DH & RM - [2004] FMCAfam 74

FEDERAL MAGISTRATES COURT OF AUSTRALIA

DH & RM

[2004] FMCAfam 74

FAMILY LAW – PROPERTY – Short marriage – parties cohabit for six months – analysis of contributions – asset by asset approach applied and cross-checked by using global approach.

Family Law Act 1975
Child Support (Assessment) Act 1989

Lee Steere and Lee Steere (1985) FLC 91-626
Ferraro and Ferraro (1993) FLC 92-335
Clauson and Clauson (1995) FLC 92-595
Russell and Russell (1999) FLC 92-877
Tuck and Tuck (1981) FLC 91-02
McMahon and McMahon (1995) FLC 92-606
Norbis and Norbis (1986) 161 CLR 513
Zyk and Zyk (1995) FLC 92-644
Quinn and Quinn (1979) FLC 90-677
Parshen (1996) FLC 92-720

Applicant:

D N H

Respondent:

R M

File No:

SYM90 of 2004

Delivered on:

19 March 2004

Delivered at:

Wollongong

Hearing dates:

18 & 19 February 2004

Judgment of:

Ryan FM

REPRESENTATION

Counsel for the Applicant:

Mr R. Maurice

Solicitors for the Applicant:

Kerry Johnson & Associates

Solicitor Advocate for the Respondent:

Mr J. David

Solicitors for the Respondent:

Hansons

ORDERS

Within eight (8) weeks of the date of these orders the wife shall pay to the husband the sum of $24,409 (minus any adjustment provided for in these orders).
In the event the husband is liable to repay any part of the mortgage at the same time as the wife makes the payment pursuant to Order 1, she shall provide him with a discharge of the Westpac mortgage secured against the Wollongong property or a release from the mortgagee of his liability pursuant to it.
Simultaneously, upon compliance by the wife with Order 1, the husband shall vacate the Wollongong property.
Pending compliance with Order 1, the husband shall keep the property in good repair and shall continue to pay, as and when they fall due, all regular instalments in respect of the mortgage, council rates, water rates, household insurance and strata levies in respect of the Wollongong property and shall indemnify and keep indemnified the wife in respect of any such amounts. If any such amounts remains unpaid as at the date of compliance with Order 1, the wife shall be entitled to deduct from the monies due to the husband pursuant to these orders the amount outstanding (including any penalties and interest that have accrued).
Within fourteen (14) days the husband shall make available to the wife for collection at her expense all items identified in annexure B to the wife’s affidavit sworn 4 February 2004.
In the event that the husband fails to make any of these items available he shall pay her the face value of comparable items. The face value shall be the selling price at Myer Wollongong store. Any adjustment pursuant to this order shall be deducted from the payment ordered pursuant to Order 1.
Within fourteen (14) days the husband shall make available for collection by the wife those items comprising annexure D to the wife’s affidavit sworn 4 February 2004 given by the wife’s family and friends as wedding gifts. The husband shall give the wife a copy of the Grace Bros Bridal Register within seven (7) days which identifies those items that the husband asserts came from his family or friends. The wife shall identify those items that she contends were given by members of her family. In the event that the parties disagree about the provenance of wedding gifts the husband shall prepare two lists of the contentious items of equal value. The wife will then select the list of items that she will have, which items shall thereafter become her property. The husband shall give the wife those items to which she is entitled pursuant to these orders no later than twenty eight (28) days from this day. In the event that the husband fails to make any of these items available he shall pay her the face value of comparable items. The face value shall be the selling price at Myer Wollongong store. Any adjustment pursuant to this order shall be deducted from the payment ordered pursuant to Order 1.
This Court certifies under s.128 of the Evidence Act 1995 of the Commonwealth that part of the evidence given in these proceedings by D N H, a record of which is attached to the s.128 certificate, is evidence to which subsection 128(7) of that Act applies.
This Court refers the husband to the Attorney Generals Department for consideration of whether he breached laws of the Commonwealth, particularly in relation to taxation and Centrelink benefits.
This Court refers the wife to the Attorney General’s Department for consideration of whether she has breached laws of the Commonwealth, particularly in relation to taxation.
All exhibits tendered in these proceedings are to be returned at the expiration of one (1) calender month unless an appeal is lodged.
The solicitor who issued any subpoena shall collect that subpoenaed material and return it to the owner within seven (7) days.
All outstanding applications are dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
WOLLONGONG

SYM90 of 2004

D N H

Applicant

And

R M

Respondent

REASONS FOR JUDGMENT

The proceedings

These are proceedings for the adjustment of property pursuant to

s.79 of the Family Law Act 1975.

The application

D N H (“the husband”) filed an application for final orders in the Family Court of Australia on 11 July 2003. After a conciliation conference, the proceedings were transferred to the Federal Magistrates Court of Australia. At the start of the hearing the husband’s counsel tendered a minute of order[1] that sets out the orders sought at the hearing. In essence, the orders sought are:
·That the wife transfers to the husband home unit known as the Wollongong property.
·That the husband pay the wife $30,000 and re-finance the mortgage attached to the home unit so that the wife has no liability for it.
·That the wife delivers to the husband pieces of furniture and personalty.
[1] Exhibit A
R M (“the wife”) filed a response on 15 September 2003. At the commencement of the hearing her solicitor identified the orders sought by his client. Essentially they are as follows:
·That within fourteen days the husband pays to the wife $2,192.
·That the husband delivers to her a series of furniture and personalty.

Short history

The husband is 27 years old.
The wife is 22 years old.
On 22 February 2002 the parties purchased the Wollongong property in the wife’s name.
The parties married on 12 October 2002. They did not cohabit prior to their marriage.
The parties separated on 8 April 2003. At separation the wife returned to reside with her parents and the husband remained living at the Wollongong property.
There are no children of the marriage.
The marriage still subsists.

The issues

The primary issues are these:
·Whether the parties’ contributions should be evaluated using a global or asset by asset approach.
·Whether the wife made an indirect contribution to the husband’s property, “the Balgownie property”.
·The source of funds for improvements to the Wollongong property.
·Whether a series of liabilities claimed by the husband should be taken into account.
·Which of the parties has the wedding gifts and furniture.

