Dengate & Kettering
[2021] FCCA 1254
•8 June 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Dengate & Kettering [2021] FCCA 1254
File number(s): TVC 1116 of 2020 Judgment of: JUDGE BOWREY Date of judgment: 8 June 2021 Catchwords: FAMILY LAW – Property – De facto relationship – lengthy relationship – wife seeks the equal division of property – husband seeks adjustment in his favour for work developing/renovating properties – issue of add-backs – wife in poor health Legislation: Family Law Act 1975 (Cth) Cases cited: Bevan & Bevan [2013] FamCAFC 116
Fields & Smith [2015] FamCAFC 57
Hoffman & Hoffman [2014] FamCAFC 92
Stanford & Stanford [2012] HCA 52
Steinbrenner & Steinbrenner [2008] FamCAFC 193
Number of paragraphs: 102 Date of hearing: 19-20 May 2021 Place: Townsville Counsel for the Applicant: Mr Collins Solicitor for the Applicant: Firth Lawyers The Respondent appearing on his own behalf ORDERS
TVC 1116 of 2020 BETWEEN: MS DENGATE
Applicant
AND: MR KETTERING
Respondent
ORDER MADE BY:
JUDGE BOWREY
DATE OF ORDER:
8 JUNE 2021
THE COURT ORDERS BY WAY OF PROPERTY SETTLEMENT THAT:
1.The Husband transfer to the Wife at the Wife’s cost and within 60 days of the date of this Order, all of his right, title and interest in the real properties situated at B(1) Street, Town C and at D Street, Town C, being the properties described as Lot … on CP … and Lot … on CP … respectively, unencumbered.
2.At the Husband’s discretion, the parties deal with the remaining real properties as follows:
2.1The properties are:
(a)E(1) Street, Town C described as Lot … on RP …
(b)E(2) Street, Town C described as Lot … on RP …
(c)E(3) Street, Town C described as Lot … on RP …
(d)E(4) Street, Town C described as Lot … on SP …
(e)B(2) Street, Town C described as Lots … and … on CP …
(f)F Street, Suburb G described as Lot … on RP …
(g)H Street, Suburb G described as Lots … and … on RP …
2.2The Wife shall transfer to the Husband at the Husband’s cost and within 60 days of the date of this Order, all of her right, title and interest in all or any of the properties referred to in this paragraph, and/or
2.3Join with the Husband in terms set out in paragraph 3, to sell all or any of those properties.
3.Should the Husband determine to sell any of the properties referred to in paragraph 2, the following shall apply:
3.1Subject to 3.3, the parties shall agree on a real estate agent. If no agreement, each party shall be entitled to appoint an agent and be entitled to sign any listing/commission agreement;
3.2A party appointing an agent pursuant to 3.1 shall send or arrange the agent to send to the other party, a copy of the listing/commission agreement. If the other party does not appoint his/her own agent and sign a listing/commission agreement within three (3) days of receipt of that document, the first mentioned agent shall be deemed to be the agent for the sale of the property.
3.3For the Town C properties, the real estate agent or one of the real estate agents as applicable, shall be J Real Estate;
3.4The listing price for any property shall be the price agreed between the parties or if no agreement, the price shall be as recommended by the real estate agent or if more than one agent is appointed, the average/mean figure between the prices suggested by each agent;
3.5Each party shall do all acts and sign all documents as required and within 24 hours of any request, to allow the relevant sale/s to proceed.
3.6The Husband shall cooperate with all requests for property inspections by potential buyers.
3.7The sale proceeds of any property sold shall be paid to the funds set out in paragraph 13.
4.The sale of the F Street, Suburb G property should the Husband determine to sell it, shall take place on the following basis:
4.1The property may be sold in its present state “as is”.
4.2Except for any chattels in 10.4, the Husband is entitled to all Chattels and collectables of whatever nature situated at the property.
4.3In accordance with 4.1, any Chattels not removed from the property by the Husband within 60 days of the date of this order, shall be sold with the property.
4.4Should the husband not arrange for the transfer to his sole name of the F Street, Suburb G property within 60 days of the date of this order, it shall be sold in accordance with paragraph 3.
5.Within 60 days of the date of this Order, the Husband shall obtain finance or shall pay from the proceeds of sale referred to in paragraph 3, sufficient to discharge the loan obligations of the parties for the following:
5.1Bank K Equity Access Account ending …;
5.2Bank K Home Loan Account ending …;
5.3National Australia Bank Loan Account ending ….
The Husband shall pay and keep indemnified the Wife against all liability for payment of principal and interest under the said loans and personal covenants therein, pending and until such discharge.
6.The Wife shall pay and keep indemnified the Husband with respect to the payment of all rates, insurance and other outgoings relating to the properties referred to in paragraph 1 which become due and payable from the date of the transfer to her of those properties.
7.The Husband shall pay and keep indemnified the Wife with respect to the payment of all rates, insurance and other outgoings relating to the properties referred to in paragraph 1 which have been or are due and payable up to the date of the transfer of those properties.
8.The Husband shall pay and keep indemnified the Wife with respect to the payment of all rates, insurance and other outgoings relating to the properties referred to in paragraph 2.
9.The Husband and/or the Wife as the case may be, transfer his or her title and interest in any jointly owned policy or policies of life insurance so that sole ownership of such policy or policies shall vest solely in the person shown as the life insured.
10.The Wife be entitled to collect at her cost and upon giving not less than three (3) days’ notice in writing by email or text message to the Husband, the following items:
10.1The wall telephone at E(1) Street, Town C;
10.2The dinner set at E(1) Street, Town C;
10.3The saucepan set purchased by the Wife for E(1) Street, Town C;
10.4The following items numbered from the valuation in these proceedings:
10.4.1Item 9 – Carved camphorwood chest;
10.4.2Item 11 – Stained timber storage chest;
10.4.3Item 12 – 4 x stained timber chairs;
10.4.4Item 19 – polished timber table, twin fluted legs
10.4.5Item 40 – large early 20th century mirror backed sideboard;
10.4.6Item 42 – carousel horse on stand;
10.4.7Item 43 – early 20th century hallstand with bench seat;
10.4.8Item 46 – pair of timber high back armchairs;
10.4.9Item 50 – early 20th century dressing cabinet, pivotal mirror with swan neck pediment, flanked by trinket drawers, 4 drawer split;
10.4.10Item 52 – polished timber chest of drawers, 7 drawer split including hat drawers (previously belonged to applicant’s father);
10.4.11Item 53 – timber toilet mirror (handmade by Applicant’s father); and
10.4.12Item 54 – oak marble top washstand, tile back.
