DAVIDA & DAVIDA
[2011] FamCAFC 38
•2 March 2011
FAMILY COURT OF AUSTRALIA
| DAVIDA & DAVIDA | [2011] FamCAFC 38 |
| FAMILY LAW - APPEAL - PROPERTY SETTLEMENT – where the Federal Magistrate erred in his calculation of the parties’ assets and liabilities – where the Federal Magistrate erred in his assessment of the husband’s initial non-financial contributions – appealable error established – re-determination. |
| Family Law Act 1975 (Cth) |
| APPELLANT: | Mr Davida |
| RESPONDENT: | Mrs Davida |
| FILE NUMBER: | BRC | 2360 | of | 2009 |
| APPEAL NUMBER: | NA | 32 | of | 2010 |
| DATE DELIVERED: | 2 March 2011 |
| PLACE DELIVERED: | Canberra |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Finn, O'Ryan & Ainslie-Wallace JJ |
| HEARING DATE: | 1 October 2010 |
| DATE OF LAST SUBMISSIONS: | 7 October 2010 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 12 February 2010 |
| LOWER COURT MNC: | [2010] FMCAfam 102 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr T. Matthews |
| SOLICITOR FOR THE APPELLANT: | Berek & Associates |
| COUNSEL FOR THE RESPONDENT: | Ms J.D. Hogan |
| SOLICITOR FOR THE RESPONDENT: | Murdoch Lawyers |
Orders
That the appeal against the order of Federal Magistrate Coates made on 12 February 2010 be allowed.
That the order be set aside and in its place the following order be made:
(1) The husband and wife execute all documents and writings and do all acts and things necessary to effect the sale of the former matrimonial home by private treaty and in particular shall:
(a)Place the home with such real estate agent as the parties may agree to appoint and in default of an agreement such real estate agent as the C.E.O. of the Real Estate Institute of Queensland shall appoint (hereinafter called the real estate agent) for the sale at the earliest possible date;
(b)Execute all documents requested by the real estate agent for the sale of the home by private treaty;
(c)Request the real estate agent to recommend a reserve price to be placed on the home for the purpose of the sale and accept such recommended reserve price;
(d)Pay to the real estate agent any sums requested for advertising expenses in relation to the sale;
(e)Give such instructions as are necessary to a solicitor for the preparation of a contract for sale and for the contract for sale to be made available to the real estate agent;
(f)Negotiate with any potential buyers;
(g)Execute the contract for sale;
(h)Co-operate in any way with the real estate agent in relation to the sale of the home including making a key available, allowing inspection of the home at all times requested by the real estate agent and ensuring that the home is in a neat and clean condition at the time of inspection by prospective purchasers;
(i)Execute all other documents necessary to complete the sale.
(2)In the event that the former matrimonial home is not sold by private treaty within three months of listing the parties do all acts and things necessary for the sale of the home by auction and in particular shall:
(a)Place the home with such auctioneer as the parties may agree to appoint and in default of an agreement such auctioneer as the C.E.O. of the Real Estate Institute of Queensland shall appoint (hereinafter called the “auctioneer”) for the sale at the earliest possible date;
(b)Execute all documents requested by the auctioneer for the sale of the home by auction;
(c)Request the auctioneer to recommend a reserve price to be placed on the home for the purpose of the auction sale and accept such recommended reserve price;
(d)Pay to the auctioneer any sums requested for advertising expenses in relation to the auction;
(e)Give such instructions as are necessary to a solicitor for the preparation of a contract for sale and for the contract for sale to be made available to the auctioneer prior to the auction;
(f)Attend at the auction sale of the home and negotiate with the highest bidder in the event that the reserve price is not reached; the parties agree to accept the advice of the auctioneer as to the acceptance of the price less than the reserve price;
(g)Execute the contract for sale;
(h)Co-operate in any way with the auctioneer in relation to the auction of the home including making a key available, allowing inspection of the home at all times requested by the auctioneer and ensuring that the home is in a neat and clean condition at the time of inspection by prospective purchasers;
(i)Execute all other documents necessary to complete the sale.
(3)In the event the former matrimonial home is not sold by auction in accordance with paragraph 2 of this Order the parties be at liberty to apply to the Federal Magistrates Court of Australia for further orders in relation to the sale of the former matrimonial home upon providing the other party with 48 hours notice of their intention to do so.
(4)Upon completion of the sale of the former matrimonial home, the proceeds thereof be disbursed in the following manner and priority:
(a)All payments required to discharge and release the Suncorp Metway mortgage (registered mortgage number …);
(b)All payments owing to the real estate agent and/or auctioneer pursuant to the contract of sale for the former matrimonial home;
(c) All conveyancing costs of sale;
(d) A payment of 42.71 per cent of the balance remaining to the wife;
(e) The balance (57.29 per cent) to the husband.
(5)Contemporaneously with and so as to enable the sale of the former matrimonial home to be completed the husband shall pay from his share of the net proceeds of sale of the former matrimonial home all amounts required to discharge and release the Suncorp Metway overdraft facility (registered mortgage number …).
(6)The wife retain to the exclusion of the husband:
(a) The Honda motor vehicle;
(b) Bank accounts, furniture and personal items in her possession;
(c) Her HECS liability; and
(d) Her credit card liability.
(7) The husband retain to the exclusion of the wife:
(a) The Holden utility vehicle;
(b) The KTM motorcycle;
(c) His 50 percent interest in the camper trailer;
(d) The plant and tools in his possession;
(e) Bank accounts, furniture and personal items in his possession; and
(f) His credit card liability.
(8)The husband and wife cause the funds held in the Australian Scholarships Group Account (member number …) to be held in joint names at an agreed bank, to be used for the children’s education unless there is agreement in writing otherwise.
(9)The husband retain any superannuation interests held solely in his name to the exclusion of the wife.
(10)The wife retain any superannuation interests held solely in her name to the exclusion of the husband.