Credit

The wife’s solicitor contended that this is one of those unusual matters in which the court would uniformly accept the evidence of one party in preference to the other. The husband contended that in a number of material respects both parties’ evidence was unsatisfactory. Not as a consequence of inadvertence or anxiety, but rather because both deliberately attempted to mislead the court. Both parties impressed me as having at least average, probably above average, intelligence. I do not accept that important anomalies in oral and written evidence and within oral testimony on significant matters were mistakes.
For example, the wife was adamant that prior to establishing a National Australia Bank account she had never had a bank account. Later, she conceded that she had an earlier ANZ bank account. She claimed to be paying rent to her father of $100 per week. Her father denied that he received money from her. The wife denied receiving rent from the Wollongong property, yet in an affidavit sworn 15 September 2003 she said, “Before marriage I rented the property out and applied the income towards the mortgage repayments”. In her affidavit sworn

4 February 2004 the wife said, “Annexed hereto and marked with the letter “B” is a list of the items, which I took at the time. The items on the list were owned by me before marriage”. Having received the husband’s affidavit, which has attached to it, their Grace Bros bridal register, the wife retracted the claim made in her affidavit in relation to most of the items. This is because those items are clearly indicated as wedding gifts acquired via the bridal register.
The inconsistencies in the husband’s evidence were numerous. For example, at paragraph 8 of his affidavit sworn 10 February 2003 the husband said:
“In May 1999 my brother and I had purchased [the Balgownie property] as tenants in common in equal shares. The purchase price was $145,000. My brother and I obtained a mortgage of $60,000 from Westpac. My brother already had savings for his half share of the balance. My father lent me $65,000 for my half share. I have not yet repaid my father that amount”.
Half of the balance is $43,000. Thus, the husband was unable to clarify why he needed $65,000 as his half share. The husband failed to disclose that his income earned as a security guard, for which he received $350 each week, was not declared to the Australian Taxation Office. The husband claimed to have paid from his savings or income major payments for which he could provide no documentary evidence. By comparison, the wife demonstrated matching transactions. That is, withdrawals from her bank account from one account and payments to another on the same day. Evidencing, in effect, direct deduction and immediate payment. For example, $3,500 withdrawn from her account on 2 September 2002 then paid on 3 September 2002 to Creative Holidays; withdrawal from her account of $400 the same day that the parties deposited $1,000 to open a joint account. The husband had claimed that he alone deposited the $1,000. The husband failed to disclose that after separation he withdrew $4,000 on 22 May 2003 from the parties’ joint account, leaving only $208.09.
Because there are deficiencies in both parties’ evidence I am not satisfied that I should make the global credit findings contended by the wife’s solicitor. Rather, the relevant factual circumstances will be evaluated having regard to the totality of the evidence concerning the issue.