11.Subject to 15, the Husband shall be solely entitled to all of the remaining chattels owned by the parties and to the extent that such chattels of whatever nature are owned jointly, the Wife shall transfer her interest to the Husband and relinquish any claim whatsoever to those items.
12.The Husband shall make a cash payment to the Wife within 60 days of the date of this order, so as to pay to the Wife an amount representing 50% of the value of the relationship property of the parties, calculated in accordance with paragraph 13. The payment by the Husband shall be the amount necessary for the Wife to receive 50% of the deemed value (according to this order) of property to be retained by each party or in circumstances where real property is sold pursuant to paragraphs 2 and 3, the available sale proceeds of each property so sold shall be included in the relevant calculation.
13.The calculation of the value of relationship property for the equal division between the parties referred to in paragraph 12, shall include the following:
13.1The value of the properties set out in 13.2.1 – 13.2.9 and/or the actual/net sale proceeds received for each of the properties if sold, pursuant to paragraphs 2 and 3, being the sale proceeds after deduction of agents commission, legal costs and other expenses of sale, rates adjustment if any and the repayment of any relevant bank loan; and/or
13.2For the relationship assets, the following values and liabilities subject to property sales and associated loan repayments:
13.2.1.E(1) Street, Town C $175,000;
13.2.2.E(2) Street, Town C $150,000;
13.2.3.E(3) Street, Town C $150,000;
13.2.4.E(4) Street, Town C $150,000;
13.2.5.D Street, Town C (Wife) $250,000;
13.2.6.B(1) Street, Town C (Wife) $200,000;
B(2) Street, Town C $600,000;
13.2.7.F Street, Suburb G $225,000;
13.2.8.H Street, Suburb G $65,000;
13.2.9.Boats & Trailers $8,000;
13.2.10.Motor Vehicle 1 (Wife) Nil;
13.2.11.Motor Vehicle 2 Nil;
13.2.12.Vintage Motor Vehicle 3 $2,000;
13.2.13.Sulky $1,500;
13.2.14.Antiques & building materials $5,760;
13.2.15.Dingo & Trailer $5,000;
13.2.16.House moving trailer & equipment $3,000;
13.2.17.Mower $800;
13.2.18.Furniture in all rental properties other
than in B(1) Street, Town C and D Street, Town C $20,000;
13.2.19.Furniture in E(1) Street, Town C $2,000;
13.2.20.Box trailer (Wife) $1,000;
13.2.21.Quad Bike $500;
13.2.22.Shipping containers $1,000;
13.2.23.The items referred to in paragraphs 10 and 15.6
of this order (Wife) Nil;
13.2.24.Bank K Account #...65 $2,587;
13.2.25.Bank K Account #...20 $31;
13.2.26.NAB Account #...87 $333;
13.2.27.NAB Account #...88 $500;
13.2.28.Bank K Account #...51 (Wife) $236;
13.2.29.Purcell Taylor legal fees $6,800;
13.2.30.Steel beams $1,000;
13.2.31.Motor Vehicle 4 $425;
13.2.32.Clothes line Nil;
13.2.33.Motor Vehicle 5 $3,500;
13.2.34.Motor Vehicle 6 $4,000;
13.2.35.Super Fund L Fund (Wife) $849;
13.2.36.E(1) Street, Town C valuation costs $770;
13.2.37.Chattel valuation cost $2640.
13.2.38.Husband’s Superannuation 26/4/21 $28,090
LIABILITIES
13.2.39.Bank K Equity Loan #...90 $417,715
13.2.40.Bank K Home Loan #...05 $43,572
13.2.41.NAB ‘B(2) Street, Town C’ Loan #...99 $209,587
The liabilities referred to in 13.2.40 – 13.2.42 shall be varied according to the actual repayment to the relevant bank required at the date of any real property sale.
14.The Husband retain and be declared the owner of:
14.1The benefit and ownership of all policies of Superannuation including death benefits attached thereto, held in his name;
14.2The benefit and ownership of all policies of life insurance including any shares issued or to be issued pursuant to any policy, held in his name;
14.3Redundancy payments, long service leave and all other benefits to which he is or has been entitled by virtue of any employment;
14.4Subject to the division in 13, all monies and accounts retained by the Husband at the date of separation and/or acquired since separation;
14.5All motor vehicles including the Motor Vehicle 2, motor bikes, trailers and boats in the Husband’s possession;
14.6Household contents and items of personal property in the possession of the Husband.
15.The Wife retain and be declared the owner of:
15.1The benefit and ownership of all policies of Superannuation including death benefits attached thereto, held in her name;
15.2The benefit and ownership of all policies of life insurance including any shares issued or to be issued pursuant to any policy, held in her name;
15.3Redundancy payments, long service leave and all other benefits to which she is or has been entitled by virtue of any employment;
15.4Subject to the division in 13, all monies and accounts retained by the Wife at the date of separation and/or acquired since separation;
15.5The Wife’s Motor Vehicle 1 motor vehicle registration number … and the box trailer registration number …, on the basis that the Wife is responsible for all costs relating to those vehicles.
15.6The items referred to in paragraph 10 and all household contents and items of personal property in the possession of the Wife.
AND THE COURT NOTES THAT:
A.The items set out with values in paragraph 13 are the relationship property to be divided between the parties. The value of real properties which the Husband determines to sell, shall be the funds actually available from each sale after payment of liabilities (including secured loans) and costs, in substitution for the figures shown in paragraph 13.
B.Some figures shown in paragraph 13 are add-backs or notional amounts, such as the inclusion of the cost of valuations which the Wife has paid. The Wife shall benefit from including such amounts in the calculation in paragraph 13, so as to reimburse her for payments made.
C.The relationship property to be retained by or transferred to the Wife is shown in paragraph 13 as (Wife).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment under the pseudonym Dengate & Kettering is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BOWREY
The proceedings before the court are with respect to property settlement.