(11)Unless otherwise specified in this Order:
(a)The husband and the wife are entitled to be the sole legal and beneficial owners of all items of property including money, motor vehicles, insurances, equities, superannuation entitlements and personal effects currently in the possession or control of each of them respectively;
(b)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to this Order.
(12)The Husband and the Wife execute all deeds or instruments and do all acts and things necessary to give validity and operation to the deed or instrument to give effect to this Order.
(13)If either party shall refuse or neglect to sign any document or do any such thing as may be reasonably required to give effect to this Order within 14 days of the service of a demand upon him or her to execute such document or to do such thing, pursuant to s.106A of the Family Law Act 1975 (Cth) the Registrar of the Federal Magistrates Court of Australia at Brisbane is empowered to sign such document and to direct such things to be done in the name of the party in default.
That the appeal be listed before the Full Court sitting at Brisbane on 10 March 2011 at 2:15 pm for the making of submissions in relation to the costs of the appeal.
IT IS NOTED that publication of this judgment under the pseudonym Davida & Davida is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 32 of 2010
File Number: BRC 2360 of 2009
| Mr Davida |
Appellant
And
| Mrs Davida |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an appeal by the husband against an order made by Coates FM on 12 February 2010 in property settlement proceedings between the husband and the wife. The intended effect of his Honour’s order was to divide the parties’ property, which he found to have a net value in the order of $640,000.00 (including superannuation interests), in the proportions of 60 per cent to the wife and 40 per cent to the husband. The order also required the husband to carry out certain repairs to the former matrimonial home. A copy of the order (including amendments to agreed typographical errors) is annexed to these reasons for judgment.
We mention at the outset that there was an issue before us as to whether the Federal Magistrate’s order did in fact achieve an exact 60-40 per cent division of the value of the parties’ property as found by him. This issue was one of the subjects of further written submissions filed subsequent to the hearing of the appeal. However, given that it will be necessary for us to interfere with his Honour’s order on account of other matters, it is unnecessary that we concern ourselves with whether or not the order achieved its intended result.
In addition to challenging that part of the order which required the husband to carry out repairs to the home, the husband’s grounds of appeal are directed to his Honour’s calculation of the value of the parties’ property, to his assessment of the parties’ contributions as equal, and to his 10 per cent adjustment in favour of the wife on account of the matters contained in s 75(2) of the Family Law Act 1975 (Cth) (“the Act”).
Apart from conceding one error in his Honour’s calculation of the value of the parties’ property, the wife opposed the appeal. But in the event we found substance in the appeal, the wife’s Counsel agreed with Counsel for the husband that we should re-determine the matter in order to save the parties the expense of a new trial.
Brief factual background
It need only be said by way of factual background at this point that the husband was born in 1968 and the wife in 1969. They met in February 1996. The Federal Magistrate found that they commenced a relationship in April 1996. Although the date of commencement of the relationship was controversial at trial, his Honour’s finding of April 1996 as the relevant date was not challenged on the appeal.
Prior to the parties’ meeting the husband had, in 1993, purchased a residential property in a suburb of Brisbane for $105,000.00 using cash gifts from his parents, some savings and a mortgage.
Initially the parties lived and worked overseas. They returned to Brisbane in May 1999 and commenced to live in the husband’s property. The wife commenced work with the Queensland government and the husband as a building sub-contractor. They married in September 1999.
Their two children were born in 2000 and 2002 respectively. Since the birth of the first child the wife has worked part-time. Since early 2008 the husband has worked as a TAFE teacher.
In September 2008 the parties separated, with the children living with the wife and spending approximately 40 per cent of their time with the husband who remained living in the former matrimonial home. The property settlement proceedings between the parties were heard by the Federal Magistrate in February 2010.
We will refer to further factual background matters in our consideration of the various issues raised by the appeal.
The assets and liabilities of the parties
In his reasons for judgment after first recording that each party sought “60 per cent of the net matrimonial pool” and then recording a brief history of the parties’ relationship (largely in the terms in which we have already done), the Federal Magistrate explained (in paragraph 6 of his reasons) that “by agreement, the parties provided the following schedule of assets and liabilities”. He then set out the following schedule:
ASSETS DESCRIPTION
OWNER
WIFE’S VALUE
HUSBAND’S VALUE
[Former matrimonial home]
Husband
$730,000.00
$730,000.00
Honda … Motor Vehicle
Wife
$13,500.00
$13,500.00
Holden … Utility
Husband
$12,435.00
$12,435.00
KTM Motorbike
Husband
$7,875.00
$7,875.00
½ Share in Castaway Camper
Husband
$2,500.00
$2,500.00
Builder’s Trailer, Plant & Tools
Husband
$18,840.00
$18,840.00
Furniture & Contents
Wife
$1,580.00
$1,580.00
Jewellery
Wife
$3,808.00
$3,808.00
Bank Account (as at 12.01.2010)
Wife
$530.00
$530.00
Bank Account (as at 23.01.2010)
Husband
Not known
$91.66
Bank Account (as at 27.01.2010)
Joint
-$0.03
-$0.03
ASG Fund ($17,373 for children’s education and excluded from the pool)
Joint
N/A
N/A
TOTAL
$787,259.97
$791,159.63
ADD BACKS DESCRIPTION
OWNER
WIFE’S VALUE
HUSBAND’S VALUE
Payments to C O
Wife
$7,800.00
$7,800.00
TOTAL
$7,800.00
$7,800.00
LIABILITIES DESCRIPTION
OWNER
WIFE’S VALUE
HUSBAND’S VALUE
Suncorp Mortgage registered on [the former matrimonial home] (as at 27.01.2010)
Husband
$211,527.00
$211,527.00
Visa Credit Card (as at 12.01.2010)
Husband
$4,907.42
$4,907.42
Overdraft (as at 12.01.2010)
Husband
$2,009.65
$2,009.65
HECS debt
Wife
$2,667.00
$2,667.00
Citibank Visa Credit Card (as at 12.01.10)
Wife
$1,996.00
$1,996.00
TOTAL
$223,107.07
$223,107.07
SUPERANNUATION NAME OF FUND
OWNER
TYPE OF INTEREST
WIFE’S VALUE
HUSBAND’S VALUE
Husband’s QSuper & AMP Superannuation
Husband
Accumulation
$24,471.17
$24,471.17
Wife’s QSuper
Wife
Accumulation
$48,008.00
$48,008.00
TOTAL
$72,479.17
$72,479.17
OTHER DESCRIPTION
OWNER
WIFE’S VALUE
HUSBAND’S VALUE
Loan from [Mr G]
Husband
Not agreed
$6,500.00
TOTAL
Not agreed
$6,500.00
Having set out this schedule, the Federal Magistrate said (at paragraph 7) that three “entries” in it had to be addressed. He then proceeded to address those three “entries”, all of which were issues on the appeal.
