Delong and Delong
[2013] FCCA 2102
•13 December 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DELONG & DELONG | [2013] FCCA 2102 |
| Catchwords: FAMILY LAW – Property settlement – marital relationship – application undefended – large WorkCover payout to the husband – one child of the marriage substantially in the wife’s sole care. |
| Legislation: Family Law Act 1975, ss.75(2), 79(2), 79(4), 106A Federal Circuit Court Rules 2001, r. 16.05(2)(a) |
| Cases cited: Parkinson, Patrick Quantifying the Homemaker Contribution in Family Property Law (1999) 31 Fed L Rev 1 |
| Applicant: | MS DELONG |
| Respondent: | MR DELONG |
| File Number: | MLC6184 of 2013 |
| Judgment of: | Judge Riley |
| Hearing dates: | 14 October 2013 and 2 December 2013 |
| Date of Last Submission: | 2 December 2013 |
| Delivered at: | Melbourne |
| Delivered on: | 13 December 2013 |
REPRESENTATION
| Counsel for the Applicant: | Rohan Hoult |
| Solicitors for the Applicant: | Law 554 |
| Counsel for the Respondent: | There was no appearance by the respondent |
| Solicitors for the Respondent: | The respondent was not represented |
ORDERS
The respondent vacate the property known as Property V and more particularly described in Certificate of Title volume (omitted) folio (omitted) (“the property”) within 30 days of personal service on him of these orders.
The property be forthwith sold out of court and the proceeds be disbursed as follows:
(a)to pay all costs and commissions of the sale;
(b)to discharge the (omitted) Bank mortgage number (omitted);
(c)to discharge the $750 (omitted) credit card debt in the applicant’s name; and
(d)the balance be held by the applicant’s lawyers and be divided equally between the applicant and respondent, save that, from the respondent’s share of the proceeds of the sale of the property, the following sums be paid to the applicant:
(i)the sum of $7,761, being the total of the amounts paid by the applicant in June and August 2013 towards the mortgage on the property;
(ii)any amounts paid by the applicant in the future towards the mortgage on the property;
(iii)any rates on the property paid by the applicant in the future; and
(iv)the reasonable costs of preparing the property for sale paid by the applicant.
The applicant have the sole conduct of the sale of the property, including but not limited to the appointment of the real estate agent and the appointment of a firm or conveyancer to undertake the conveyancing.
The parties’ furniture (currently located at the property) be divided equally between them.
From the date of these orders:
(a)each party be solely entitled to the exclusion of the other to all property in the possession of such party (save for the furniture referred to in order 4) as at this date including any jewellery, any other furniture, furnishings, shares and motor vehicles;
(b)moneys standing to the credit of the parties in any bank accounts be the property of the party in whose name such bank account is held;
(c)each party forego any claims he or she may have to any superannuation benefit of the other;
(d)the party in whose name any such policy of superannuation or insurance stands be deemed to be the owner and the beneficiary of such policy to the exclusion of the other; and
(e)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.
Each party do all acts and things reasonably required by the other including the signing or execution of all necessary documents to give effect to the provisions of these orders within 14 days of being requested to do so.
If the respondent refuses or neglects to sign or execute and return a document within 14 days of a written request to do so then a Registrar of the Federal Circuit Court of Australia, Melbourne Registry, is hereby appointed under section 106A of the Family Law Act 1975 to sign or execute such document on behalf of the respondent upon lodgement of such document and the filing of an affidavit by the applicant’s solicitor as to the said neglect or refusal of the respondent.
The respondent pay the applicant’s taxed costs of and incidental to such request and production of documents to the Registrar.
All pending applications be otherwise dismissed.
Each party have liberty to apply.
AND THE COURT NOTES THAT:
Pursuant to rule 16.05(2)(a) of the Federal Circuit Court Rules 2001, the court may vary or set aside a judgment or order made in the absence of a party.
IT IS NOTED that publication of this judgment under the pseudonym Delong & Delong is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 6184 of 2013
| MS DELONG |
And
| MR DELONG |
REASONS FOR JUDGMENT
Introduction
This is an application for property adjustment under s.79 of the Family Law Act 1975.
The wife filed an initiating application on 26 July 2013.
The application sought parenting and property orders. The first return of the matter was on 10 September 2013. The husband attended court on that date. He had not filed any material and was not represented. The matter was adjourned for interim hearing on 14 October 2013. In addition, various parenting orders were made and order 6 required the father to file and serve any material upon which he sought to rely within 21 days. Finally, there was an order by consent as follows:
In the event that there is no appearance by or on behalf the father on 14 October 2013 or the husband fails to comply with order 6, the mother be at liberty to seek to proceed with her application on a final basis on 14 October 2013.