The parties namely the Applicant MS DENGATE and the Respondent MR KETTERING are not married. Nevertheless I will refer to them in this judgment as Husband and Wife.
RELEVANT DOCUMENTS
The documents relied on by the applicant are as set out in her case outline filed 7 May 2021, namely:
3.1Amended initiating application filed 12 April 2021
3.2 The Wife’s trial affidavit filed 19 April 2021
3.3 Amended statement of financial circumstances filed 19 April 2021
3.4 Affidavit of Mr M filed 19 April 2021
3.5 Affidavit of Mr N filed 19 April 2021
3.6 Affidavit of Ms O filed 19 April 2021
3.7 Affidavit of Mr P filed 20th April 2021
3.8 Subpoena issued to Bank K Ltd
3.9 Subpoena issued to National Australia Bank Ltd
3.10 Subpoena issued to Q Accountants
The Husband’s documents are his Response, Affidavit and Financial Statement all filed on 19 November 2020.
I was advised that following my comments to the husband who is self-represented, on 4 May 2021, the husband sent to the solicitors for the wife a document which consisted of a series of numbers apparently corresponding to the 207 paragraphs of the wife's trial affidavit. Next to each number were the words “agreed” or “not agreed”. That document has not been filed. It is Exhibit 2.
PROGRESS OF CASE
At the commencement of the hearing on 19 May, Mr Collins of Counsel for the Wife requested and I agreed, that the Husband give evidence and be cross-examined first. This was because the Husband had not filed trial documents. The Husband explaining and clarifying his position in evidence first would make more sense, make the trial issues clearer and save time.
My comment above with respect to the Husband's document which was sent to the Wife's solicitor arises from my advice to the Husband when this matter was mentioned on 4 May, that he was in breach of the trial directions made by Judge Middleton on 2 March 2021. Those trial directions required, by reference to the relevant paragraphs:
(4) Amended application or amended response to be filed and served no later than 28 days before the trial.
(6) That the evidence of the parties and their witnesses be by way of affidavit (unless leave has otherwise been granted by the court).
(a) The applicant file and serve a consolidated trial affidavit by 20 April 2021.
(b) The respondent file and serve a consolidated trial affidavit by 27 April 2021.
(c) Each party be permitted to rely upon only one affidavit by each of their witnesses.
(7) By no later than 7 May 2021 all parties file and serve an Outline of Case document.
(8) No party be permitted to rely upon an affidavit or outline if it is not filed in accordance with these orders, unless they have first obtained leave of the court.
(9) No party is permitted to advance a case that is different from that set out in the application or response unless they have first obtained leave of the court.
A. In the event of non-compliance by any party with the orders, directions, rules or regulations of this court relating to the filing of documents or any other procedural issues, the application may be struck out, the proceedings may be directed to proceed undefended or the trial date may be vacated.
It was pointed out to the Husband at the compliance hearing on 4 May that he had not complied with any part of the above-mentioned order. My comments to the Husband on 4 May included that he was approximately one week overdue in complying with paragraph 6 (b) of the 2 March order. The Husband responded that by the following day he would forward a document to the solicitor for the Wife. In the end result, I am advised and that the “agreed or not agreed” document being Exhibit 2, is the only material the Husband has served.
Perhaps not surprisingly, Mr Collins of Counsel for the Wife submitted on 13 May when the trial was to proceed, that I should direct that the Wife’s case proceed undefended. The trial could not proceed on 13 May as the Wife had been admitted to hospital the previous day. After reviewing the history of this matter and relevant cases and including that the Husband had filed response material originally, I declined to make that order.
ISSUES AND COMPETING CLAIMS
In the Wife’s Initiating Application (Family Law) filed 18 August 2020, she sought a final order that the property pool of the parties be determined and be divided as to 60% to the Wife and 40% to the Husband.
In the Wife's Amended Initiating Application filed 12 April 2021, she seeks as a final order, an equal division of the relationship property.
The Wife further seeks in her Amended Initiating Application that her 50% interest in the relationship property be two pieces of real estate, her motor vehicle, some chattels and a cash payment to make up the 50% total value.
The Husband's Response filed 19 November 2020 seeks that the Wife's Initiating Application be dismissed and that the relationship property be divided as to 60% to the Husband and 40% to the Wife. The Husband seeks that the Wife receive two (2) properties at Suburb G outside City R and the Husband receive seven (7) properties at Town C outside Town S. I refer to “receive” as all 9 properties are jointly owned at the present time.
FAMILY LAW ACT PROVISIONS
The main statutory provisions relevant to this case for the determination and division of the relationship property between the parties, are:
14.1Section 90SF (3).
14.2Section 90 SM (1).
14.3Section 90 SM (4)
JUST AND EQUITABLE
I have considered whether in these proceedings it is just and equitable to make an order for property settlement. In my view, this is the case. I have taken into account:
15.1The parties need a resolution to their financial matters following separation. Separation occurred in December 2019 when the Wife moved from the parties’ home. This ended a relationship which commenced in 1983 so that except for a short separation around 1990, the parties were together for 36 years.
15.2The parties have a range of relationship assets. This includes as referred to above, nine (9) pieces of real estate. To the extent that the real estate is jointly owned and its ownership could be dealt with in a Civil (State) Court, this court has jurisdiction to decide on those matters together with the division of other relationship property held by each of the parties.
15.3In this case, superannuation is held by one party only, the husband. This court can divide superannuation entitlements between separating or separated former spouses/partners.
15.4This court can decide on what percentage division of relationship property should occur, by reference to family law principles.
For the reasons set out above, I find that it is just and equitable to make an order for property settlement between the parties.
FACTUAL BACKGROUND
Both the Husband and the Wife filed affidavits. The Wife has filed a case outline. Some relevant and generally agreed details are as follows:
17.1The Husband was born in 1955 and turned 66 recently.
17.2The Wife was born in 1960 and will soon be 61.
17.3During the relationship the Wife's daughter Ms T who is now 41, lived with the parties when she was young.
17.4The parties commenced living together in City R in 1983. There was a separation according to the Wife, for a short time in 1990.
17.5The parties separated in December 2019. This means that the relationship was of approximately 36 years.
17.6The parties bought and sold real properties in City R and in Town C near Town S.
17.7The parties had employment at various times during the relationship.
17.8The Wife claims that she received and contributed to relationship finances, inheritances of:
(a)$61,611 in late 2010 and
(b)$125,155 in 2013.