Chronology of relevant events

Prior to the commencement of cohabitation each party had assets which they subsequently brought into the marriage.
In May 1999 the husband and his brother purchased the Balgownie property. The husband’s father corroborated his claim that he loaned $65,000, which was applied towards the acquisition of the property. He had previously loaned the husband $80,000 which he used to establish a mixed business. The business was sold in 1997 and the husband repaid his parents in full. The effect of his father’s evidence was that he helped his sons when able to. The husband and his father did not complete loan documents for the putative $65,000 loan. Nor is there any suggestion that loan documents were completed for the earlier $80,000 loan. I am satisfied that the husband and his father conduct large financial transactions without formally documenting their terms. Hence, that the absence of loan documents does not detract from the claim that the loan was made. The husband’s father has not yet demanded repayment of the loan and I accept his evidence that he will be repaid when the property is sold.
After Balgownie was purchased the husband conducted repairs to the guttering, painted the home and it was then tenanted. The property was rented for $160 per week continuously until October 2003. The rent was applied to the mortgage. All income received has been paid on the mortgage.
It was necessary for the husband to borrow the money for the purchase of Balgownie because he did not have any savings. Until the husband started work in July 2002 he worked three evenings a week as a security guard, casually as a tiler with the wife’s father and for twelve months was in receipt of government financial assistance whilst completing trade qualifications for certification as a plumber. During this twelve months he established a tiling business. Between May 1999 and September 2002 the husband claims that he saved $30,000, which monies were kept at home in a safe. The wife agrees that he had cash stored at home but does not know how much he had. Throughout the period he worked three nights a week as a security guard receiving undeclared income.
The parties commenced their relationship in October 1999.
The wife completed Year 12 at the end of 2000 and immediately obtained employment in a real estate office. She worked in the real estate agency until July 2001 when she obtained employment as a client service officer with a government department in Sydney.
The parties became engaged on 12 July 2001. Until she started working with the government department the wife was paid cash, which was income she did not declare to the Australian Taxation Office. She had worked since she was 14 years old, initially in a chicken shop and then in the real estate agency. She had about $19,000 cash savings. These savings were used to open a National Australia Bank account in her sole name in July 2001. By 1 December 2001 the account had a balance of $10,221. 67[2].
[2] Exhibit J.
In February 2002 the wife purchased the Wollongong property. The wife contends that buying the unit was her initiative and that basically the husband refused to have anything to do with it. This is the reason, she says, that the unit was acquired in her sole name. In her affidavit the wife says:
“I started looking around for a property to buy. I spoke with my father about a suitable property. I had money for a deposit from my savings. I had been able to save because I had been working for quite a long time. I raised the subject again with DH but he got a bit upset saying, ‘look I’ve made this clear. I’m not helping you with any house payments – I’ve got my own mortgage. If you want to buy a place go ahead.”
The husband contends that the parties originally intended that the unit would be acquired in joint names. Having visited a number of real estate agencies he located the unit in November 2001. The property was originally listed at $125,000 and he negotiated the purchase at $114,000. The wife’s father corroborated that the husband was actively involved in the search for a property and later retained the solicitor.
Because the husband already had an interest in a property he was ineligible for a first homebuyers grant. I accept his evidence that the parties then agreed that the purchase would be completed in the wife’s sole name. This is corroborated by the alteration to the contract for sale of land[3]. I am also satisfied that the husband conducted the dealings with the solicitors on the purchase of the land and also completed the arrangements for finance on the wife’s behalf. A small non-financial contribution.
[3] Exhibit A, husband’s affidavit
The purchase price of the unit was $114,000. The wife drew two bank cheques, one for $6,000 and one for $5,000 adding $400 cash from her savings to complete the 10 per cent deposit for the unit. The parties borrowed $91,000 from Westpac, received $7,000 from the First Home Buyers Scheme and the wife paid the balance at settlement. In his affidavit the husband said, “I then paid all legal costs associated with the purchase of the unit”. During cross-examination he agreed that the wife had paid the legal and associated costs, which amounted to $2,299.75. Settlement took place on 22 February 2002.
Shortly after the purchase of the home unit was completed, the wife paid $6,000 from her savings towards the Westpac housing loan. The mortgage was reduced to $85,000.
Upon settlement the husband advertised the unit for rent in the Illawarra Mercury, paying the costs from his savings. The advertising costs are unlikely to have been more than about $50-$100. This is the first financial contribution made by the husband towards the unit. He arranged for the preparation of a lease and its execution. The property was rented at $150 per week, which monies the husband collected weekly from the tenant. He says, “I then gave the funds to the wife”. The wife’s position at the hearing was that they agreed to use the rent to pay for renovations and did so. She contended that because the husband collected the rent he kept the cash in his safe at his home. It was the wife’s contention that the property was rented for $160, not $150 per week. The latter is the correct rental. Her solicitor submitted that this suggests that the wife had little to do with the tenancy and that it is probable that her account of the disposition of rent is correct. He also contends that the wife’s failure to disclose this income to the Australian Taxation Office is corroborative of her position.
I have found resolving this factual dispute difficult. The difficulty emanates from the wife’s previously sworn evidence that she used the rent to pay the mortgage. Her earlier testimony accords with the husband’s evidence. On the balance of probabilities I accept the husband’s account and the wife’s original testimony. The significance of this is that although the wife paid the mortgage, rates and strata levies the vast majority was derived from rental income rather than her salary. It also negates her claim that some of the later expenses paid for by the husband were sourced from rental income.
At the end of the six months tenancy the parties terminated the lease. From the end of August and until their marriage in mid-October 2002 the parties completed substantial renovations to the unit. The husband had obtained employment at a metal manufacturing company in July 2002. He worked twelve-hour shifts, two-day shifts, followed by two night shifts and then had four days off. The wife worked in Sydney, leaving at approximately 6.30 am and returning at 6.30 pm. Because she was away from Wollongong, the husband made the arrangements for the renovations. The renovations included the removal and installation of a new kitchen, removal and installation of a new bathroom, pulling out the carpets, sanding and polishing floorboards, rewiring, painting the entire unit, affixing security grills, new doors and skirting boards, a new built in wardrobe and new doors to another wardrobe. A significant portion of the work was completed by contractors, most of who were paid in cash. Contractors included a joiner to build and install the kitchen; an electrician who installed a spa bath and completed other re-wiring; a plumber who re-positioned PC items in the bathroom and installed the spa bath; a carpenter who replaced the doors, skirting boards, remodelled a wardrobe and built a second wardrobe; a painter who repainted the interior of the unit and a floor polisher who sanded and re-coated the floors.
I accept the husband’s evidence that when he was not at work he worked on the renovations. This included obtaining quotations, purchasing materials and working at the unit. The total period during which he was involved was no more than eight weeks. The parties disagree about the removal of the kitchen. The husband and his father contend that they removed the old kitchen without assistance from the wife’s father. The husband’s father said:
“I assisted DH with pulling out the kitchen. DH and I did this job by ourselves, although D’s brothers popped in on weekends to help out. DH and I took the old kitchen to the dump in D’s van”.
The wife’s father contends that he removed the kitchen on a Saturday without assistance from the husband or his father. The husband’s father conceded that the kitchen had been removed in one day and could not explain reference to “weekends” in his affidavit. Of all the witnesses the wife’s father, Mr M was the most impressive.

I accept his evidence that he removed the kitchen and tiled the bathroom and the kitchen. I also accept that he and his teenage son removed the carpets from two rooms. The wife’s father paid for the tiles and did not seek reimbursement from the parties.

Shortly prior to their marriage, the wife re-drew the $6,000 that she had paid onto the Westpac loan and gave $4,000 to her father. This was to pay for the installation of the new kitchen, which was to be completed while the parties were on their honeymoon. The kitchen was not completed and upon their return Mr M returned the $4,000. Mr M explained that in their culture it is customary for men to manage financial matters. Thus, he gave the wife’s $4,000 to the husband. I am satisfied that the $4,000 paid by the husband to the joiner came from the wife’s $4,000 and not from the husband’s savings. The additional $2,000 re-drawn from the home loan was used as spending money on the honeymoon.
In late 2002 the parties purchased a large quantity of furniture and furnishings from the Olympic Authority for $4,000. The husband contends that he paid the $4,000 from his savings. In her oral evidence the wife said that the parties each paid $2,000. She makes no mention of this in her affidavit and did not demonstrate the source of funds. By comparison to the husband at this time she had all of her available funds in a bank account. Payments made by the wife either came from her bank account, rental money or her credit card. Her inability to produce corroborative evidence for this transaction is more telling than the husband’s inability. In these circumstances I am satisfied that the husband paid the $4,000 for the furniture.
At the commencement of cohabitation, other than his interest in Balgownie the husband had a Hyundai car for which he paid $4,500 in early 2002, superannuation of minimal value and a work van worth about $1,000. Other than her interest in the Wollongong property, the wife had superannuation of minimal value, a bedroom suite and personal belongings.
On 13 March 2003 the parties opened a joint account with Westpac[4].