The husband did not file any material and did not attend court on
14 October 2013. The wife sought to proceed with her application on a final basis.
Although the wife’s initiating application did not particularise the final property orders that she sought, I am satisfied by the affidavit sworn by Emma Claire Jeans on 14 October 2013 that she, as the wife’s solicitor, notified the husband of the particular final orders that the wife sought by email on 8 October 2013. I am satisfied that the husband was aware of the orders to be sought by the wife on 14 October 2013 and was aware that the matter could be dealt with on that date on a final basis.
On 14 October 2013, the court made parenting orders on a final basis and heard the property application on final basis. Judgment was reserved.
On 17 October 2013, counsel for the wife mentioned the matter in court. He said that, after the hearing, the wife had given her solicitor instructions that might have conflicted with the case she had presented in court. On 14 October 2013, the wife’s counsel had asked the court to treat the husband as still having in his possession $135,000 from a WorkCover payout, on the basis that there was no evidence to the contrary. On 17 October 2013, the wife’s counsel said that he wished to meet with the wife to get clear instructions on that issue. Counsel asked the court not to determine the case until he had done so.
The court took the opportunity to say that there was a paucity of evidence about the break up of the husband’s WorkCover payout.
The court indicated that the amounts for past and future earnings and for pain and suffering would be dealt with differently in the assessment of contributions and future needs. The court suggested that a subpoena to WorkCover would assist the court.
Counsel said that he would arrange for a subpoena to WorkCover.
He asked that the matter be listed in about four weeks.
The court sent a notice of listing to both parties, giving a mention date of 22 November 2013. That date unfortunately had to be changed. The court then sent another notice of listing to both parties, giving a mention date of 2 December 2013.
The wife arranged for subpoenas to be issued to WorkCover and to the husband’s solicitors in the WorkCover proceedings. Both complied with the relevant subpoena, although the husband’s solicitors put a label saying “Legal Privilege” on the box of documents they produced. As neither the husband nor the husband’s solicitors filed a formal objection, the registry allowed the wife’s solicitors to inspect the documents returned under subpoena by the husband’s solicitors.
On 23 November 2013, the wife filed a further affidavit, exhibiting documents from both the husband’s solicitors’ file and the WorkCover file.
On 29 November 2013, the wife’s solicitor filed an affidavit in which she said that she had sent the husband various documents including a copy of the wife’s affidavit of 23 November 2013. That affidavit set out the wife’s proposed final orders.
The matter returned to court on 2 December 2013. The husband did not attend. I am satisfied that he had notice of the listing and of the wife’s proposed final orders.
Although the matter is being dealt with on an ostensibly final basis, any orders made in the proceeding are susceptible to being set aside on the grounds of the husband’s non-appearance pursuant to rule 16.05(2)(a) of the Federal Circuit Court Rules 2001.
For completeness, the parenting orders made on 14 October 2013 are as follows:
1.The parents have equal shared parental responsibility for X born (omitted) 2010 (“X”) save that the mother have sole parental responsibility for all child care, school and medical related decisions.
2. X live with her mother.
3. X spend time with her father as follows:
a. for four hours each week, in two hour blocks, at the paternal grandmother’s residence with time to be supervised by the paternal grandmother, upon the filing of an undertaking by the paternal grandmother stating that she is willing to supervise time spent by X with her father, and notify the mother immediately on her mobile telephone if the respondent’s mother has any concerns about X’s welfare;
b.in the alternative, if the paternal grandmother is unable to facilitate contact or is unable to unwilling to provide the require undertaking, then, if practicable, time is to occur at the Berry Street Contact Centre on days and times nominated by the centre; and
c. otherwise as agreed.
4.The parents do all acts and things to make an appropriate application to Berry Street Contact Centre to facilitate X’s time with her father.
5.The appointment of the independent children’s lawyer be discharged.
Until the wife filed her affidavit of 23 November 2013, the material before the court was very sketchy. That is partly because the husband did not file any material and did not attend any hearing after the initial directions hearing. It is also because the wife, until 23 November 2013, had not supplemented the affidavit in support of her initiating application with any further affidavit material or any subpoenaed documents. That situation has now been largely remedied by the wife’s affidavit of 23 November 2013.
The wife’s evidence was not challenged and, except where otherwise stated, I accept it.
The orders sought by the wife
The wife sought the following property orders:
1.That the Respondent vacate the property within 14 days of service of these Orders.
2.That the former matrimonial home known as Property V and more particularly described in Certificate of Title volume (omitted) folio (omitted) (the ‘property’) be forthwith sold out of Court and the proceeds be divided as follows:
a)To pay all costs and commissions of the sale.
b)To discharge the (omitted) Bank mortgage being Mortgage number (omitted).
c)To discharge the (omitted) Bank credit card debt (being $750).
d)That the be an adjustment between the parties with respect to any further mortgage arrears or costs, together with any unpaid or incurred outgoings or other costs in relation to the property (including but not limited to rates, water costs and all reasonable expenses incurred in preparing the property for sale).
e)The balance to be held by the Applicant’s lawyers and divided as to 50/50 between the Applicant and Respondent.
f)From the Respondent’s 50% share of the proceeds, the sum of $7,761 be paid to the Applicant as a reimbursement for mortgage arrears paid since June 2013, together with any other sum as outlined in paragraph 2(d) above
3.That the Applicant have the sole conduct of the sale of the property, including but not limited to the appointment of the real estate agent and the appointment of a firm or conveyancer to undertake the conveyancing.