The first of the “entries” addressed by the Federal Magistrate was the item of “Payments to [C O]” which appears in the schedule under the heading “Add Backs”, and has an agreed value of $7,800.00. This item or amount related to payments made by the wife to her parents during the marriage apparently to thank them for what they had done for her and her siblings. His Honour determined that this item or amount should be “discounted from the pool” (paragraph 8), or as alternatively expressed by him “not counted” (paragraph 11). It is not necessary for us to discuss his Honour’s reasons for this decision because although the omission of this item is the subject of a ground of appeal (Ground 1(a)), it was conceded before us by Counsel for the wife that this amount should have been included in the calculation of the value of the pool. (See appeal hearing transcript, 1 October 2010, p 3.) This then is an error which underlies his Honour’s order and which it will be necessary for us to correct.
The remaining two “entries” in the schedule considered by his Honour were the wife’s jewellery (with an agreed value of $3,808.00) and the last item in the schedule described as “Loan from [Mr G]” (valued by the husband at $6,500.00). In relation to these two entries which, as already indicated, remain controversial on the appeal, his Honour said:
9.No cross-examination was directed nor submissions made on the loan to [sic] [Mr G] by the husband for $6,500.00. That also should be discounted from the pool.
10.The wife seeks that her jewellery not be counted in the assets of the marriage, as it was a gift. My deputy associate located a reference to jewellery in Cosgrove and Cosgrove, FCA PA 3568 of 1998, delivered 3 September 1999, where Collier J stated at page 4: “... I am aware that that jewellery was gifted to her by her husband and it appears that he concedes that that is the factual situation. However, it is the property of a party and I do not intend to exclude it on any basis from the pool of assets”. That the jewellery is part of the property is in line with the definition of property given in s.4 of the Act. If I try to make an exception that such was a gift, is that not in a way similar to the husband stating his larger initial contributions was a gift to the wife and should be discounted? The premise becomes circular. The jewellery is property of the marriage and it, like other property, is to be accounted for in the four step process outlined in Hickey.
11.The gross and net pool is stated in the schedule reproduced above, as the payments to [C O] and [Mr G] were not counted.
In relation to the wife’s jewellery it seems clear from paragraphs 10 to 11 of his reasons that the Federal Magistrate did intend to take it into account as property of the parties. (We note in passing that the difference between the totals of the wife’s values and of the husband’s values in the first part of the schedule can apparently be explained by the inclusion in the husband’s total of the value of the wife’s jewellery and of the husband’s bank account at $91.66).
The complaint raised by the husband in his grounds of appeal (Ground 1(c)) is, however, that his Honour did not take the jewellery into account when making his order, and in particular when calculating the value of the property which the wife would retain. It is true that the wife’s jewellery was not expressly included in the list of items in paragraph 8 of his Honour’s order which are to be retained by the wife, although it might have been intended to be covered by the expression “personal items” in her possession. But whether or not that was intended, we will endeavour to ensure that the value of the jewellery is taken into account in our re-determination of the matter (which will be necessary on account of the conceded error already mentioned and other errors which we will later identify).
The Federal Magistrate’s failure to take into account as a liability the loan from Mr G was the subject of Ground 1(b)(ii). Counsel for the husband submitted that the only evidence from the husband about this matter was the following paragraph in the husband’s affidavit sworn or affirmed on 7 September 2009 and on which he was not cross-examined:
43.I purchased a one third share in a “Castaway” camper trailer with [Mr G]. The total purchase price was $7,200.00 and I contributed the sum of $2,400.00 to this with the balance being paid by [Mr G]. This camper trailer has now been valued at $5,000.00. My one half share of this is $2,500.00.
However, Counsel also fairly conceded that this passage would not support the claimed liability of $6,500.00, and that at best the liability was $1,500.00 on the evidence.
Although we consider that the Federal Magistrate was wrong in rejecting the alleged liability because it had not been the subject of cross-examination or of submissions, we also consider that he was correct not to take the liability into account. We take this view because we do not consider that paragraph 43 of the husband’s affidavit (which Counsel for the husband acknowledged was the only evidence regarding the matter) supports the existence of a clear and certain liability to Mr G.
The re-determined assets and liabilities of the parties
It will be useful at this point before considering the challenges to the contribution assessment and s 75(2) adjustment if we identify the exact assets and liabilities on which we would re-determine this matter. In so doing we include the wife’s jewellery; the husband’s bank account of $91.66; the add-back of the payment to C O of $7,800.00; and the parties’ superannuation interests. We also adopt a figure of $740,000.00 for the value of the former matrimonial home as that was the figure used by both Counsel in their subsequent written submissions to us. We do not take into account the alleged liability to Mr G.