17.9The Husband received and apparently contributed, an inheritance of $68,000 in 2018.
17.10The Wife has been in poor health for at least 10 years, including being diagnosed with cancer in 2009 and undergoing surgery. She has a more recent diagnosis of various medical conditions. The Husband agrees with this regarding the Wife’s health, saying at paragraphs 69 and 70 of his affidavit filed 9 November 2020 that the Wife has a limited ability to earn income from employment and is in poor health due to her medical conditions.
17.11At present, the Wife shares rental accommodation with her adult daughter and is in receipt of Centrelink income.
17.12The Husband wishes to preserve and have transferred to him, investment/rental properties at Town C (paragraph 68 of his affidavit filed 9 November 2020) so as to receive an income from them. This will include according to his response also filed on 9 November 2020 that the Husband will refinance the joint debts secured over those properties.
17.13The Husband’s main occupation (paragraph 62 of his affidavit) in recent years has been as an owner-builder/renovator of rental properties in the Town C area. He operates “B(2) Street, Town C” which is a small accommodation business at Town C, separate from the houses there which are rented.
RELATIONSHIP ASSETS
In her first affidavit filed 18 August 2020 the Wife sets out a table of relationships assets. I refer to it below.
In his affidavit filed 9 November 2020, the Husband sets out his table of relationship assets. Significantly with respect to the nine (9) pieces of jointly owned real estate, the values put on those properties by each party were the same at the time of signing these affidavits.
The Wife arranged for a formal valuation of some of the real properties. The Registrar of this Court ordered the parties to obtain valuations. The Husband agreed for this to be done although later according to the Wife's evidence, there was some difficulty caused allegedly by the Husband, in the valuer obtaining access to the properties and/or with arranging payment to the valuer.
The table of real property set out in the Husband's affidavit filed 9 November 2020 has columns showing the husband's value and the wife’s value, the husband's affidavit being filed after the wife's initial affidavit and therefore being able to have reference to the values asserted by the wife. The table is as follows:
Asset Ownership Wife’s value ..
Husband’s value
E(1) Street, Town C Joint $150,000 $150,000 E(2) Street, Town C Joint $150,000 $150,000 E(3) Street, Town C Joint $150,000 $150,000 E(4) Street, Town C Joint $150,000 $150,000 D Street, Town C Joint $250,000 $250,000 B(1), Town C (under renovation) Joint $200,000 $200,000 B(2) Street, Town C "B(2) Street, Town C" Joint $600,000 $600,000 F Street, Suburb G Joint $400,000 $400,000 H Street, Suburb G Joint $80,000 $80,000
The table above shows the value of real estate estimated and/or agreed between the parties and was prior to valuations being carried out. Following the valuation of some of the properties, the amended table of real property is as follows:
Asset Ownership Value E(1) Street, Town C Joint $175,000 E(2) Street, Town C Joint $150,000 E(3) Street, Town C Joint $150,000 E(4) Street, Town C Joint $150,000 D Street, Town C Joint $250,000 B(1), Town C (under renovation) Joint $200,000 B(2) Street - "B(2) Street, Town C" Joint $600,000 F Street, Suburb G Joint $225,000 H Street, Suburb G Joint $65,000
The Husband did not seek to cross-examine the property valuers.
In her trial affidavit filed on 19 April 2021, the Wife refers to additional property including items which have been sold or taken by the Husband and which the wife claims should be included in the relationship property. Those items and their values asserted by the wife and referred to by the Husband in his evidence during the trial are as follows:
Item Action Value / Price Use of funds Motor Vehicle 6 Sold by Husband $4000 Unknown. Husband says payment of rates Motor Vehicle 5 Sold by Husband $3500 / $4000 To Husband’s account Motor Vehicle 4 Sold by Husband $425 Unknown Steel beams Sold by Husband $1000 To joint account controlled by Husband Ivory collection Taken by Husband Unknown Unknown Collectables Taken by Husband Unknown Unknown Some of the above items are discussed in the section “Add-Backs” below.
Of significance in determining the value of their relationship property and how it is to be divided, the Wife says in her trial affidavit filed 19 April 2021 that she does not seek to retain various chattels being personal items and antique furniture, which she had claimed originally. Further, the Wife does not seek to become the owner of two (2) properties at Suburb G outside City R which the Husband proposed to transfer to her. Rather, the Wife seeks two (2) properties at Town C outside Town S, namely B(1), Town C and D Street, Town C. Those properties are valued at $200,000 and $250,000 respectively.
As referred to above in discussing the Husband's response document, the Husband proposes that the Wife receive two (2) pieces of real estate (although not the two (2) properties at Town C referred to in the previous paragraph) and with the Husband retaining the remaining properties and refinancing all of the liabilities of the real estate generally. Those liabilities are Bank K joint loans of $468,051 and $43,571 and a National Australia Bank loan for “B(2) Street, Town C” of $209,587. Those total liabilities are $721,209.
The Husband accepted when giving evidence and being cross-examined by the Wife’s Counsel, that he may not be able to do this. He said that Bank K had refused his finance application. He said that some of the properties may have to be sold.
ORAL EVIDENCE
As I said at the beginning of this judgment, the Husband gave evidence first.
Generally speaking the Husband's evidence was clear. He understood the questions and gave appropriate answers.
The evidence of each of the parties was not as significant as the written evidence in the affidavits. There was not a lot of factual dispute between the parties in the sense of identifying assets and the work which each of them did over the years.
The Husband was defensive in some of his answers. There was an element of self-justification. This is not surprising given that he has been in control of the relationship assets financially and has received the relationship income without sharing it with the Wife. Further, the Husband required the Wife to move out of one of the rooms at B(2) Street, Town C following separation when he remained in the family home.
The Husband's justification for the above-mentioned actions was not reasonable, in my view. Nor was it reasonable to incur greater legal costs for the Wife by failing to give financial disclosure.
Although I do not identify examples of the Husband being untruthful in relation to individual matters, it was certainly the case that during his evidence he was unwilling to give credit to the Wife for her contributions, even those which took place quite some years ago. There was as I have said a, a tone of justifying his recent actions (post-separation) and a sense of entitlement with respect to the assets which the parties now own.