4.That the parties’ furniture (currently located at the property) be divided equally between them.
5. That from the date of these Orders:
a)Each party shall be solely entitled to the exclusion of the other to all property in the possession of such party (save for the furniture referred to in Order 4 above) as at this date including any jewellery, any other furniture, furnishings, shares and motor vehicles.
b)Moneys standing to the credit of the parties in any bank accounts to be the property of the party in whose name such bank account is held.
c)Each party hereby foregoes any claims they may have to any superannuation benefit to or owned by the other. The party in whose name any such policy of superannuation or insurance stand shall be deemed to be the owner and the beneficiary of such policy to the exclusion of the other.
d)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.
6. That:
a)Each party shall do all acts and things reasonably required by the other including the signing or execution of all necessary documents to give effect to the provisions of this order within 14 days of being requested to do so.
b)If the Respondent refuses or neglects to sign or execute and return a document within 14 days of a written request to do so then a Registrar of the Federal Circuit Court of Australia, Melbourne Registry, is hereby appointed under section 106A of the Family Law Act 1975 to sign or execute such document on behalf of the Respondent upon lodgement of such document and the filing of an affidavit of a solicitor on behalf of the applicant as to the said neglect or refusal of the Respondent.
c)The Respondent shall pay the Applicant’s taxed costs of and incidental to such request and production of documents to the Registrar.
7. That all pending Applications be dismissed.
8.That a copy of these Orders be served by post and email on the Respondent by the lawyers for the Applicant.
The legislation
Section 79 of the Family Law Act1975 (“the Act”) gives the court power to alter the interests of the parties to a marriage in the property of the parties to that marriage. Sub-section 79(2) of the Act provides that:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 79(4) of the Act sets out the matters the court must take into account when considering what orders, if any, should be made for the alteration of the interests of the parties in property. Those matters are:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The matters to be taken into account under s.75(2) of the Act are as follows:
(a)the age and state of health of each of the parties; and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party’s role as a parent; and
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i)a party to the marriage; or
(ii)a person who is a party to a de facto relationship with a party to the marriage; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
The approach to applications under s.79
In Stanford v Stanford (2012) 87 ALRJ 74; (2012) FLC 93-518; (2012) 47 Fam LR 481; (2012) 293 ALR 70; [2012] HCA 52, the High Court explained the proper approach to an application under s.79 of the Act as follows:
37.First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. … The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
38.Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed23 that a power24[1] to make such order with respect to property and costs “as [the judge] thinks fit”, in any question between husband and wife as to the title to or possession of property, is a power which “rests upon the law and not upon judicial discretion”. …
39.Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is “just and equitable” to make the order is not to be answered by assuming that the parties' rights to or interests in marital property are or should be different from those that then exist. All the more is that so when it is recognised that s 79 of the Act must be applied keeping in mind that “community of ownership arising from marriage has no place in the common law”.26[2] Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be “decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses”.27 The question presented by s 79 is whether those rights and interests should be altered.
40.Third, whether making a property settlement order is “just and equitable" is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”.28[3] To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
23 (1956) 98 CLR 228 at 231–2; [1956] HCA 71 (Wirth).
26 Hepworth v Hepworth (1963) 110 CLR 309 at 317; [1964] ALR 259 at 264; [1963] HCA 49
28 Watson at CLR 257; ALR 560; Fam LR 11,305.
…
42.In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4). (emphases added)
In Stanford, the critical fact was that the parties had not separated. The wife had suffered a stroke and had moved into a nursing home, but the parties’ marriage was intact. It was the wife’s case guardian, a daughter from an earlier marriage, who sought the alteration of property interests.
The wife died while the judgment of the Full Court of the Family Court was reserved. Consequently, when the Full Court of the Family Court came to re-exercise the discretion, the wife had no future needs, but the husband did. The High Court noted at [47] that the courts below had not adequately considered the consequences for the husband of the orders made, namely, that his home would have to be sold.
Against that backdrop, the High Court emphasised that the just and equitable requirement of s.79(2) of the Act is not necessarily satisfied merely by a consideration of the contributions of the parties as described in s.79(4) of the Act. However, in the usual case before this court, where the parties have separated, the High Court acknowledged at [42] that the just and equitable requirement would be “readily satisfied”.