DESCRIPTION
OWNER
[Former matrimonial home]
Husband
$740,000.00
Honda … Motor Vehicle
Wife
$13,500.00
Holden … Utility
Husband
$12,435.00
KTM Motorbike
Husband
$7,875.00
½ Share in Castaway Camper
Husband
$2,500.00
Builder’s Trailer, Plant & Tools
Husband
$18,840.00
Furniture & Contents
Wife
$1,580.00
Jewellery
Wife
$3,808.00
Bank Account (as at 12.01.2010)
Wife
$530.00
Bank Account (as at 23.01.2010)
Husband
$91.66
Bank Account (as at 27.01.2010)
Joint
-$0.03
ASG Fund ($17,373 for children’s education and excluded from the pool)
Joint
N/A
TOTAL
$801,159.63
ADD BACKS
DESCRIPTION
OWNER
Payments to [C O]
Wife
$7,800.00
NAME OF FUND
OWNER
Husband’s QSuper & AMP Superannuation
Husband
$24,471.17
Wife’s QSuper
Wife
$48,008.00
TOTAL
$80,279.17
Total for all assets
(including add-backs and superannuation)
$881,438.80
DESCRIPTION
OWNER
Suncorp Mortgage registered on [the former matrimonial home] (as at 27.01.2010)
Husband
$211,527.00
Visa Credit Card (as at 12.01.2010)
Husband
$4,907.42
Overdraft (as at 12.01.2010)
Husband
$2,009.65
HECS debt
Wife
$2,667.00
Citibank Visa Credit Card (as at 12.01.10)
Wife
$1,996.00
TOTAL
$223,107.07
NET VALUE OF PROPERTY
$881,438.80
$223,107.07
TOTAL
$658,331.73
The parties’ contributions
The first of the appellant husband’s complaints relating to the issue of the parties’ contributions concerns an alleged error of fact made by the Federal Magistrate in his findings concerning the husband’s contributions made early in the parties’ relationship.
Having found (in paragraph 14 of his reasons) that the parties had from early 1996 shared cabins on the yachts on which they worked but “did not mix money” (at that time), his Honour continued:
15.He purchased the marital home [in the suburb of Brisbane], in 1993 for $130,000.00, which had risen in value to $150,000.00 when the couple moved in with each other; a Land Rover vehicle in 1998 for about $35,000.00; had accumulated savings of about $US47,000.00 by 1999 and possessed AMP shares, worth about $10,000.00 by about 2000, as well as some items of furniture.
16.There was a claim by the husband that he had about $40,000.00 cash when he returned to Australia. No proof was produced so I discount that.
By Ground 1(b)(i), which is clearly directed to paragraph 16 of his Honour’s reasons, the husband asserts that his Honour erred by failing to take into account “the sum of US$20,000.00 cash brought into the marriage by the husband when the husband’s evidence to the existence and fact of such contribution was unchallenged in any, or any legitimate or proper, way”.
The husband’s affidavit evidence concerning this matter was as follows (husband’s affidavit filed 7 September 2009):
17.At the time that [the wife] and I commenced our defacto relationship here in Australia in May 1999 I owned the following assets:
a) The property [in Brisbane suburb]. In 1999 I estimate that this property was valued at $105,000 and was unencumbered. No financial or other contribution was made by [the wife] to this property prior to 1999 as we were not in Australia. Annexed hereto and marked with the letter “RD 4” is a copy of my Lloyds bank statement showing my last payment on the house in the amount of $23,000.00 US dollars such payment was made on 18 November, 1997.
b) The sum of $133,000.00 in savings which I had accumulated from my earnings while on the ship. Annexed hereto and marked with the letter “RD 5” is a copy of my Lloyds bank statement showing my final pay on 5 May, 1999.
…
38.At that time I had the sum of $68,000 in US dollars which translated into $133,000.00 Australian dollars. This is the amount I contributed to the commencement of our defacto relationship. Most of these funds were contributed towards the renovations to our home and the payments made to our share of the debts and expenses in the partnership referred to below.
It is unnecessary to set out any part of the annexures “RD 4” and “RD 5” as their content is clear from the following passage of the cross-examination of the husband (Transcript, 5 February 2010, pp 50 - 52):
…
Right. And at the time that you came to Australia in May 1999, the Lloyds bank account had a balance of $US47,000-odd?---Yes, I believe so.
Right. It’s the case, is it not, that that was the entirety of your funds at that point in time - - -?---No.
- - - the $US47,000 in your Lloyds bank account?---No, that’s incorrect.
You have not, I suggest, at any time prior to your counsel raising the question with [the wife] said in any sworn material that you brought back into Australia the sum of $US20,000. have you?---Yes, I have written that in plenty of documentation.
No. Please listen to my question?---Okay. Go ahead, please.
I’m not suggesting to you that you haven’t asserted a total amount. What I’m suggesting to you is that you haven’t asserted you brought back $US20,000 in to Australia in May 1999 when you came back?---I have always asserted that. I don’t know – I’m not familiar with the court documents. I don’t know what’s what. I don’t know what document – they just seem to keep typing out documents.
Do you say to his Honour that you declared the possession of that income when you came through Customs?---No, I do not say that.
Right. So you say to his Honour this, don’t you. I didn’t declare $US20,000 when I came - - -
HIS HONOUR: Just before you go further, do I need to issue a warning or anything of that nature?
MS HOGAN: As a matter of safety, your Honour probably should; as a matter of prudence perhaps. I suspect, given my recollection of what’s on the cards, that that is an offence although I don’t know whether it was in 1999 or not, but I suspect prudently your Honour would.
HIS HONOUR: It may be an offence to come into Australia with amounts of cash over a certain limit - - -
THE WITNESS: Yes.
HIS HONOUR: - - - and not declare it. There is no statute of limitation on criminal offences. I do not know whether an offence existed at that time or not, but in fairness, I should tell you that you do not have to answer a question if it tends to incriminate you. Do you understand what I’m saying?---I understand.
All right?---How do I respond, your Honour? I just don’t answer?
I’m going to take five minutes.
MS HOGAN: Thank you, your Honour.
HIS HONOUR: And you may get advice on that issue only from your legal advisors?---Understood.
Nothing else, because you’re under cross-examination?---Understood. Thank you.
…
ADJOURNED [2.52 pm]
RESUMED [2.58 pm]
HIS HONOUR: Yes
MS HOGAN: It is the case, is it not, that you did not declare at the time you entered Australia in May 1999 that you were in possession, you say, of $US20,000?---I decline to answer that question.
