renovated the bathrooms at Suburb D.
Whilst J was sick, the husband on occasions reduced his working time so that he could spend more time with J. Nevertheless the wife remained his primary carer.
In addition I take into account that during the period from the parties’ physical separation on 25 July 2010 until April of 2013 L lived with the husband and K primarily lived with the wife. The wife gave unchallenged evidence about K’s behaviour during that period. She gave evidence of K’s swearing at her, spitting in her face, on the ceiling, on the floor and on appliances, using the wife’s bed linen to wipe up spit, threatening her, damaging possessions and being extremely aggressive. On one occasion, after an incident, K was taken by police to T Hospital and then released into the wife’s care. In August 2011 the police instigated an Apprehended Domestic Violence Order (“ADVO”) taken out on behalf of the wife naming K as the defendant. A Juvenile Justice Parole Officer was appointed who attended from time to time to check on K. In August of 2011 K was charged with common assault on the mother and with a breach of the ADVO. The mother attended court with K and withdrew the ADVO.
There is no doubt that the care of K during the period from separation to April 2013 was extremely onerous.
In contrast the husband gave evidence that since K has come to live with him, K’s behaviour has improved, he works everyday and in the husband’s words “Has been a terrific kid”.
I give greater weight to the wife’s care for K, because of his extreme behaviour towards her, than to the husband’s care for L.
Since April 2013 the husband has had the care of both of the boys. The wife has been assessed to pay child support of $32 per month for L and K is working full time and earns $414 per week. The children do not spend time with their mother so the father has the full time responsibility for them.
Taking into account the contributions of the husband’s family, the husband’s direct and indirect contributions as parent and homemaker, the wife’s contributions as a homemaker and parent and the husband’s contributions in the paid workforce, I am of the view that the contributions should be assessed as to 60 per cent in favour of the husband and 40 per cent in favour of the wife.
section 75(2) factors
The husband contends that there should be an adjustment in his favour of 5 per cent based upon his assertion that the wife has a capacity for paid employment.
The wife has not worked since before the birth of J in 1994. Prior to J’s birth, she was employed in clerical positions and as a shop assistant. In 2010, the wife swore an affidavit wherein she deposed to recognising a need for her to retrain if she were to re-enter the workforce. She has not, however, undertaken any retraining.
The husband relies upon the fact that the wife goes to the gym to exercise on five days each week to support his assertion that she can work. The wife gave evidence that she goes to the gym because she finds that exercise improves her mood.
The wife is currently in receipt of a Newstart Allowance and she gave evidence that she had been categorised as “Newstart Stream 4” which she said means that she was not suitable for retraining. That evidence was not challenged. The wife goes to the job centre and attends counselling but, she said, she is not required, as condition of her receiving the allowance, to apply for work. She has applied for a Disability Support Pension.
The wife has been prescribed anti-depressant medications since about 1992 and she gave evidence of suffering from anxiety and panic attacks in earlier years. She attended upon a number of psychologists and counsellors during the marriage. She has left J’s bedroom as it was when he died and gave evidence that she finds it hard to deal with J’s death.
The wife was granted leave to file an affidavit by her treating doctor prior to the hearing but did not do so. On the first day of the trial she sought to tender a medical report but, because she was unable to make the doctor available for cross-examination, the tender was rejected.
In August 2010, the husband made enquiries of the police and the local hospital about having the wife detained involuntarily. She was, in fact, detained by police to T hospital after the husband telephoned police alleging that the wife was threatening to kill herself.
In circumstances where the wife has not been in the paid work force for nearly 20 years, and has no demonstrated work skills, I cannot find that she is likely to find remunerative employment in the foreseeable future.
The husband has been unable to work full time since about December 2009. He is a floor layer by trade and has arthritis in his knees. He has now had surgery on both of his knees, the last in July 2013.
He gave evidence that he last worked in April 2013 when he was able to work for about five days per month but that he hopes to be able to return to work, at least part time, by November 2013. The husband’s tax returns indicate that in the (financial) year 2010 his taxable income was $34,615 (I infer relating to income for six months as he was not able to work after December 2009). In 2011 his taxable income was $4,673. In 2012, his taxable income was $4,932.
Between July 2012 and July 2013, the husband has been employed as a contractor and has issued invoices for work totalling $14,623 for “Various building and flooring work”. He has exceeded the expectation of his treating specialist that he cannot work as a floor layer.
It is likely that, after November 2013, the husband will be able to work as a contractor and earn some income. In the past he has been a partner in a firm which specialised in constructing steel framed buildings and in a firm which provided contractors for “home handyman” services. His skills are not limited to floor laying. He is more likely than the wife to earn income after November 2013. I cannot speculate on the level of income he could achieve.
The husband will have the ongoing responsibility to care for and house the children. They are unlikely to spend any significant time with their mother. L is 14. K is 16 and in full time employment.
The husband will have to repay the sums he has borrowed from his father and Mr S. However, the husband has been able to borrow significant amounts to support his lifestyle, he has had the use of two motor vehicles, neither of which is owned by him and continues to have the use of a vehicle owned by a third party. He is able to take the children to the family farm at weekends.
The husband seeks to “add back” to the asset pool the amounts of $71,732.70 which they each received and spent, primarily, on legal fees. He argues that, if he is to receive a larger percentage than the wife, she should not have received an equal amount by way of interim distribution, or that she should account for the excess. The husband argues, I infer, that the wife has received about $14,000 more than she should have received on a contribution basis. In my view, the appropriate manner in which to recognise that imbalance is in the s 75(2) adjustment, which would otherwise be greater.
Each party will retain very modest superannuation entitlements. I do not consider the disparity between their entitlements to warrant further adjustment.
Overall, the husband’s prospects of income and financial assistance from third parties are superior to those of the wife.
There should be an adjustment in favour of the wife of 5 per cent to recognise that imbalance.
conclusion
The former matrimonial will be sold and the assets of the parties divided as to 55 per cent to the husband and 45 per cent to the wife.
The husband retains personal property worth $95,720 and the wife retains personal property worth $11,060. (Total $106,780). In order to achieve a distribution of 45 per cent to the wife, she must receive a total of $48,051 requiring a payment to her by the husband of $36,991 from his share of the proceeds of sale.
I certify that the preceding one hundred and eighteen (118) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 14 August 2013.
Associate:
Date: 14.08.2013