I accept the wife’s evidence that she alone contributed the $1,000 opening deposit. Thereafter, the wife paid $400 per fortnight into the account and the husband paid $600 fortnightly into it. At separation the account balance was $2,001.64. The wife continued to deposit $400 per fortnight until 4 June 2003. After separation the husband made one further payment, $600 on 9 April 2003. On 22 May 2003 the husband withdrew $4,208 from the account. Upon discovering his withdrawal, the wife withdrew $608 on 11 June 2003. The husband contends that he has gambled and lost the $4,208. For the reasons submitted by the wife’s solicitor, I agree that the appropriate adjustment in her favour as a result of these transactions is $2,192
[4] Exhibit C
The parties had a large wedding, with three hundred guests. The husband used part of his $30,000 for the wedding expenses. The wife paid about $6,000 for her wedding expenses. The parties had a bridal register with Myer Wollongong. As well as gifts, they received about $8,000 in cash. The evidence does not distinguish between gifts received from the husband’s guests or gifts received from the wife’s.
Since separation the husband has remained living in the unit. The wife continued to make mortgage payments until September 2003. Since

22 September 2003 the husband has paid the mortgage. The fortnightly
payment is $269.
About one week after separation the wife returned to the unit with her sister so that she could retrieve some clothes. I am satisfied that on this occasion she only removed clothes and personal items. The wife then arranged to return to the unit and collect further belongings. On this occasion police accompanied her. The husband remained downstairs with a female police officer and members of the wife’s family. The wife and a male police officer went into the unit. On this occasion the wife removed the remainder of her personal belongings, linen and other small items of property. Both parties agree that the police instructed the wife that she was only to remove personal effects. I do not accept that she removed anything else. The husband then changed the locks to the unit. When he was away from it, the wife attended with her father and a locksmith and gained entry to the unit. She removed the items included in annexure B to her affidavit. The husband contends that during the second and third attendances the wife, “took almost all of our wedding gifts”. It is his case that the wife should have those gifts received from her family and he should have those gifts received from his family. The wife agrees with this approach but claims that the husband has virtually all of the gifts.

Relevant law

The approach to the determination of an application under section 79 is well established by authority In the Marriage of Lee Steere and Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC

92-335; In the Marriage of Clauson (1995) FLC 92-595 the process ordinarily involves a multiple part procedure. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined in section 79(4)(a) to (c) and the effect of any proposed order upon the earning capacity of either party. I must then evaluate the matters contained in section 75(2) insofar as they are relevant, any other order made under the Act affecting a party or child and any child support under the Child Support (Assessment) Act 1989 that a party to the marriage is to provide, or might be liable to provide in the future, for a child to the marriage.
In determining what order the court should make under section 79, the court must be satisfied in all the circumstances that it is just and equitable to do so [Section 79(2)]. It is the justice and equity of the actual orders that the court must consider. Russell v Russell (1999) FLC 92-877.
It has been necessary consider whether the court should approach the assessment of the parties’ entitlement using a global approach or the asset by asset approach. The global approach involves the division of the parties’ assets on an overall proportion of the global view of the assets. Tuck and Tuck (1981) FLC 91-021. The asset by asset approach involves a determination of the parties’ interests in individual items of property. McMahon and McMahon (1995) FLC 92-606. In Norbis v Norbis (1986) 161 CLR 513 the High Court held that either approach is legitimate, and that in some cases either approach may be adopted in part or in whole. An examination of the reported case reveals that the global approach is the generally preferred approach and the approach most frequently applied. Zyk v Zyk (1995) FLC 92-644. The rationale for its predominance is identified in the following passage taken from Norbis v. Norbis supra[5].
"Although it is natural to assess financial contributions under sec. 79(4)(a) by reference to individual assets, it is also natural to assess the contribution of a spouse as home maker and parent either by reference to the whole of the parties’ property or to some part of that property. For ease of comparison and calculation it will be convenient in assessing the overall contributions of the parties at some stage to place the two types of contribution on the same basis, i.e. on a global or, alternatively, on an “asset-by-asset” basis. Which of the two approaches is the more convenient will depend on the circumstances of the particular case. However, there is much to be said for the view that in most cases the global approach is the more convenient.” per Mason and Deane JJ
[5] at p.75,168
The asset by asset approach has been adopted in those matters where the marriage is of short duration and during which the parties have strictly divided and kept their own assets separate from each other. McMahon supra. An apparent distinction, even when these two features apply is the importance of s.75(2) factors, including the presence or absence of children of the marriage. See Quinn (1979) FLC 90-677 and Kerr (Full Court of the Family Court) 11 August 1995 (unreported).
This issue arose again recently in Danielan v Danielian [2003] FamCA 473. There the marriage lasted two years. At the time of marriage the wife had a share portfolio and the husband had an investment apartment. The wife contributed $304,000 and the husband contributed $254,000 towards their home. As well as being responsible for her own mortgage the wife contributed a significant sum of money towards meeting the husband’s obligations under his loan for the purchase. She had also provided him with money prior to the marriage for various expenses. By the end of cohabitation the wife’s share portfolio had significantly depreciated, whilst the husband’s apartment had appreciated. Le Poer Trench J, assessed the parties contributions on a global basis, ordering that the home be transferred to the wife and that she take responsibility for the mortgage. As the home had increased in value by approximately $300,000 the wife was left with assets worth around $600,000. The husband appealed. Counsel for the husband contended that an asset by asset approach was the proper approach. It was submitted that justice would be best served by looking at the parties’ contributions to their joint ventures and that otherwise the profits and losses of their separate investments should lie where they fall. In contrast the wife’s counsel submitted that the court should adopt a global approach and that, the wife having contributed more to the marriage, should receive about 75% of the pool.
The Full Court stated that the distinguishing feature in this case was that the losses incurred by the wife happened entirely within the course of the marriage and there was no finding that she had deliberately contrived to dissipate or minimise her assets. Their Honours referred the decision of the Full Court in Brown v Green (1999) 25 Fam LR 483 where it was noted that absent the application of waste principles it would be just and equitable to expect spouses to share the brunt of a loss that befell only one of them during a short marriage. Their Honours then cited the cases of Harris (1991) FLC 92-698 and Neneke (1996) FLC 92-698 and stated:
“…the task of the court in proceedings under s79 is not akin to an accounting exercise. The task is to examine the facts of each carefully to decide what is appropriate and just and equitable in the circumstances. There cannot be expected to be a universal answer to that question on any given set of facts. It is of the essence of judicial discretion that different minds may comfortably arrive at different conclusions. By and large marriage is a joint venture where parties can expect to buffer each other from the winds of misfortune that blow during the course of their relationship. The degree of the buffer may depend on how much individual sailing they do without consultation or indeed contrary wishes of the pother. But there can be no certain answer to how much that should be when applying s79 principles.” (at para 49)
The Full Court stated that in this case it was appropriate to make a preliminary assessment on an asset by asset basis, then make a global check to ensure any proposed distribution attributed appropriate weight to the various contributions.
A short marriage does not mandate the adoption of the “asset by asset” approach. This was shown in the case of Judkins and Santamaria [2003] FamCA 618, which involved a marriage of almost 5 years. There were no children of the marriage; however, both parties had adult children from a previous marriage. The Federal Magistrate adopted an “asset by asset” approach and concluded that the contributions of the parties to the former matrimonial home were 90% in favour of the wife and 10% in favour of the husband. It was not considered appropriate to make any adjustment pursuant to section 75(2). He stated:
“This is a short marriage in which the parties have kept their finances separate. The husband has made minimal contributions to his and his daughters’ upkeep, although he has provided a clearly defined contribution to one asset of the parties by virtue of the renovations to the property. I am satisfied that it is therefore appropriate to adopt the asset by asset approach rather than a global approach.”
The decision was appealed on several grounds, one being that His Honour had erred in finding the marriage was of short duration. Counsel referred to Dickey A, Family Law (Lawbook Co 4th edition, 2002) at 712, and submitted:-
“The significance of a short marriage is that whilst every case depends on its own facts, ‘… the court always considers it appropriate to examine the respective contributions of both parties to a marriage more closely in the case of a comparatively short period of cohabitation than in the case of a longer period of cohabitation”.
The Full Court stated that the expression short marriage as used by the Federal Magistrate had no particular legal meaning and was merely used to describe the period for which the marriage lasted. However, they considered it had been open to describe the marriage as “short”. They considered that he had undertaken the required evaluation of the parties’ financial, non-financial, direct and indirect contributions and in their respective capacities as homemaker and parent. However, the appeal was upheld as the order made was seen as being outside what was outside a reasonable exercise of his discretion and was not just and equitable within the meaning of s.79(2). When re-exercising its discretion the Full Court adopted a “global” approach rather than an “asset by asset” approach.