The Wife’s evidence was in my view, given as best she could. The Wife's medical problems were obvious.
The Wife’s answers to questions from the Husband were to the point and appeared to be truthful. The Wife readily conceded for example, that she did take items from B(2) Street, Town C. The Husband took the Wife through a considerable list of Chattel items and with respect to most of them, the Wife answered “yes” when asked whether she took them.
There was not a lot of factual conflict between the evidence of the parties. Where there was conflict, generally I prefer the evidence of the Wife.
THE HUSBAND’S BEHAVIOUR
I have referred above to the Husband’s unreasonable behaviour in not allowing the Wife to reside in one of the jointly owned properties whereas he has had the benefit since separation in 2019, of residing in the jointly owned family home. The Wife gives evidence of the Wife requiring her and her daughter to move from ‘B(2) Street, Town C’. She and her daughter then have then had to rent privately.
This was not the only unfair and unnecessary action by the Husband. Despite the Court ordering that assets be valued at the parties’ joint cost, the Husband threatened to complain that the Wife was guilty of fraud when she paid for a valuation from the joint account. The Wife then had to borrow money and pay for other valuations separately.
The Husband did not comply with orders and directions about trial documents. None were filed.
The Husband did not give financial disclosure. The Wife had to piece together information obtained by subpoena to the Husband’s banks and had to pay for her solicitor’s substantial work to consider the material returned following the subpoena.
The Husband made no effort at all to provide financial documents. He “authorised” his accountant to answer queries and request from the Wife and her solicitor – all at the Wife’s cost.
The Husband’s attitude to the Wife’s reasonable property claim and to the litigation generally can be seen clearly from emails sent by him to the Wife’s solicitor. Examples which annexed to the Wife’s trial affidavit include the following:
42.1Email from Husband to Wife’s solicitor 2 December 2020, regarding the Wife (correctly) using joint funds to pay for a property valuation:
Will be filing fruid (fraud) case against your client this morning withdrawing funds from account
42.2Email from Husband to Wife 6 April 2020, when Wife asked where she could have accommodation:
All properties are going on the market, this is your wish / doing, try the caravan park
42.3Email from Husband to Wife around 5 January 2021:
If you contact any of the tenants without my knowledge I will have you in court. You do not own F Street, Suburb G so I suggest you stop telling people you do and I will be having every person you now fronting in court plus lots more info about you and your daughter in front of the courts if you make contact or speak to people about this matter
42.4Email from Husband to Wife’s solicitor 3 December 2020:
Still waiting for your client’s money to be transferred into account for rates on City R properties. If this is not paid I will be asking the courts for orders to have this done as Ms Dengate and your employee have assets that can be sold. I have never owed money in my life until Ms Dengate walked out asking for nothing then stealing and causing a great deal of stress to me. This I wish to be addressed ASAP 48 hours. Also Mr Firth goods stolen have not been returned, this has been brought to your attention but again your refuse to answer this question.
42.5Email from Husband to Wife’s solicitor 10 April 2021:
Mr Firth again tell your client that if she thinks she is going to STEAL my life’s work away from me whilst sitting on her lazy ass it is not going to happen. Tell your client that the goods at Suburb G from her business and goods that have been removed from the said property be returned and she sells them at a price that is acceptable to me and all goods as in air-con units be returned to the property that have been removed, fridges, car mascot collection, chairs, stereo equipment plus all other items that have not been listed. If you think for one second Mr Firth that your client / employee is going to steal my life’s work from me without doing any work you are wrong. Thinking she can walk out and expect a bucket load of cash for causing me stress in my life, wrong again. Also Mr Firth if you want full disclosure of mine belonging when will you be disclosing your costs plus all Ms Dengate’s eg Westpack accounts and money that has been received from her selling off goods.
42.6Email from Husband to the Wife’s solicitor 22 December 2020
Mr Firth I have spoken to the courts and have been advised that I am within my rights to ask that all my email address is not available. Mail can be my choice and if that is at your client’s expense because your employee and client removed this equipment from B(2) Street, Town C as in theft, I really do not give a shit if it is going to cost her more expense as she is costing me a great deal more.
In quoting emails from the Husband in the previous paragraph I have corrected spelling and grammar and in some cases I have not quoted the whole email. Not all emails from the Husband have been quoted. Where the whole of an email has not been quoted, the whole document does not have a different effect nor a different meaning from what has been quoted.
ADD-BACKS
The Wife in her affidavit and case outline seeks that various payments or the value of items retained by the Husband, be added back to the pool of relationship property.
I find that the items referred to in paragraph 24 are relationship property. Accordingly their value should be taken into account.
I clarified with the Husband and he confirmed that he understood following my comments, that the gross value of the payments or values would be added to the value of the relationship property. The relationship property would then be divided between the parties. It was not as the Husband first thought, that he was being asked to pay 100% of the money or values of the items described in paragraph 24. To the extent that I make a finding about this matter, the dollar figures would be added to the total value of relationship property and then divided in the percentages I decide.
My decision has been made easier by the Husband conceding in cross-examination that the relevant amounts should be added back.
I had a concern that add-backs may not be appropriate following the decision of the High Court in Stanford & Stanford [2012] HCA 52. A view following that decision is that what are generally known as add-backs would now be considered as a contribution (positive or negative) by each party or under Section 75 (2)(o).
However, the Full Court in Bevan & Bevan [2013] FamCAFC 116, has in my view left it open for add-backs to be considered. This is what I intend to do with the monetary amounts and values referred to in the following paragraph, some of which have been referred to in paragraph 24 and have been conceded by the Husband as being received and/or retained by him.
The full list of items to be considered and the values I have placed on them given the state of the evidence, is as follows:
50.1Motor Vehicle 6 car - $4,000
50.2Motor Vehicle 5 - $3,500
50.3Motor Vehicle 4 - $425
50.4Steel beams - $1,000
50.5Ivory collection – no value available
50.6Antique collectables – no value available
50.7$849 the Wife received from Super Fund L
50.8$2640 being the cost of the chattel valuation paid by Wife
50.9$770 being the cost of the E(1) Street, Town C valuation
50.10$6800 paid by the Husband to his former solicitors, effectively from joint funds
Where there was dispute or confusion about the value or payment the Husband received, for example whether the Motor Vehicle 5 was sold by him for $4000 or $3500, I have used the lower amount. Where the payment or value received by the Husband is unknown for example the ivory collection and the antique collectables, I have not included any amount as an add-back. This is not to say that I have ignored such matters in assessing the division of relationship property between the parties.