Following Stanford, it is no longer appropriate to think of “contribution based entitlements” or the “adjustment” based on future factors. Rather, the court is required to take into account all the relevant matters and then determine what order, if any, is just and equitable. It is also no longer appropriate to think of a pool of assets.[4]
[4] Parkinson, Patrick Family Property Law and the Three Fundamental Propositions in Stanford v Stanford (2013) 3 Fam L Rev 80 at 88.
Additionally, and significantly for this case, the High Court emphasised that marriage, at common law, does not create a community of ownership: [39]. The rights a person might have in his or her partner’s property and income arise from the Act, notably s.79(4) and s.72(1) respectively.
In relation to income, s.72(1) of the Act provides that:
(1) A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
In other words, there is not an absolute right to share equally in the income of a partner. Rather, such a right only arises where a person is not able to adequately support himself or herself and the other party is reasonably able to support the first-mentioned party. Consequently, there is no obligation to contribute all of one’s earnings to the matrimonial endeavour. However, if one party to a marriage spends a substantial part of his or her income on extraneous pursuits, it will obviously have an effect on that person’s contributions to the parties’ assets.
Stanford requires the following matters to be determined in applications brought under s.79 of the Act:
a)whether the parties have separated;
b)the assets and liabilities of each party;
c)the contributions of each party;
d)the future needs of each party;
e)bearing in mind all of the foregoing matters, whether it is just and equitable to make any orders altering the interests of the parties in their property; and
f)what orders, if any, are just and equitable in all the circumstances of the case.
Stanford does not require these matters to be addressed in any particular order. In most cases, it would seem rational to consider them in the order set out above. It does not seem to me to possible to determine whether it is just and equitable to make an order altering the parties’ interests in their property without the other matters mentioned above having been previously determined. That seems to be clear from the opening words of s.79(4) of the Act, which are that:
In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account [the various matters set out in s.79(4)] … .
The approach outlined above is consistent with the decision of the Full Court of the Family Court in Bevan & Bevan [2013] FLC 93-545; [2013] FamCAFC 116. I note that in that case, the Full Court said at [89]:
In our view, it will be less likely that the separate issues arising under s 79(2) and s79(4) will be conflated if judges refrain from evaluating contributions and other relevant factors in percentage or monetary terms until they have first determined that it would be just and equitable to make an order.
I also note that, in Bevan, at [79] the Full Court said, in relation to addbacks:
We observe that “notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them”, and thus is not amendable to alteration under s79. It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part. As the question does not arise here, we need say nothing more on this topic, save to note that s79(4) and in particular s 75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.
Whether the parties have separated
The wife said in her affidavit sworn on 26 July 2013 that the parties began cohabitation in February 2001, were married on 15 November 2003 and separated in May 2012.
The assets and liabilities
The wife said in her affidavit sworn on 23 November 2013 that her individual assets and liabilities at that time were as follows:
Wife’s individual assets
Value
Subaru motor vehicle
$6,000
cash at bank
$92,705
Wife’s total individual assets
$98,705
Wife’s individual liabilities
(omitted) credit card
$750
Wife’s total individual liabilities
Wife’s total individual assets less liabilities
$750
$97,955
The wife said in her affidavit sworn on 23 November 2013 that the husband’s individual assets and liabilities at that time were as follows:
Husband’s individual assets
Value
(model omitted) truck
$5,000
Audi
$2,000
(omitted) Motor Bike
$23,000
Balance of husband’s personal injury payment
$0
Total of husband’s individual assets
$30,000
Husband’s individual liabilities
$0
Total of husband’s individual assets less liabilities
$30,000
The wife said in her affidavit sworn on 23 November 2013 that the parties’ joint assets and liabilities at that time were as follows:
Joint assets
Value
former matrimonial home located at Property V
$525,000
Joint liabilities
Value
mortgage on the former matrimonial home
$265,000
Total joint assets less liabilities
$260,000
The wife said in her affidavit sworn on 23 November 2013 that her superannuation at that time was worth $22,000 and she did not know how much the husband’s was worth.
The wife said that the credit card debt was in her name but it was a joint debt, by which I understand her to mean it was a matrimonial debt.
None of the wife’s evidence as set out above was challenged. Two aspects of it were supported by documentary evidence. The exhibit marked (omitted)-17 to the affidavit sworn by the wife on 23 November 2013 is her superannuation statement. The exhibit marked (omitted)-16 to the affidavit sworn by the wife on 23 November 2013 is two curb side market appraisals by real estate agents of the former matrimonial home. One is dated 18 October 2013 and gives a value of $550,000. The other is dated 21 October 2013 and gives a value of $500,000 to $530,000. The wife has suggested the middle point of the two appraisals as the value of the property. While curb side valuations are notoriously unreliable, they are the best evidence presently available.
I accept the wife’s valuation of the former matrimonial home.
The wife did not provide any valuation evidence of the parties’ other assets and liabilities. In the absence of any challenge to the wife’s valuations, I accept them.