MS MARTIN: Your Honour, if I can just also clarify something which may be of assistance in this situation. My recollection of the statements that have been made to date has been that there has been a certain totality of savings, some of which were savings in cash and some of which were savings in a bank account. I don’t think the assertion has ever been made that my client travelled into Australia with a particular sum of money. Now, the question that has been put to him, if that is the case, is not strictly, with all respect, what ought to be asked in respect of the savings. He certainly can be asked where the money came from or how he obtained the cash savings, and if he states that he travelled into Australia with a sum of money, then the question is quite proper. But I do not believe that statement has been made, not my recollection.
HIS HONOUR: Well, it was put to the wife that the husband had $47,360 in the Lloyds account, and an amount of $20,000 in cash.
MS MARTIN: In cash. And I understand that, and that’s what I am saying, but that was cash savings. And what we say is that at the time that the relationship commenced, it coincided with the time that they returned to Australia.
HIS HONOUR: Well, I suppose he’s now declined to answer the question, so - - -
MS MARTIN: Just for the record, I thought I ought to. Thank you, your Honour.
…
The passage from the earlier cross-examination of the wife referred to during the course of the husband’s cross-examination just set out was as follows (Transcript, 5 February 2010, p 22):
MS MARTIN: All right. It’s before your Honour. Moving then to what [the husband] says is the date when this defacto type relationship commenced, when you returned to Australia, by that stage you’d both acquired some savings?---Yes.
But he had significantly more than you did?---Yes.
And the money that [the husband] had was both cash and also money held inside the Lloyds bank account?---When we came back from overseas I don’t recall him having any cash.
I put it to you that he did, and that the figure that he’s represented as being what he held and had is what was a combination of cash and what was available inside the Lloyds bank account?
MS HOGAN: Well, I ask my learned friend to be much more particular than that.
HIS HONOUR: Yes.
MS MARTIN: Okay. I’ll be more particular.
HIS HONOUR: You’ll have to specify that.
MS MARTIN: All right. Okay. When [the husband] and yourself returned to Australia, [the husband] had about $US68,000 of which 47,360 was inside his Lloyds bank account, and the other remaining 28,000 was in cash?---I do not recall him having $20,000-odd in cash. When we first left Malaysia he may have had that much money, but he had spent all of that cash he took from Malaysia.
Before us it was submitted by Counsel for the husband that because the cross-examination of the husband became diverted onto the issue of bringing undeclared cash into Australia, it was never actually put to the husband that when he returned to Australia, he did not bring $US20,000.00 into Australia in addition to the savings of some $US47,000.00 which he had in the Lloyds bank account. Accordingly, it was submitted, his Honour ought to have accepted the husband’s evidence that when he returned to Australia he had savings in bank deposits and cash of some $US68,000.00 (see appeal hearing transcript, 1 October 2010, pp 10 -19).
In response it was the submission of Counsel for the wife that it was open to the Federal Magistrate on the evidence overall, including the wife’s evidence, not to accept the husband’s claim that he had $US20,000.00 in cash when he returned to Australia.
It must be remembered that it was the husband’s evidence in paragraph 38 of his affidavit that at the relevant time he had “the sum of $68,000 in US dollars”. The transcript reveals that it was never put to him that he did not have this sum.
It is unfortunate that the husband’s affidavit evidence was not more precise about how this sum was made up. It is also unfortunate that the cross-examination took the course it did. But on balance we consider the better view is that the husband was never satisfactorily challenged regarding his claim of having had the total sum of $US68,000.00, and thus it was not open to the Federal Magistrate to reject this particular claim on the basis that no proof of it was produced.
As was explained by Counsel for the husband, none of the other grounds of appeal which related to the parties’ contributions (being Grounds 2, 3, 4 and 5) challenged any finding of fact. Rather the essential challenge in those grounds was that such findings could not support a finding or assessment of equality of contributions.
In order to consider whether this challenge has substance it is necessary to set out the findings on the basis of which his Honour reached his conclusion that the parties’ contributions overall were equal. We now set out paragraph 14 to 33 of his Honour’s reasons (including paragraphs 15 and 16, which we repeat in order to maintain the context):
14.The evidence is that from early 1996 they shared cabins aboard two charter yachts they worked on, but did not mix money. I accept that they may have shared small payments for incidentals such as meals or entertainment, but the big items of savings and purchase of assets was done individually, particularly by the husband.
15.He purchased the marital home [in the suburb of Brisbane], in 1993 for $130,000.00, which had risen in value to $150,000.00 when the couple moved in with each other; a Land Rover vehicle in 1998 for about $35,000.00; had accumulated savings of about $US47,000.00 by 1999 and possessed AMP shares, worth about $10,000.00 by about 2000, as well as some items of furniture.
16.There was a claim by the husband that he had about $40,000.00 cash when he returned to Australia. No proof was produced so I discount that.
17.The wife brought no assets to the relationship, or very little by way of assets.
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20.As is pointed out time and again by the authorities, the reasoning is not a mathematically based calculation when financial contributions as against non-financial contributions are in contention, it is a decision on all contributions and non-financial contributions cannot be given mere token weight.
21.The couple travelled around the world together, working on a tourist yacht and sharing a cabin. They went on holidays together. They spent the majority of their time together. Apart from keeping their financial affairs separate, they displayed to the world, literally, that they were together.
22I find that the relationship began in early 1996, which is on the verge of being a long term relationship.
23.The husband’s initial contributions still have to be taken into account.
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25.The husband gave evidence that the couple shared an intimate relationship for three years.
26.His evidence was that of a committed relationship. He, as skipper of the yacht, offered her employment. While he gave the perception that such was not for his benefit, I accept the wife’s evidence that she went primarily for the relationship, not the paid position, so they could be together. I find at the time that was also the husband’s intention.
27.While they kept separate accounts, by the time the pair returned to Australia, the wife had about $US30.000.00 savings. They both maintained the relationship and occupied the house he bought, making it a family home.