The assets and liabilities as at the date of the hearing

The parties reached agreement as to the value of most assets and the quantum of liabilities.
I find that the assets, liabilities and financial resources of the parties as at the date of hearing are as identified in the following table.

Non-superannuation assets as at the date of hearing	$
The Wollongong property (W) (agreed)	227,500
Wife’s saving (agreed)	3,074
Husband’s half interest in the Balgownie property (agreed)	187,500
Hyundai 1997 (H) (agreed)	4,500
Mitsubishi L300 1983 (H) (agreed)	1,000
Add back money removed from Westpac account (h)	4,208
Add back money removed from Westpac account (w)	608
Wedding money (h)	2,000
Gift vouchers (h)	600
Total non superannuation assets	430,990
Superannuation
First State Super (W) (agreed)	7,229
Futurelink (H) (agreed)	4,836
TOTAL ASSETS	443,055
Liabilities as at the date of hearing
Mortgage attached to Balgownie property (H) (agreed)	14,000
Mortgage on FMH (W) (agreed)	87,996
KH (H)	65,000
Wedding photographer (H) (agreed)	1,000
Wedding photographer (W) (agreed)	1,000
TOTAL LIABILITIES	168,996
NETT ASSETS	274,059

Section 79(4) – Contributions and other factors

Section 79(4) requires that the court look at the entirety of the contributions, both financial and non-financial, to the welfare of the family, as well as the acquisition, conservation and improvement of those assets. Contributions are not required to be tied to the acquisition, conservation or improvement of a particular asset and are to be taken into account generally as contributions in a total sense.
Both parties made financial contributions to the acquisition of assets prior to their marriage. Because this is a short marriage in which there are no children the parties properly emphasise financial contributions, which must be examined closely. Although the parties’ relationship commenced in 1999 they undertook only two joint financial ventures prior to cohabitation. That is the acquisition and improvement of the Wollongong property and distributing between them payments for the wedding. In all other respects they maintained separate finances. The fact that prior to cohabitation the husband acquired savings of $30,000, which he did not bring into the marriage, does not equate to a financial contribution on his part. Nor does the fact that the wife’s acquired savings of $19,000 other than to the extent that those monies were used for joint matrimonial purposes.