The wife did not say anything about the value of household effects. She seeks orders for each party to have half of the furniture in the former matrimonial home. In the absence of any evidence about the value of the furniture, I proceed on the basis that it has a negligible market value.
The wife’s individual assets less liabilities have a value of $97,955. The husband’s individual assets less liabilities have a value of $30,000. The parties’ joint assets less liabilities have a value of $260,000. The combined total value of their assets is therefore $387,955.
Contributions
a. Initial contributions
The wife said in her affidavit sworn on 23 November 2013 that at the commencement of the relationship she had a car worth about $23,000 and minimal savings. She said the husband brought to the relationship a motorbike and a car worth together about $12,000. She said the husband also had a 50% interest in a property in (omitted) that was encumbered with a mortgage. She estimated that the husband’s interest in the property in (omitted) was worth about $50,000. In the absence of any challenge or any evidence to the contrary, I accept the wife’s evidence about these matters.
b. Contributions during the marriage
The wife said the following in her affidavit sworn on 23 November 2013. At the commencement of cohabitation in February 2001, the parties lived in the husband’s house in (omitted). The wife contributed to the mortgage and household expenses.
In 2001, the wife earned about $40,000 per annum. The husband earned an unknown amount cash in hand.
In 2002, the wife injured her back at work. She received WorkCover payments of 90% of her wage initially but they then dropped to 60% of her wage. In 2004, the wife returned to work. The wife contributed to all household, mortgage and living expenses while she lived with the husband at the (omitted) property. I take it that the husband contributed to all those expenses as well.
In about 2005, the parties lived with the wife’s parents rent free for 14 months to save money. The husband rented out the (omitted) property during this period.
In 2006, the husband sold his half share in the (omitted) house to his brother for $70,000. In October 2006, the husband and wife bought the former matrimonial home in Property V for $291,000. The deposit was the $70,000 that the husband derived from selling his interest in the house in (omitted). The parties jointly mortgaged the former matrimonial home.
From 2008, the wife worked in various positions earning a salary of around $50,000 or $60,000 per year. According to exhibit (omitted)-1 to the wife’s affidavit sworn on 23 November 2013, on 14 April 2005, the husband started work as a (occupation omitted) earning about $45,000 per annum.
In 2008, the husband suffered a workplace injury. He needed two knee reconstructions and two “minor clean ups”, as the wife described them, between 2008 and 2012. The husband did not work again during the relationship.
For 18 months, from about September 2009 to March 2011, the husband received ongoing WorkCover payments which totalled about $75,000. That works out to about $50,000 per annum for that period.
In about May 2010, the husband received about $32,000 as an impairment benefit.
On 21 September 2010, X, the one child of the relationship, was born. The wife was then out of the workforce for about 18 months until May 2012. For six months of that time, the wife received maternity payments of $500 per week.
The wife was X’s primary carer and the homemaker. The wife also cared for the husband while he was injured. At certain times, for periods of eight weeks, the husband was unable to bathe himself or perform basic tasks. At these times, the wife bathed the husband, managed his medication and performed all household tasks. The wife also contributed to the care of her father-in-law, who had a heart attack in 2009.
In early 2012, the husband recovered from his injuries. In May 2012, the parties separated.
In addition, the wife said in her affidavit sworn on 26 July 2013 that during the relationship, the husband suffered from depression and used the drug “ice”.
c. Contributions post separation
The wife said in her affidavit sworn on 23 November 2013 the following. The husband received a WorkCover payout of $257,129.77 on 26 September 2012 as a result of proceedings in the County Court. The husband received the payout about four months after separation, which occurred in May 2012.
In October 2012, the husband gave the wife $135,000 from his payout and retained the balance, being about $122,000. It was understood between the parties that the husband’s payment to the wife was a partial property settlement.
The wife has spent about $40,000 of the $135,000 on rent, living expenses, legal expenses, mortgage payments and child related expenses.
The husband spent about $27,000 of his $122,000 on a (omitted) Motor Bike and about $6,500 on credit card debt. The wife believes the husband has spent the balance of his payout on drugs and other lifestyle expenses.
After separation in May 2012, the husband lived with his parents for about one month while the wife and X remained in the former matrimonial home.
However, the husband, during that period, stalked the wife, stole telephone bills from her letter box, telephoned some of the numbers listed on the telephone bills, stood outside the house and listened to the wife on the telephone and slashed the tyres on the wife’s car.
As a result of the husband’s behaviour, the wife and X moved in with the wife’s parents and the husband returned to the former matrimonial home. In November 2012, the wife found rental accommodation for herself and X. The husband has remained in the former matrimonial home. The husband discovered the wife’s address and visited her there. He started arguments and threatened self harm. The wife relocated to another rental property and does not wish the respondent to know its address.
The wife, shortly after separation, took six months leave without pay.