28.The wife purchased a vehicle, but the pair were living with each other and it cannot be said that it was for her use only. Without that vehicle, they would have had to share the use of the Land Rover utility the husband purchased and used for employment as a carpenter.
29.I accept the wife worked part-time and raised the children and, while the husband has always been concerned about finances, that situation existed since the birth of their first child. I accept the husband mostly contributed financially, with some, important, non-financial contributions to the children and with significant non-financial contributions to the renovation of the home.
30.But Pierce indicates I must consider what has been done with all contributions over the relationship. This couple’s history does not appear to be out of the ordinary. They have the history of a couple committing to each other and having and raising children. I do not discount the husband’s work on renovating the family home or giving assistance to the wife’s parents at their farm, but the house work was for the benefit of the family and he declined payment for the farm work, indicating he was giving himself and his skills for the benefit of the wife’s extended family, which had benefit for the family as a whole. He did not expect then to be compensated for that.
31.Post-separation, the husband occupied the property and paid the outgoings, but the wife had to support herself and the children in rented accommodation. The impost on both parties is clear and I find the contributions to be equal.
32.Considering the use of the initial contributions, the wife seeks enough of the property, in a small pool, to give the children the best she can afford. Because of what the parties have done with the initial contributions and other contributions during the relationship, the weight I give the initial contributions is far less than suggested in submission by the husband’s counsel. Both parties over the course of the relationship and marriage contributed financially and non-financially and there is nothing to suggest that those contributions were unequal.
33.I would divide the pool equally.
In his submissions in support of the challenge to the Federal Magistrate’s assessment of the parties’ contributions as equal, Counsel for the husband sought to rely on the fact that the former matrimonial home together with the other assets which the husband had brought into the home now represented some 85 per cent of the value of the parties’ property, with the submission being that the Federal Magistrate had not made a proper assessment of the husband’s initial contribution.
In seeking to uphold the Federal Magistrate’s assessment of an equality of contribution, Counsel for the wife sought to rely on the non-financial contributions which the wife could be taken to have made when the parties were living together abroad prior to their return to Australia in 1999. (See appeal hearing transcript, 1 October 2010, pp 40-45). As we understood Counsel’s submissions, such non-financial contributions should be taken into account as a counter balance to the husband’s significant initial financial contribution.
The difficulty, however, that these submissions on behalf of the wife must face is that the Federal Magistrate made no finding in relation to any such non-financial contributions by the wife, and there is no challenge by the wife by way of a cross-appeal to his decision.
We accept that once the parties returned to Australia in May 1999 and commenced employment here and started their family, that their contributions from that time on could well be assessed as equal. However, by that time the husband owned the home which, whatever its value, was already unencumbered (the last payment having been made in 1997). That asset now has a gross value of $740,000.00 in circumstances where the parties have assets of a gross value of $881,438.80 and a net value of $658,331.73. Notwithstanding the caution which an appeal court should exercise in relation to challenges based only on matters of weight, we nevertheless consider that the Federal Magistrate erred in effectively according (in paragraph 32 of his reasons) no weight to the husband’s initial contribution of the unencumbered home.
When regard is had to that contribution of the unencumbered home together with the husband’s early contribution of $US68,000.00 in cash (which, as we have earlier said, should have been taken into account by his Honour), the husband’s overall contributions should have been assessed at 60 per cent and the wife’s at 40 per cent. In arriving at this assessment, we have also taken into account the finding that the wife had about $US30,000.00 savings at the time the parties returned to Australia. On a 60 per cent/40 per cent division of the assets which have a rounded down net value of $658,330.00, the husband would be entitled to assets to the value of $394,998.00 and the wife to assets to the value of $263,332.00 (which is a differential of some $131,666.00).
The s 75(2) adjustment in favour of the wife
Having found an equality of contribution, the Federal Magistrate then made a 10 per cent adjustment in favour of the wife. His findings in relation to the s 75(2) matters which supported this adjustment were as follows:
·The husband is aged 41 and is in good health. He is employed as a TAFE carpentry teacher earning about $50,000.00.
·The wife is aged 40 and is in good health. She is a public servant presently on higher duties as a class AO6 with a Queensland government department. Her permanent position is as an AO4 at a salary of about $38,000.00.
·Both parties have the mental capacity to stay in employment and hopefully increase their earnings.
·Neither party supports another person, other than the children.
·Both will have the children for significant periods of time, with the wife having them for a greater period of time.
·The duration of the marriage has not affected either party’s capacity to earn income. Both parties have that capacity and hope to earn more.
·No party is cohabitating with another person.
·The children are cared for by private agreement, nine nights with the wife and five with the husband per fortnight during school term and on a shared basis during school holidays. The wife receives Family Payment tax benefits and the husband pays child support at the rate of about $80.00 per week.
Having made the above findings (in paragraphs 35 to 49 of his reasons), none of which was challenged on the appeal, his Honour then proceeded to discuss in considerable detail, issues relating to the care of the children and also their educational needs and expenses. In this context he referred (in paragraph 55) to the fact that both parties have the care of the children and support them when they are with that party. He also referred to (and can perhaps be seen as accepting in paragraph 62 of his reasons) the wife’s criticisms of the husband for contributing no more to the expenses of the children beyond the assessed child support (and presumably also their costs when they are with him). However, his Honour was also extremely critical of the wife (at paragraphs 53, 66, 70 and 71 of his reasons) for enrolling the eldest child in a private school costing about $6,800.00 a year.
Having earlier referred to the fact (in paragraph 50) that there was no dispute that the wife was and is the primary carer of the children, and also (in paragraph 60) to the provision in s 75(2)(l) of “the need to protect a party who wishes to continue that party’s role as a parent”, his Honour concluded in relation to the s 75(2) matters:
64.What the wife seeks is a protection of her dominant or primary carer role in relation to the children. Based on the needs of two children aged 9 and 6 and the need to protect the wife’s parenting role, I would increase the wife’s amount by 10 percent, giving her 60 percent of the pool.