THE WIFE’S HEALTH
In paragraph 71 her trial Affidavit filed 19 April 2021 the Wife says:
“I am 60 years of age and have been suffering from poor health for a number of years now. I was diagnosed with cancer in 2009 and underwent surgery to remove part of my organs. I have been diagnosed with a medical condition and as a result of my medical issues I struggle to retain my breath at times which meant that I fatigue quite easily and as a result, I have not worked for some time.”
Paragraph 71 of the Wife’s trial affidavit has Annexure A which is a report from the Town S District Heath Care dated 20 April 2020. That report says, combining the last three (3) of its four (4) paragraphs:
“Ms Dengate is seen regularly at the U Hospital Clinic regarding her very severe disease. Ms Dengate’s organ function remains stable but limited. Functionally it means her exercise tolerance is very limited. Ms Dengate also had cancer diagnosed in 2009 necessitating surgery. This also contributed to her limited exercise tolerance. I can confirm that Ms Dengate did have an infective exacerbation of her medical condition and has been admitted to the hospital on a number of occasions. On at least one of them she required medical support.”
The letter is signed by Dr V of Town S Health Care.
In paragraph 72 of her trial affidavit the Wife says:
“I was again hospitalised last week on 12 April 2021 as my condition deteriorated. My oxygen levels were low and I had an injection. I was placed on intravenous antibiotics and was discharged on 16 April 2021. I was advised that my medical condition has deteriorated further and I am now being referred back to the specialist Dr W.”
I appreciate that the Wife is not medically trained and that the above quoted paragraph contains hearsay. I accept the general effect of that paragraph.
In paragraph 73 of her trial affidavit, the Wife says:
“I do not foresee being able to secure gainful employment into the future.”
The Wife appeared in court in a wheelchair and was wearing a mask attached to a breathing machine.
The Husband in his only affidavit filed on 9 November 2020 says (paragraph 69 and 70 combined) as follows:
“Ms Dengate is 60 years of age and also has limited ability to earn income from employment. Ms Dengate is in poor health due to her medical condition.”
I find that the Wife would be most unlikely to obtain gainful employment in the future.
Because the Husband has had control of the relationship property and its income, the Wife has been supporting herself from Centrelink payments including JobSeeker.
The Wife will have future needs including possible medical bills. This is relevant under Section 75 (2). In his closing submissions, Counsel for the Wife advised that one of the reasons the wife is seeking to have transferred to her the properties at B(1) Street, Town C and D Street, Town C, is that they will provide a place for the Wife to live and an income stream, given that each of these blocks has a house on it.
To the extent that the Husband would point to his own needs in the future, I recognise that he is 66 years old and will not be able to do the hard physical work of house removal and renovation indefinitely. I am satisfied that the division of the relationship property will provide each party with a home and assets which will provide capital and income for his and her support.
NEGATIVE CONTRIBUTION BY PARTIES?
The Wife says at paragraphs 9 and 10 of her trial affidavit that the parties had to hand their first property at X Street, Suburb Y, City R over to the bank, because of (high) interest rates in the 1980’s. Neither party should be blamed for this.
The Wife says at paragraph 15 of her trial affidavit that the Husband started gambling “quite heavily” after the casino opened in City R. There is not sufficient evidence to make any adjustment against the Husband and this occurred many years ago.
The Wife says at paragraphs 13 and 17 of her trial affidavit that the parties bought a business in City R and that the Husband closed it after an unspecified time. There is not sufficient evidence to make any adjustment against the Husband regarding that matter.
There was evidence and in the cross-examination of the Husband it was put to him by reference to bank statements, that the Husband has been making payments which could be related to on-line gambling and/or dating sites. That evidence was somewhat confused. There is not sufficient evidence to make any adjustment against the Husband regarding that matter.
The Husband complained that the Wife took a substantial amount of items from the accommodation property knows as “B(2) Street, Town C” at Town C, which he manages and which the parties own jointly. He said that the extent of the Wife taking furniture and other items meant that her actions affected the profitability of this business and caused him considerable delays and additional work.
The Wife did admit in the cross-examination that she did take various items from the F Street, Suburb G, City R property and “B(2) Street, Town C” property. The items taken included a lawn mower, blower, money (amount unknown), beds, linen, microwave, shelves, a side board, sofa, mobile phone and stereo equipment. The Wife taking those items may be seen as a negative contribution by her. However, I take into account:
69.1The items taken by the Wife were jointly owned;
69.2The Wife had to move to rented accommodation and needed to “set herself up” in that accommodation, with furniture;
69.3The Husband required the Wife to move out of the room at “B(2) Street, Town C” where she had moved following separation, notwithstanding that this property is jointly owned;
69.4The Husband remained living in the jointly owned family home with all of the furniture and other items remaining there;
69.5The value of the items taken by the Wife in particular on a second hand basis, would be nominal by comparison with the value of all of the parties’ property;
69.6The Husband received and retained all of the income from the parties’ various rental properties.
In the above circumstances, no adjustment against the Wife will be made.
LINE OF CREDIT
The Wife says at paragraph 124 of her trial affidavit that the Husband stopped paying the home loan relating to the E(1) Street, Town C family home on 26 April 2020. The monthly payment was $386.14. I calculate that for the thirteen (13) months from May last year until and including May this year, the Husband should have paid the bank if the Wife’s evidence is correct, approximately $5,020. The Wife says that a Bank K loan with a debit balance of approximately $471,000, is secured over the properties at E(1) Street, Town C, E(2) Street, Town C, E(3) Street, Town C and E(4) Street, Town C. It is not clear whether the $386.14 per month loan payment is the only amount repayable per month for the whole of this loan.
In any event, the Wife says at paragraph 172 of her trial affidavit that the Husband has paid expenses from the Bank K loan account ending …90 which is a line of credit, including for the E(1) Street, Town C loan. Although there is some confusion in referring to the E(1) Street, Town C loan specifically and also referring to the Bank K loan ending …90 as being secured over four (4) properties in E Street, Town C as referred to above, there should be no practical difficulty given that my order will include that the Husband refinance in his sole name and/or be liable for, the whole of the parties’ loans. This means that if in some way the Husband has taken money from the line of credit or some other loan account to pay the housing loan for the E(1) Street, Town C home, he will now be liable for the refinancing and/or repayment of the line of credit.