The wife since separation has had almost all of the care of X. X has spent only a few overnights with her father since separation and relatively infrequent daytime time. The wife said that the husband has not paid child support. However, he did give her $135,000 from his WorkCover payout.
The mortgage and the rates on the former matrimonial home have fallen into arrears. The mortgage is $1,812 per month. On 5 June 2013, the arrears were $4,200. On that date, the wife paid $5,000 on the mortgage account. The husband discovered that the mortgage repayments were $800 ahead and withdrew that money, apparently for his own use.
On 25 August 2013, the wife paid a further $2,761.49 on the mortgage account.
On 4 November 2013, the bank telephoned the wife and told her the mortgage was in arrears to the extent of $5,400. (That is about three months’ payments.) The bank said that it would hold action until
22 November 2013, when the matter was expected to be in court. After that, the bank said that it would issue a demand for payment which would give the parties 31 days to pay the arrears. Failing payment of the arrears, the bank said that it would repossess the former matrimonial home.
The wife believes that the husband is renting out rooms in the house. The house is unkempt. The wife believes it will cost $5,000 to prepare it for sale.
The wife supported her claims about her payments of the mortgage arrears with her savings account statements. It would have been preferable to exhibit a copy of the mortgage statement. Nevertheless, as the wife’s evidence was not challenged, I accept it.
On the wife’s figures, it seems that the husband must have paid some of the mortgage instalments since separation. Her payment in June 2013 would have covered arrears accrued since about March 2013.
I infer that the husband has paid any mortgage repayments since the wife vacated the former matrimonial home that the wife did not expressly claim to have paid. That is, I consider that the husband has paid the repayments for December 2012 and January, February and March 2013, being a total of about $7,200.
The s.79(4)(d), (e), (f) and (g) and the s.75(2) factors
The wife is 31 years old and the husband is 38 years old. The husband suffered knee injuries in 2008. The wife said that he had recovered from his knee injuries by May 2012 but suffers from depression and drug addiction.
The wife earns about $700 per week gross and receives $312 family tax benefit. The husband is not presently working. He receives financial support from his mother. In view of the husband’s depression and drug addiction, it seems unlikely that the husband has the capacity for appropriate gainful employment.
Apart from matters addressed elsewhere in these reasons, it appears that the parties have no income, property or financial resources.
The wife has the care and control of X. She is three years old. It seems likely that the wife will continue to be solely responsible for X’s care until she becomes independent.
There was nothing before the court about the commitments of either party other than the obvious ones of housing, food and so on. There was no suggestion that either party has responsibility to support anyone other than X. The wife said that the husband had repartnered, but nothing is known about his partner’s financial circumstances.
The wife understands that the husband will be able to receive Centrelink benefits in 2014. I gather that there was an allowance in his WorkCover payout for future earnings which prevented him being eligible for WorkCover until 2014.
The standard of living for both parties that would be reasonable in all the circumstances would be a modest one.
It was not suggested that either party might want to undertake a course or such like.
It is not suggested that the parties have any substantial creditors other than the mortgagee of the former matrimonial home.
The husband has contributed to the wife’s present property by giving her approximately $135,000 in October 2012 and by contributing the 50% share in his property at (omitted) at the outset of the relationship. Otherwise, neither party has contributed significantly to the income, earning capacity, property or financial resources of the other party. It does not appear that the marriage has affected the earning capacity of either party to the marriage.
It does not seem that there is any particular need, of a financial nature, to protect a party who wishes to continue that party’s role as a parent.
As mentioned above, the wife understands that the husband has repartnered, but the financial circumstances of that relationship are not known.
The terms of any property order are to be determined in this proceeding.
The wife said that the husband is not providing child support. That claim was not contradicted and I accept it, except to the extent that the voluntary payment of $135,000 by the husband to the wife might be regarded in part as informal child support.
No financial agreement that is binding on the parties was brought to the attention of the court.
There are no other facts or circumstances that I consider the justice of the case requires to be taken into account.
Whether it is just and equitable to alter the parties’ property interests
In view of paragraph 42 of Stanford, the fact that the parties are no longer living in a marital relationship and the various findings made above in relation to contributions and future needs, I consider that it would be just and equitable to alter the parties’ property interests in this case. At the very least, it is necessary to sever the joint tenancy in the former matrimonial home.
What order is just and equitable
The husband contributed substantially more than the wife at the commencement of the relationship. He had assets worth about $62,000 and the wife had assets worth about $23,000.
During the marriage, the wife contributed more as a homemaker and carer, not least because the husband was incapacitated and needed to be cared for himself. The financial contributions of each party during the marriage were probably roughly equal, given that the wife was out of the work force for some time with injury and while on maternity leave.
Post separation, the wife has contributed mortgage repayments of $7,761, even though she was not living in the house. The husband also seems to have contributed about $7,200 in mortgage repayments post-separation.