In his final ground of appeal (Ground 6) the husband challenges the 10 per cent adjustment on account of the children as being unreasonable and as constituting a misconception of “the intention and effect of s 75(2)”.
Given the extent to which, as already indicated, we would interfere with his Honour’s award on the basis both of the calculation of the value of the parties’ assets and perhaps more importantly, on the basis of the contribution assessment, it is probably unnecessary that we say very much regarding the challenge to his Honour’s s 75(2) adjustment. It is only really necessary that we reach our own conclusion about such an adjustment.
It may, however, be of assistance if we say that we consider that the adjustment was overly generous to the wife based as it was only on the care of the children and having regard to the other findings made in relation to the s 75(2) matters and also to his Honour’s finding of an equality of contributions and thus a division on that basis.
On our re-determination of the matter having regard to the findings made by his Honour in relation to the s 75(2) matters which are set out in paragraph 38 above and which are not challenged, and having regard also to the division which we make on the basis of the parties’ contributions and to the time which the parties have the care and thus the costs of the children, we would make an adjustment of 5 per cent in the wife’s favour.
The requirement for the husband to carry out repairs to the home
Before referring further to the order which we propose to give effect to the 55 per cent/45 per cent division, it is necessary to refer to the husband’s challenge to the parts of his Honour’s order which required the husband to carry out repairs to the home and which were in the following terms:
(1)That the husband cause the following repairs and renovations of the property situated at [a Brisbane suburb] … in the State of Queensland … (“the former matrimonial home”) to be completed within 60 days:
a)Replace and/or rebuild cupboard fronts in kitchen;
b)Re-carpet main bedroom;
c)Paint cupboards in children’s bedrooms; and
d)Tidying of the garden.
(2)That should the husband incur any costs for materials in repairing or renovating the former matrimonial home pursuant to Order 1, he shall request the wife’s consent prior to incurring such costs and any amounts which the wife has agreed to in writing are to be paid by the husband in the first instance with the husband to be reimbursed in accordance with Order 6.
The husband challenged these parts of the order on the basis that they amounted to mandatory injunctions, which were unnecessary, imprecise and incapable of enforcement.
We agree with these challenges raised by the husband and would propose to discharge those parts of the order. To the extent that the property required repair work to be carried out, which if not carried out, would reduce the value of the property, we see no reason why the parties should not both bear such reduction in the proportions in which they are to share the proceeds of the sale of the home.
Effect of proposed order
As we have observed, for the purposes of the property settlement proceedings the parties have net assets, including superannuation interests, of $658,331.73. The husband has an entitlement to 55 per cent of the net assets or $362,082.45. The wife has an entitlement to 45 per cent of the net assets or $296,249.28.
Excluding the former matrimonial home the husband has the following net assets:
·Holden … Utility $12,435.00
·KTM Motorbike $7,875.00
·Half share of Castaway Camper $2,500.00
·Builders trailer, plant and tools $18,840.00
·Bank account $91.66
·Q Super and AMP $24,471.17
Total$66,212.83
Less
·Visa credit card $4,907.42
·Overdraft debt $2,009.69
Total ($6,917.11)
Balance $59,295.72
Excluding the former matrimonial home the wife has the following net assets:
·Honda … motor vehicle $13,500.00
·Furniture/contents $1,580.00
·Jewellery $3,808.00
·Bank account $530.00
·Payments to C O $7,800.00
·Q Super $48,008.00
Total$75,226.00
Less
·HECS debt $2,667.00
·Citibank Visa credit card $1,996.00
Total($4,663.00)
Balance$70,563.00
If the former matrimonial home is sold for a price of $740,000.00 then subject to the costs of sale, and excluding the husband’s overdraft debt of $2,009.65, the anticipated net proceeds of sale is $528,473.00 ($740,000.00 less Suncorp Mortgage debt of $211,527.00 = $528,473.00).
Given that the husband has net assets of $59,295.72 and he has to receive an entitlement of $362,082.45 then he has to receive a further $302,786.73 which is 57.29 per cent of the anticipated net proceeds of sale of the former matrimonial home. As the wife has net assets of $70,563.00 and she has to receive an entitlement of $296,249.28 then she has to receive a further $225,686.28 which is 42.71 per cent of the anticipated net proceeds of sale of the former matrimonial home.
The entitlement of the husband will therefore comprise the following:
·Holden … Utility $12,435.00
·KTM Motorbike $7,875.00
·Half share of Castaway Camper $2,500.00
·Builders trailer, plant and tools $18,840.00
·Bank account $91.66
·Q Super and AMP $24,471.17
·57.29 per cent of net proceeds of former matrimonial home $302,786.73
Total $368,999.56
Less
·Visa credit card $4,907.42
·Overdraft debt $2,009.69
Total ($6,917.11)
Balance $362,082.45
The entitlement of the wife will comprise the following:
·Honda … motor vehicle $13,500.00
·Furniture/contents $1,580.00
·Jewellery $3,808.00
·Bank account $530.00
·Payments to C O $7,800.00
·Q Super $48,008.00
·42.71 per cent of net proceeds of former matrimonial home $225,686.28
Total $300,912.28
Less
·HECS debt $2,667.00
·Citibank Visa credit card $1,996.00
Total ($4,663.00)
Balance $296,249.28
Contemporaneously with completion of the sale of the former matrimonial home the husband will be required to pay from his share of the net proceeds of sale the amount required to discharge his overdraft liability of $2,009.65 so as to enable the sale of the former matrimonial home to be completed.
Costs of the Appeal
Counsel sought that there be an opportunity to make submissions in relation to costs once we had delivered this judgment. We will therefore sit again on 10 March 2011 at 2:15 pm Brisbane time (3:15 pm Australian Eastern standard daylight savings time) to receive submissions in relation to the costs of the appeal.
I certify that the preceding fifty six (56) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Finn, O’Ryan and Ainslie-Wallace JJ) delivered on 2 March 2011.