The Balgownie Property

The wife does not contend that she made any direct contributions to the Balgownie property however, she say that she made an indirect financial contribution to the husband’s half share of the property. It was submitted that during their relationship and cohabitation the husband contributed income towards meeting expenses associated with the property in addition to that paid from rental income. If he did so prior to cohabitation in the circumstances of this case this does not equate to an indirect contribution on the wife’s part. She was not supporting the husband in any fashion at the relevant time. Other than improvements made in 1999 there is no evidence that Balgownie was improved thereafter, including during cohabitation. The roof was damaged during a storm, which damage was repaired by the insurer. There is no evidence that the husband paid any monies towards the repair of the roof.
Throughout their cohabitation Balgownie was rented for $160 per week. I do not have evidence of its value at the date of marriage or the amount outstanding on the mortgage at that time. In his financial statement sworn 10 February 2004 the husband reveals that the mortgage on Balgownie has reduced to $28,000. Therefore, in the five years he and his brother have owned it, the mortgage has reduced by $32,000. There is no evidence that any capital payments have been made by the husband on the mortgage. The wife’s solicitor focussed on the capital reduction to support his argument that the husband had paid sums towards the mortgage but could not identify when or in what amount additional payments were made. The husband’s half interest in Balgownie may have required him to pay a small amount towards rates and insurance at some stage since its acquisition. However the wife needs to demonstrate that payments were made during cohabitation. The relevant period for assessing contributions to this property is from October 2002 until April 2003. During this period there is no evidence that the husband made any payments towards the property other than allowing his share of the rent to pay the mortgage. There is no evidence that rates and insurances were paid during cohabitation, it being just as likely that these were paid prior to marriage and not during it. Thus payment of the mortgage from rent is the only contribution made towards Balgownie during that period.
From April 2003 until October 2003 Balgownie is likely to have been entirely self-sufficient, that is outgoings met from rental income. In October 2003 the tenants were evicted because they had damaged the property. The property is in obvious disrepair, with holes in the roof, smashed fibro and graffiti adorning its walls[6]. Since the tenants were evicted it appears the husband and his brother have paid the mortgage. The wife has not assisted the husband in any way.
[6] Exhibit D
Since 1999 Balgownie has risen in value, from $145,000 to its current agreed value of $375,000. Thus, the husband’s interest in it has increased from $20,000 nett to $116,000. There is no evidence that differentiates the capital growth in the property from its acquisition until the date of marriage, during the marriage or post-separation. It is likely that the property improved in value prior to cohabitation and perhaps also during it. Cohabitation was only brief and I would have needed expert evidence as to the capital gain achieved during this period before I could be satisfied that there was an increase in its value referable to the period the parties lived together. Because he had contemplated selling his interest in it to his brother the husband obtained a valuation of Balgownie shortly after separation. The valuation was obtained for stamp duty, not family law purposes. At best its utility would have been limited to increase in capital value post separation. Taking all of these factors into account I am not satisfied that the wife made any contribution to Balgownie.

The Wollongong Property

For six months after its acquisition the wife had the rental income which she applied towards the mortgage. Thereafter, she paid the mortgage, rates and levies from her income. I have already found against the wife’s claim that the husband kept the rent. This means that I do not accept her evidence that the husband used the rental money to pay for some of the renovations. It follows that the money used for renovations identified in paragraph’s 17(b), (c), (d) and (e) were paid from the husband’s savings. Because he was much more involved in the renovations than the wife was I place greater weight upon his evidence of the actual cost of the improvements and contractors. In total using part of his $30,000, the husband spent about $11,487 on renovations. The wife and her father dispute that the vanity unit identified in the receipt from United Building Products was installed in the unit. Both assert that it was installed in the husband’s sister’s home. The vanity unit cost $409, which sum in the scheme of this case is insignificant. However, as the other items on the statement were used in the unit it seems probable that the vanity unit was as well.
Using savings acquired before cohabitation the wife paid $4,000 for the kitchen shortly after their marriage. The wife’s father spent $1,410 for tiles and grouting which he did not require the parties to repay. This is a contribution on the wife’s part.
Prior to their marriage the husband worked at the unit and was involved in the renovations for about 6 – 8 weeks. Because she was travelling to Sydney for work and getting ready for the wedding, the wife was not involved in the work done improving the unit. Her involvement was limited to design decisions, sourcing and selection of materials. The labouring work done by the husband was more significant that the wife’s involvement. By doing some of the work himself the husband reduced the total cost of the renovation in a modest way. The wife’s father and brother made a larger contribution on her behalf by carrying out the renovation work I have already identified. The bathroom renovation was particularly significant and considerably lowered the total renovation cost. As a gesture to a friend, the carpenter Steve Fawcett did not charge for his labour. This is a contribution made on the husband’s behalf. It is not as substantial as the work done by the wife’s father and brother. Overall the most valuable work was the installation of the new kitchen and new bathroom, work primarily paid for or undertaken by the wife and her father.
The husband has had the exclusive use of the unit since separation. Until 22 September 2003 the wife paid the mortgage, rates and strata levies without any assistance from the husband. I deduce that she paid about $2,500 towards the mortgage. The husband commenced paying the mortgage instalments after the wife filed an application for exclusive use of the property. He claims to have paid rates and strata levies since then. The wife understood that there were arrears of both strata levies and also council rates. The evidence was somewhat unclear. If there are any arrears these must be paid from the husband’s entitlement. The wife has been living in her father’s garage; her mortgage and the payments she has made since separation are a financial contribution that must be acknowledged. Because the husband has been in occupation and the payments he has made have been modest, he has done no more than meet the reasonable cost of occupation. The wife’s post separation financial contribution to the unit is more valuable than the husband’s.
Since separation no improvements have been made to the unit.
In Pierce v Pierce 1999 FLC 92-844 the Full Court of the Family Court held:
In our opinion it is not so much a matter of erosion of contribution, but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.
The wife’s initial contribution towards the acquisition of the Wollongong property is fundamental. It includes the first home grant moneys, which the husband agrees were attributable to her eligibility. In some circumstances this might be treated as a windfall to both parties. However, the husband did not contend this and he did not claim a contribution in this regard. In such a short marriage I am satisfied that the wife made this specific contribution. Without her cash contribution the parties are unlikely to have been able to acquire and then improve the property during the brief time they were together. It is highly unlikely that the improved value of the unit is substantially attributable to the improvements, given their nature and cost. Too a significant extent the current value is therefore attributable to the wife’s acquisition of it. Similarly towards the rent earned and used to pay the mortgage. The husband’s subsequent financial contributions have less significance than the wife’s initial and subsequent financial contributions. There is about a $6,000 differential favourable to the husband in the monies spent improving the unit. The wife’s non-financial contribution made on her behalf towards the improvements exceeds the value and significance of those made by or on the husband’s behalf.
Since separation the wife has paid about $2,500 towards the mortgage, a factor that must be given real weight. Without these payments the parties would have been in default of the mortgage and ownership of the unit thereby jeopardised. The husband’s payments since September 2003 are less than the property rented for prior to the improvements. The husband is treated generously by treating his payments as the cost of occupation. The benefit he received is greater than the amount he has paid out. Nonetheless, I a satisfied that that is the proper approach to take.
Overall, I am satisfied that the wife’s entire contributions towards the Wollongong property are 80% as compared to the husband’s 20%.