The mortgage repayments saved the husband paying rent, which the wife had to pay. However, it was not suggested that the mortgage repayments were interest only. Therefore, part of the mortgage repayments contributed to the parties’ equity in the property. It is not known how much.
The wife post separation has had virtually the sole care of X.
A very significant post separation contribution was the husband’s WorkCover payout. In an article entitled Quantifying the Homemaker Contribution in Family Property Law (1999) 31 Fed L Rev 1, Professor Patrick Parkinson said the following at pages 32-3:
(iii) Damages awards
In assessing the way in which the homemaker contribution has application to damages awards, a similar notion of marriage as a partnership has been applied. The damages award, or at least that part of it which can be attributed to the compensation of pain and suffering and loss of amenity, is normally seen as a contribution by the injured spouse. Components of the damages award which compensate loss of earnings at a time when the couple were still cohabiting could be seen as a contribution to the family finances in the same way as salary which is offset in the usual way by the contributions of the other spouse.105[5] The contribution of the spouse who was not injured in caring for the injured spouse may also be seen as a contribution which goes some way towards offsetting the significance of the damages award as a contribution by the injured spouse alone.106[6]
(iv) Contributions made after separation
The case-law developed on post-separation assets also looked at the nexus which could be discerned between the homemaker contribution and the assets in question. The issue has arisen in relation to lottery wins. In Mackie and Mackie,107[7] the husband won a substantial lottery prize after separation. It was treated as a windfall for the husband, and the wife was not entitled to a share. This case was cited with apparent approval by the Full Court in Zyk and Zyk.108[8] It stated that Mackie was a case where the lottery win ‘was property of one of the parties to which the other party could not have made any contribution except, perhaps, through post separation para. (c) contributions. Otherwise its relevance would be confined to s75(2) factors.’
105[5] O’Brien and O’Brien (1983) FLC 91-316
106[6] For example, where the wife nursed her severely disabled husband in the years after he suffered injury, the proportion of the damages award which was attributable to the need for nursing care for the relevant period of the marriage was treated as a direct contribution by the wife, because in providing those services without payment, she had contributed to the conservation of the damages award. The money would otherwise have had to be spent on providing a nurse for the husband: Zubcic and Zubcic (1995) FLC 92-609.
107[7] (1981) FLC 91-069
108[8] (1995) FLC 92-644, 82,511.
…
The Full Court decision in Jacobson and Jacobson10[9] illustrates the principles for assessing contributions to the welfare of the family after separation. It affirmed that where one party saves money or accumulates assets solely from post-separation efforts, these will be credited to him to her in circumstances where the other party has made no contribution, direct or indirect, towards the accumulation of those post-separation assets. However, a homemaker contribution may indeed be an indirect contribution. In this case, nearly four years had elapsed from the time of separation to the trial. In this period, the husband had acquired two properties, to which, he argued, the wife had made no contribution. The wife meanwhile, had had the onerous responsibility of caring for a teenage boy (D) who was intellectually disabled. This was treated as a contribution to the husband’s post-separation earnings because the wife’s care for the child after separation left the husband ‘free to pursue his income-earning activities to the fullest extent’. Furthermore, she had made a substantial contribution to the husband’s earning capacity during the marriage by caring for the home and five children, and this was reflected in the husband’s post-separation earnings.111[10]
Assets acquired after separation may of course be relevant in the assessment of s 75(2) factors irrespective of any nexus between the homemaker contribution during the course of the marriage, and the post-separation assets.112[11]
10[9] (1989) FLC 92-003
111[10]Ibid 77,173.
112[11]For example in Collins and Collins (1990) FLC 92-149, 78-043-2 a windfall gain of $12 million following separation was considered in terms of s 75(2) factors.
From the subpoenaed documents produced by WorkCover, it appears that the husband accepted a settlement of $310,000. The assessment leading to that settlement allowed $118,000 for general damages, which I understand to be pain and suffering, $42,000 for past economic loss and $152,287 for future economic loss.
The future economic loss component was calculated on the basis of the husband being able to work at 50% capacity until age 46 and at 100% capacity after that. It appears that the assessment did not take account of the husband’s depression and drug addiction.
Of the $310,000 settlement, some money was repaid to Centrelink and some was expended on the costs of the personal injuries action, leaving the $257,000 mentioned previously.
The present case is complicated by the facts that:
a)the husband received the payout after separation, but his injuries affected his earning capacity and ability to contribute around the house during the relationship;
b)the husband gave the wife more than half of his payout shortly after separation; and
c)the husband seems to have spent all of the money he retained for himself.
In relation to future needs, the wife is able to work but will probably have the sole care of X until she is independent. The husband has a very limited capacity to work because of his injuries and his depression and drug addiction. He will not be eligible for Centrelink until next year, on the wife’s evidence. I suspect, from the WorkCover documents, that it may be even longer before the husband will be eligible for Centrelink benefits. However, in the absence of evidence to that effect, I make no finding about it.