CONTRIBUTIONS
As referred to above, the main statutory provisions relevant to this case are Sections 90SF(3) and 90SM(4) of the Family Law Act, concerning the assessment of contributions in various forms and of the matters set out in Section 90SF(3) with respect to considering the need for each party to support themselves and to have some benefit from the relationship assets. Section 90SB requires the court to consider whether a party has made a substantial contribution as set out in section 90SM(4)(a)(b), or (c). Section 90ST requires the court as far as practicable, to end the financial relationship between the couple.
In this matter I find that over a period of 36 years, each of the parties has made a substantial contribution to the acquisition, conservation and improvement of and to the relationship property.
Also as referred to in this judgement previously, I consider that it is just and equitable to make an order for property settlement. I have had regard to the decision of the High Court in Stanford in that regard.
In this case the Wife’s position is that the parties together built up the assets which they have now. The Wife says at paragraph 6 of her trial affidavit:
When Mr Kettering and I commenced our relationship in 1983, we had no significant assets to speak of. The assets that we have built up during our relationship have been a joint effort.
I note that in the Husband's Response document which is Exhibit 2 and which is the “agreed or not agreed” document referred to in paragraphs 5 and 8 of this judgment, the Husband has agreed with paragraph 6 of the Wife's trial affidavit.
It is clear that the Husband has worked hard for many years during the relationship. He has had various jobs. He has with the Wife, purchased and renovated houses. In more recent years this has been his main occupation as well as operating “B(2) Street, Town C” accommodation business at Town C near Town S.
I find that the Wife has also worked hard. The work the Wife did is referred to in her trial affidavit as follows:
78.1At paragraph 68 the Wife says:
I was responsible for the vast majority of the household chores. I cleaned the house and bathroom, swept, mopped and vacuumed, washed our clothes and despite Mr Kettering being a tradesman, I still did all the cooking. It was very rare indeed for Mr Kettering to do any “inside chores”
78.2At paragraph 69 the Wife says:
Mr Kettering did mow the lawn most times particularly with the ride on mower but on occasions particularly at F Street, Suburb G, I would mow around the house. I always maintain the gardens though this was something that I loved to do.
The Wife's daughter Ms T lived with the parties until she was about 16 years old. The Wife says at paragraph 70 of her trial affidavit that she (the Wife) attended to all or virtually all of Ms T’s care and needs.
With respect to the Wife's broader contributions, she says in a trial affidavit:
80.1At paragraph 19 the Wife says that after the Husband bought a house at Z Street, City R in 1991, she was working occasionally and was able to renovate the house. This included opening up the veranda, sanding the interior ceiling and walls and painting the entire interior. The Husband painted the exterior.
80.2The Wife operated a small business called “AA” for about 3 years.
80.3The parties opened a larger business called “”BB”” in City R, with the Wife running the day to day operations and the Husband locating stock –paragraphs 27 and 28 of the Wife’s trial affidavit.
80.4In relation to one of the relocated houses namely at E(2) Street, Town C, the Wife says that paragraph 37:
I prepared the walls and ceiling for painting by sanding and no more gapping as needed. I then painted the entire interior of the property. I also painted underneath the back veranda and the exterior of the house was then cladded.
80.5The Wife says at paragraph 38:
I made the curtains for the windows and painted the kitchen cupboards. I also purchased from garage sales and second-hand shops the day to day items for use in the house such as pots and pans, plates and cutlery as the property was intended to be used as a holiday rental.
80.6The Wife says at paragraph 43:
With the properties at E(1) Street, Town C and E(2) Street, Town C once they were relocated onto the blocks, I did a lot of the physical work myself as Mr Kettering was working in City R.
80.7The Wife says at paragraph 44:
At E(1) Street, Town C I again prepared the interior for painting, sanding all walls and ceilings and then painted the interior. I assisted a carpenter with the installation of the kitchen that we bought second hand.
80.8The Wife says at paragraph 55:
A house which was relocated to land at E(4) Street, Town C did not need as much work as the other houses which had been moved. I helped with cleaning the property and assisted in decorating the interior by buying curtains. I did the landscaping.
An affidavit by Mr M was filed on behalf of the Wife on 19 April 2021. Mr M and his Wife became friendly with the Husband and Wife in these proceedings. Mr M says in his affidavit that as he was retired, he would volunteer his time to help the Husband and Wife with the work they were doing on the houses that had been relocated onto their land. Mr M was not paid.
In relation to the Wife’s work, Mr M says at paragraph 8 of his affidavit:
Ms Dengate was there all the time and she did a hell of a lot of work on the properties. She would organise things like the curtains and would drive to City R to purchase them and put them up, she bought the flatpack kitchen that she and I then installed in one of the houses. She was doing the painting inside the properties and generally cleaning them up.
Mr M says at paragraph 9:
In addition to this she (the Wife) was running the household, cooking meals and looking after their home. When they were both working on the houses she would duck home at lunchtime and bring back lunch for Mr Kettering.
Mr M says at paragraph 11:
I recall that quite often with E(1) Street, Town C and E(2) Street, Town C, Ms Dengate was working on the properties by herself as Mr Kettering couldn’t be there.
Mr M says at paragraph 12:
On the other properties on E Street further down the road I recall that Mr Kettering and Ms Dengate were both there during the time the work was being done them.
Finally, Mr M says at paragraph 14:
Both Mr Kettering and Ms Dengate worked hard to establish the properties they have in E Street.
The Husband did not file any evidence contrary to the trial affidavit of the Wife nor contrary to Mr M’s affidavit. The Husband advised that he did not wish to cross-examine Mr M.
In all of the circumstances and taking into account all of the available evidence, I find that the contributions by the Husband and the Wife were equal.
To the extent that in his response filed 9 November 2020 the Husband seeks a ten (10) percent property adjustment in his favour so as to result in a sixty (60) percent / forty (40) percent division in his favour overall, I do not agree that such a result would be fair or reasonable. I have found that the contributions of the parties have been equal. The Wife may have a greater need going forward because of her medical conditions. My view is that the assets each party will receive will enable him and her to support themselves in the future. In saying this I have taken into account that the Husband is five (5) years older than the Wife. Although he is in better health, there must be some limit at the age of sixty-six (66) now, to the time he can work physically on renovating houses.