Wedding gifts and other possessions

The wife contributed her bedroom suite and the husband paid for the furniture acquired from the Olympic Authority.
There is no evidence about the cost of the wedding jewellery, nor the wedding. In my view, the payment of wedding expenses in most cases cannot be seen as a financial contribution within the meaning of s.79(4)(a). I agree with the approach taken by Wilczek J in Sharma (unreported) 22 March 1994 where His Honour concluded:
“Both the husband and the wife had the benefit of those expenses incurred, and their travelling and honeymoon. On that basis I do not propose to further bring into account any funds the parties had prior to the marriage.”
It cannot be said that the payment of the wedding expenses led to the acquisition, conservation or improvement of property. Whilst it may be argued that the money enabled guests to be invited which in turn gave property to the parties by way of gifts, the issue of gifts that results from a wedding is a different consideration. The gifts themselves can be regarded as a contribution and in most cases will be regarded as a contribution by the person whose family provided them. Whilst there is some evidence of monies paid by the wife for her wedding dress and associated wedding expenses, I am not satisfied that this is comprises a s.79 contribution.
The parties received a large quantity of wedding gifts, the value and source of which is not in evidence. The best that I can do is infer they contributed equally to wedding cash and gifts. They received $8,000 cash, which both parties give different accounts of its expenditure. The husband claims that he borrowed $5000 from a friend before the wedding, repaying him with the wedding money. He does not contend that the wife was aware of this loan or its repayment. This evidence corroborates the wife’s contention that the husband had control over the wedding money. However, he did not provide any proof that he borrowed money from the friend, if borrowed that the money was used for joint matrimonial purposes or that it was actually repaid. In those circumstances I am not satisfied that the husband’s evidence concerning the disposition of the wedding money is correct. Nor do I accept the wife’s contention that $2,000 was used on the renovations. She does not identify the renovation work that this money paid for. As most of the work was completed prior to their marriage I am not satisfied that the money was used as described. The effect of this is that it is likely that more than $2,000 was spent on living expenses and at least $2,000 and $600 in gift vouchers remained in the husband’s possession at separation. These amounts will be notionally added back into the asset pool, as amounts in the husband’s possession. The wife is entitled to have half the value.
The husband purchased engagement and wedding rings, contributed to the prepaid honeymoon and wedding costs. I do not take into account pursuant to s.79(4) the monies paid by or on behalf of either party towards their wedding or honeymoon.
For the reasons I have already given, I am satisfied that the husband has the vast majority of furniture and wedding gifts. Other than her personal belongings and clothes the wife has only removed those items contained in annexure B to her affidavit. Excluding her engagement and wedding jewellery, annexure C comprises property she owned prior to the marriage and to which the husband made no contribution. At separation the wife threw her engagement and wedding jewellery at the husband, in effect giving them back to him. As he paid for the jewellery and the wife returned it to him, it will remain with him. The husband must arrange to return the balance of the items in annexure C to the wife. If he fails to do so within 14 days he must pay the wife the replacement cost. These items are nearly new and their replacement cost is a better measure of value than second hand prices. If the husband does not return these items to her the wife shall obtain quotes from Grace Brothers (or Myers) for the goods which amount will be deducted from the husband’s share of the property.
The wedding gifts on schedule D will be divided between the parties in accordance with their provenance. The husband will have gifts advanced from his family and friends and the wife will have those from her side. The husband shall give the wife a copy of the bridal register within 7 days identifying those gifts that he claims. The wife will reply within a further 7 days. Any disputed items will be placed onto two separate lists of equivalent value. The wife to have the right to select the list of her choice and the husband to have the other. In the event that the husband fails to give the wife those items to which she is entitled, the same replacement approach as described for annexure C shall be adopted. The furniture and household goods acquired from the Olympic Authority are excluded from this exercise and shall remain in the husband’s possession.
The wife’s solicitor submitted that other than contributing to groceries and some household expenses the husband made virtually no financial contribution during cohabitation. In Parshen 1996 FLC 92-720 the Full Court of the Family Court rejected the arguments advanced on behalf of the wife concerning the need for evidence to establish that monies received during the course of cohabitation were used for joint purposes. The Full Court holding:
‘In our view, in the absence of evidence to the contrary, it should be inferred in proceedings pursuant to the provisions of s.79 that monies howsoever received by a party during the course of the parties’ cohabitation, are used by that party for the benefit of the family unit’. Such monies, in those circumstances, thus constitute a financial contribution by the party who received the monies.”

Other contributions

From cohabitation until separation the husband earned more than the wife did. He earned approximately $55,000 per annum and the wife earned approximately $40,000 per annum. The husband said:
“After our marriage I gave the wife $100 per week to purchase her train tickets and to have some cash on her. I also paid for the groceries and almost all of the other recurrent expenses such as electricity, telephone, rates and strata levies”.
During cross-examination he agreed that the wife paid the rates and the strata levies. The wife denied receiving $100 per week from the husband. She said that she had her own account with Westpac into which her salary was paid. It was linked to her Westpac credit card. Her credit card statements[7] reveal numerous transactions made by the wife corroborating her evidence that restaurant expense, groceries, petrol, clothing and electricity payments were made from her account. During cohabitation it appears that she made total payments on her credit card of $4,470.32 for these types of expenses. In spite of the husband’s evidence that both parties used the wife’s credit card and he made payments on it there is no evidence that he did so. During cohabitation the husband was a wage earner and his pay was put into a bank account. He did not produce any bank records, which corroborated withdrawals that may have been attributable to payments to the wife’s visa card. I am satisfied that there were none.
[7] Exhibit 1
During cohabitation I am satisfied that both parties contributed all of their income to joint matrimonial purposes. Putting to one side the parties’ initial contributions, I am satisfied that during cohabitation the husband made a slightly greater financial contribution than the wife did.
During cohabitation both parties had superannuation interests, apparently paid at the statutory rate by their employer. Neither party contends that they made any additional payments towards superannuation. I agree with the approach taken that this not a matter in which it could be said that either party contributed to the other’s superannuation interest.
During cohabitation I am satisfied that the wife was primarily responsible for maintaining the home. I accept her evidence that the parties stepped into traditional roles and that the husband expected