As the wife’s superannuation is modest, the husband’s is unknown, both parties are a long way from retirement, and neither party has sought a superannuation split or given procedural fairness to a superannuation trustee, it seems that any adjustment of the parties’ property interests should proceed on the basis that their superannuation will remain untouched.
The wife seeks to retain the assets she presently holds and receive 50% of the equity in the property. That would give her about 58% of the parties’ present combined assets. In the absence of any evidence or submission from the husband to the contrary, that seems to me to be just and equitable. While the husband’s financial contributions have been greater, the wife’s non-financial contributions have been greater. The wife’s earning capacity, at least for the time being, is greater. On the other hand, the wife is likely to have the care of X until she is independent, probably without the benefit of any child support from the husband.
The wife also seeks a reimbursement of the amount she has paid on the mortgage since separation. As I have noted, the husband appears to have paid some mortgage repayments since separation. The wife did not provide a mortgage statement, which would have shown how much of the mortgage repayments have contributed to the equity in the property. Nevertheless, I consider that the wife should be reimbursed for the post separation mortgage repayments she has made as well as for any she might make in the future.
The wife may need to make such future mortgage repayments to prevent the bank foreclosing on the former matrimonial home. If the bank sold the house in a mortgagee sale, the costs of sale would be very large, and would ultimately be borne by the parties.
The wife said in her affidavit sworn on 23 November 2013 that, in July 2012, the husband agreed to sell the former matrimonial home and it was placed on the market. It was scheduled to be auctioned in September 2012. However, the husband promised the wife that he would get a job and buy her out by December 2012. On that basis, the wife agreed to withdraw the property from the market. The husband did not fulfil his promise.
In all the circumstances, there seems no realistic prospect that the husband will be able to buy out the wife. As the wife does not seek orders that she be permitted to buy out the husband, the house will have to be sold.
Given that the husband has no interest in selling the house, and given that he has allowed the property to fall into disarray, it is preferable that the wife be given full authority to sell the house. As the bank is threatening foreclosure, it is in the parties’ financial interest that the sale occur as soon as possible.
The wife seeks an order that the husband vacate the property within 14 days. I think 30 days is more reasonable. That will allow the husband time to move out shortly after Christmas. It will also allow the wife to get the property cleaned up during January and schedule a sale for late February.
The wife said in her affidavit sworn on 23 November 2013 that the husband’s parents have a vacant investment property, which the husband has said he will move into. I accept the wife’s evidence about these matters.
The husband was very good to voluntarily give the wife $135,000 from his WorkCover payout. However, on the other hand, he did renege on his promise to buy out the wife’s share of the former matrimonial property. In the circumstances of this case, it seems that there is a considerable risk that the husband will not cooperate in the sale of the former matrimonial home. Consequently, it seems to me to be necessary for there to be an order under s.106A of the Act.
The wife has also sought an adjustment for any rates and other expenses she might incur in getting the property ready for sale. The wife asked that those amounts, and the reimbursement for mortgage repayments, should come from the husband’s share of the proceeds of sale. I consider that it is just and equitable that the rates, mortgage repayments and reasonable costs of preparing the property for sale should come from the husband’s share. The costs of preparing the house for sale have been largely necessitated by the husband not properly looking after the house. The rates would have been incurred while the husband was living there. The mortgage repayments may include some contribution to equity, but it seems unlikely to be a significant proportion of the mortgage repayments. In the absence of any evidence to the contrary, and given that the husband has been living in the house rent free for a considerable period of time, I consider that it is reasonable that the husband reimburse the wife all of the mortgage repayments she has made since and including June 2013.
The wife also sought an order that she have half of the furniture in the former matrimonial home. That seems to me to be just and equitable, given that the furniture seems to be of negligible market value but possible sentimental value.
The wife’s credit card debt, being matrimonial debt, should be paid from the proceeds of sale prior to the division of the proceeds.
I will include an order for liberty to apply in case there is any issue about the reasonable costs of preparing the house for sale or the division of the furniture.
I will also include the usual notation to the effect that orders made in the absence of a party may be set aside.
I certify that the preceding one hundred and fifteen (115) paragraphs are a true copy of the reasons for judgment of Judge Riley.
Date: 13 December 2013
24Given by s 21 of the The Married Women’s Property Acts 1890–1952 (Qld), a provision which
corresponded with s 17 of the Married Women’s Property Act 1882 (Imp).(Hepworth) per Windeyer J.
27 Hepworth at CLR 317; ALR 264 per Windeyer J. See also Wirth at 231–2 per Dixon CJ.
Key Legal Topics
Areas of Law
-
Family Law
-
Property Law
-
Equity & Trusts
Legal Concepts
-
Remedies
-
Costs
-
Injunction
-
Constructive Trust
0
5
0