With respect to the likelihood that the Husband will not actively engage in the relocation and renovation of houses in the future, I note that he has not done this for the last few years. The larger assets of the parties being the nine (9) real properties are essentially the same now as they were at separation in 2019. I find that this is significant. The Husband indicated in his evidence that he will most likely continue to operate ‘B(2) Street, Town C’ at Town C and depending on his finances, perhaps rent out one or two of the other houses.
RELEVAN LAW / CASES
In considering contributions, Justice Coleman said in Steinbrenner & Steinbrenner [2008] FamCAFC 193:
Given that the evaluation of contribution based entitlements inevitably moves from qualitative evaluation of contributions to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion, whether it be in the assessment of contributions in the matrimonial cause, assessment of damages in a personal injuries case or determination of compensation in a land resumption case.
Having considered the contributions of these parties as being equal, it is necessary to reflect that evaluation in figures, thus dividing the relationship property between the parties.
The Full Court said in Hoffman & Hoffman [2014] FamCAFC 92 that the jurisprudence about a party contributing or making a particular type of contribution relating to “special skills” or “special talents” is settled. The view of the Full Court is that always or mostly always, that settled view is in the negative. The Court said:
In each case, we consider that the point being made is that there is no principle or guideline (or indeed anything else emerging from Section 79) that renders the direct contribution of income or capital more important – or “special” – when compared against indirect contributions and in particular, contributions to the home or the welfare of the family.
More recently in the case of Fields & Smith [2015] FamCAFC 57 the Full Court consisting of Chief Justice Bryant and Justices May and Ainslie-Wallace, said:
If it is necessary to make the point again and to highlight it for the purpose of this appeal, we add our endorsement to what has been made clear in the authorities referred to and to the Full Court’s comments in Hoffman, that the words of Section 79 do not provide endorsement for any category of contribution relating to any class of property (for example, high wealth) being by virtue of that category or class, more valuable or important than another. In each case the contributions made by the parties must be evaluated in the context of the facts particular to that case.
I note that in Fields v Smith where the Full Court repeated and emphasised the “no category of contribution related to any class of property” position, in that case the parties had an asset pool of between $32 million and $39 million, far more than the Husband and the Wife here. Notwithstanding this and notwithstanding Mr Fields claiming a significant contribution adjustment, the Full Court decided that there should be an equal division of property.
Further in Fields v Smith, the Full Court noted that the assets in question (the matrimonial property) were essentially the same at time of hearing as they were at separation. This is the same for these parties, their ownership of the two (2) Suburb G properties and seven (7) Town C properties jointly, has not changed.
Taking into account the relevant legislation, my findings about the contributions of the parties and considering relevant cases, I will divide the relationship property equally between the parties.
Should I be incorrect in not making a property adjustment in favour of the Husband because of his alleged greater contribution being his work to relocate and renovate houses or should the Husband point to the support of the Wife’s daughter Ms T within the household up to Ms T’s teenage years, I find that there is no justification for any adjustment to the Husband because:
98.1Each of the parties received an approximately equal inheritance from their Mother. The Wife deposes in her trial affidavit that she received $61,611 in late 2010. The Husband received around $68,000 in 2018. Considering the value of money over time, these inheritances would have an approximately equal value.
98.2The Wife received a much greater inheritance namely $125,155, from her Father in 2013. She deposes at paragraph 59 of her trial affidavit that this enabled the parties to purchase the house which was relocated to the E(3) Street, Town C property, to purchase a separate block of land at CC Street, Town C and to purchase and relocate a house to that land.
Although it is accepted that the Wife has not worked in a physical sense for about ten (10) years, the case of Fields v Smith referred to in this judgment, makes it clear that the whole of a party’s contributions over the period of the relationship (in this case 36 years) should be taken into account. Contributions by each party change, including for example when children leave home. This is not to say that in this case where a party’s financial contributions may have been less in recent years but where jointly owned assets continue to bring in the parties’ income, there should be any diminution to the entitlements of each party.
DIVISION OF PROPERTY
I have set out the division of property in the Order at the commencement of this judgment. This includes:
100.1The Wife receiving two (2) pieces of real estate, namely B(1), Town C and D Street, Town C, valued at $200,000 and $250,000 respectively and unencumbered.
100.2The Husband retaining the other seven (7) pieces of real property which he may sell or retain.
100.3The Husband paying the secured liabilities.
100.4The Wife retaining certain chattels and the Husband retaining the rest.
100.5An equal division of the balance of the relationship property which will include a payment to the Wife so as to make up a 50% division for her overall. This allows the Husband to retain the other real estate or sell it, as contemplated in paragraphs 2-5 of the proposed Order.
In the formula for division of the relationship property, I have included some add-backs where there was available evidence but not otherwise. I have included valuation costs paid by the Wife, so that when the total pool in paragraph 13 of the order is divided equally, the Wife will be compensated for 50% of those costs.
To the extent that I have not apportioned against the Wife the value of all chattels in paragraph 10 of the order whereas I have apportioned against the Husband the value of some chattels in the calculation in paragraph 13 of the order, I have done this because:
102.1The Husband has had the benefit of remaining in the former family home without contributing to accommodation costs except that expenses such as rates and insurance may have been paid.
102.2The Husband rather unfairly, demanded that the Wife not reside in relationship property “B(2) Street, Town C”.
102.3The Husband has had the benefit of income from all of the relationship property including rental properties, subject to necessary recurring payments.
102.4In addition to the Husband receiving rental income, he has received income from ‘Jobkeeper’.
102.5The Husband has retained items whose value has not been able to be identified.
102.6The Husband said in his evidence that he considers the value of the antiques and collectables at the F Street, Suburb G property to be much greater than the formal valuation. For example he says the Vintage Motor Vehicle 3 is worth at least $10,000 not $2,000 (Order 13.2.13). Pursuant to Order 11, the Husband will retain all of those antiques and collectables.
102.7I refer to my comments in paragraph 69.
I certify that the preceding one hundred and two (102) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Bowrey.
Associate:
Dated: 8 June 2021
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Property Law
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