Associate:
Date: 2 March 2011
Annexure 1 – Order of Federal Magistrate Coates, 12 February 2010 (including agreed amendments to typographical errors)
That the husband cause the following repairs and renovations of … (“the former matrimonial home”) to be completed within 60 days:
(a) Replace and/or rebuild cupboard fronts in kitchen;
(b) Re-carpet main bedroom;
(c) Paint cupboards in children’s bedrooms; and
(d) Tidying of the garden.
That should the husband incur any costs for materials in repairing or renovating the former matrimonial home pursuant to Order 1, he shall request the wife’s consent prior to incurring such costs and any amounts which the wife has agreed to in writing are to be paid by the husband in the first instance with the husband to be reimbursed in accordance with Order 6.
That the husband and wife do all acts and things necessary for the sale of former matrimonial home by private treaty and in particular shall:
(a)Place the property with such real estate [sic] as the parties may agree to appoint and in default of an agreement such real estate agent as the C.E.O. of the Real Estate Institute of Queensland shall appoint (hereinafter called the real estate [sic]) for the sale at the earliest possible date;
(b)Execute all documents requested by the real estate agent for the sale of the property by private treaty;
(c)Request the real estate agent to recommend a reserve price to be placed on the property for the purpose of the sale and accept such recommended reserve price;
(d)Pay to the real estate agent any sums requested for advertising expenses in relation to the sale;
(e)Give such instructions as are necessary to a solicitor for the preparation of a contract for sale and for the contract for sale to be made available to the real estate agent;
(f)Negotiate with any potential buyers;
(g)Execute the contract for sale;
(h)Co-operate in any way with the real estate agent in relation to the sale of the property including making a key available, allowing inspection of the home at all times requested by the real estate agent and ensuring that the home is in a neat and clean condition at the time of inspection by prospective purchasers;
(i)Execute all other documents necessary to complete the sale.
That in the event that the property is not sold by private treaty within three months of listing the parties do all acts and things necessary for the sale of the home by auction and in particular shall:
(a)Place the home with such auctioneer as the parties may agree to appoint and in default of an agreement such auctioneer as the C.E.O. of the Real Estate Institute of Queensland shall appoint (hereinafter called the “auctioneer”) for the sale at the earliest possible date;
(b)Execute all documents requested by the auctioneer for the sale of the home by auction;
(c)Request the auctioneer to recommend a reserve price to be placed on the home for the purpose of the auction sale and accept such recommended reserve price;
(d)Pay to the auctioneer any sums requested for advertising expenses in relation to the auction;
(e)Give such instructions as are necessary to a solicitor for the preparation of a contract for sale and for the contract for sale to be made available to the auctioneer prior to the auction;
(f)Attend at the auction sale of the home and negotiate with the highest bidder in the event that the reserve price is not reached, the parties agree to accept the advice of the auctioneer as to the acceptance of the price less than the reserve price;
(g) Execute the contract for sale;
(h)Co-operate in any way with the auctioneer in relation to the auction of the home including making a key available, allowing inspection of the home at all times requested by the auctioneer and ensuring that the home is in a neat and clean condition at the time of inspection by prospective purchasers; and
(i) Execute all other documents necessary to complete the sale.
That in the event the property is not sold by auction in accordance with Order 4 the parties be at liberty to apply to the Federal Magistrates Court of Australia for further orders in relation to the sale of the former matrimonial home upon providing the other party with 48 hours notice of their intention to do so.
That upon the sale of the former matrimonial home, the proceeds thereof be disbursed as follows:
(a)All payments required to release the Suncorp Metway mortgage (registered mortgage number …) and the Suncorp Metway overdraft facility (registered mortgage number …);
(b)All payments owing to the real estate agent and/or auctioneer pursuant to the contract of sale for the former matrimonial home;
(c)All sums to be reimbursed to the husband in accordance with Order 2, plus interest;
(d)A payment to the wife to be calculated in accordance with Order 7; and
(e) Balance to the husband.
That the payment to the wife in accordance with Order 6(d) be calculated as follows:
A = (B x
6055 percent) minus CWhere
A = Payment to wife
B = Sale price of former matrimonial home achieved by private sale or auction (less payments listed in Orders
7(a), 7(b), 7(c)6(a), 6(b), 6(c)) plus C plus DC = Net value of Assets retained by wife pursuant to Order
98 plus any add-backsD = Net value of Assets retained by husband pursuant to Order
109That the wife retain:
(a) The Honda … motor vehicle;
(b) Bank accounts, furniture and personal items in her possession;
(c) Her HECS liability; and
(d) Her credit card liability.
That the husband retain to the exclusion of the wife:
(a) The Holden … utility vehicle;
(b) The KTM motorcycle;
(c) His 50 percent interest in the camper trailer;
(d) The plant and tools in his possession;
(e) Bank accounts, furniture and personal items in his possession; and
(f) His credit card liability.
That the husband and wife cause the funds held in the Australian Scholarships Group Account, (member number …) to be held in joint names at an agreed bank, to be used for the children’s education unless there is agreement in writing otherwise.
That the husband retain any superannuation interests held solely in his name to the exclusion of the wife.
That the wife retain any superannuation interests held solely in her name to the exclusion of the husband.
That unless otherwise specified in these Orders:
(a)The husband and the wife are entitled to be the sole legal and beneficial owners of all items of property including money, motor vehicles, insurances, equities, superannuation entitlements and personal effects currently in the possession or control of each of them respectively;
(b)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
That the parties execute all deeds or instruments and do all acts and things necessary to give validity and operation to the deed or instrument to give effect to these Orders.
That if either party shall refuse or neglect to sign any document or do any such thing as may be reasonably required to give effect to these Orders within 14 days of the service of a demand upon him or her to execute such document or to do such thing, pursuant to s.106A of the Family Law Act 1975 the Registrar of the Federal Magistrates Court of Australia at Brisbane is empowered to sign such document and to direct such things to be done in the name of the party in default.
Note – the paragraphs of the order appealed are Orders 1, 2, 6(c), 7, 8 and 9.
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