her to maintain the home as well as preparing the meals with little assistance from him. These contributions were undertaken for an apparently short time. Overall, her contributions as a home maker exceed the husband’s. These contributions are comparable to the husband’s slightly greater financial contribution during cohabitation and some of his non-financial contribution towards the home unit that I have already taken into account.
Thus on an asset by asset approach the contributions may be summarised thus:
·The husband made the sole contribution towards Balgownie.
·The wife’s contributions towards the Wollongong property exceed the husband’s, hers 80% and his 20%.
·The parties contributed equally to the available wedding money and the wife shall have an adjustment of $1300 in her favour.
·The husband paid the Olympic Authority for the furniture and shall retain these items. This reflects his contribution. No further adjustment is warranted.
·Wedding gifts and other household goods shall be divided in a fashion that reflects the parties’ contributions. No further adjustment is warranted.
·The husband took $4,208 at separation to which the wife contributed half. An adjustment of $2,192 must be made in her favour.
·The other contributions made by each of the parties do not warrant further adjustment. Each should retain the remaining assets not addressed above without further adjustment.
The orders I propose will not affect the earning capacity of either party.
There are no children and hence child support is not an issue.
Excluding superannuation the husband has assets worth $199,808. He has superannuation worth $4,836 and liabilities of $80,000. He may receive taxation and other penalties after the court papers and the early part of the transcript before a s.128 certificate was given. This relates to his non-disclosure of income prior to cohabitation and claiming government benefits to which he had no entitlement. Thus this will be the husband’s sole responsibility. He is entitled to an adjustment from the unit of $27,901 less $1300 and $2192, a total adjustment of $24,409. Thus the husband will have assets worth $144,217 and superannuation of $4,836 totalling $149,053. The wife has assets worth $231,182 and liabilities if $88,996. Her superannuation is worth $7,229. After she pays the husband $24,409 her net assets are $125,006.
Examining this outcome globally, evaluating the parties’ contributions it is clear that the husband made a greater initial contribution. Thereafter, the wife made no contribution to Balgownie. Their only joint ventures were the acquisition of the home unit, furniture and income earned post cohabitation. The wife’s capital contribution to the acquisition of the home unit is highly significant. The husband did not have any available cash assets that he was able to use to acquire a home unit. In the short period that the parties were married, had it not been for the wife’s financial contribution to the acquisition of the home unit it is highly unlikely that the parties could have saved a deposit in the period they cohabited. This is a factor to which I give considerable weight. The husband paid more of the costs of the improvements than the wife did, but the work performed by her father was significant and more valuable than the work performed by or on behalf of the husband. The wife made a greater contribution as a homemaker than the husband but given the short period of cohabitation this is not a significant contribution by her. The wife’s financial contribution since separation exceeds the husband’s. On a global basis the findings I have already made concerning furniture, personalty and superannuation are apposite. Having regard to these factors, I am satisfied that the result achieved on an asset by asset approach delivers an outcome approximating 54% to the husband as compared to the wife’s 46%. This is subject to the furniture adjustments to which I have made reference. This is the appropriate outcome of the s.79(4) phase.

Section 75(2)

Both parties agree that there should be no adjustment pursuant to s.75(2). I agree. There is nothing on the facts of this case that indicates any s.75(2) adjustment is warranted.

Section 79(2) – Is this a just and equitable outcome?

Because the court must consider the actual orders, not just the percentage distribution under s.79(2) justice and equity in cases like this requires that the court stands back and looks carefully at the outcome of the s.79(4) and s.75(2) process. In paragraph 49

I summarise my key findings concerning the contributions phase. This is a short marriage in which the parties correctly emphasise financial contributions. Significant non-financial contributions were made improving the Wollongong property. The parties will have the assets to which they have each made the major contribution and both will have the benefit, albeit to different degrees, to the value of property to which both have contributed. I am satisfied that the result achieved is just and equitable.
The husband contends that he has an emotional attachment to the home unit and wishes to live in it. The wife also wishes to have it. The wife’s contribution to the home unit is greater than the husband’s. The husband has another, albeit less attractive property, available to him. Presently, the wife is living in a garage attached to her parents’ home. She has the capacity to pay out the husband’s interest in the unit. The approach taken by the husband in simple terms is that he should have the unit because he is in it. It cannot be that the court’s discretion would be strongly influenced by a “first in first served” argument. In the circumstances of this case I am satisfied that because the wife made the greater contribution to the unit’s acquisition and the period of cohabitation was so short, that she should have the opportunity to acquire the husband’s interest. The husband’s counsel contended that a just result would be to order the unit’s sale and divide the proceeds. Whilst this may test the accuracy of the agreed value, it will require the parties to incur potentially substantial selling costs for no good reason. The asset pool is small and I do not consider that the court should impose further unnecessary expense.

The effect of my orders will be that the husband must vacate the home upon the wife paying him $24,409. If he has failed to deliver the goods to which she is entitled the wife may deduct the value calculated in accordance with the formulae set out on these reasons from the $24,409. In the event that she fails to pay the monies ordered then the husband will have the opportunity to acquire her interest in the unit. He will be required to pay out the mortgage and all outgoings on it until he vacates the unit. If there are any rates, levies or mortgage payments outstanding these must be deducted from the $24,409. The wife must ensure that the husband has no liability pursuant to the mortgage and if required obtain a release from the mortgagee in the husband’s favour. The parties must be free to make their way without any lingering financial attachment to the other.
These orders I am satisfied are just and equitable within the meaning of the Act.
For these reasons I make the orders identified at the start of these reasons.

I certify that the preceding eighty-seven (87) paragraphs are a true copy of the reasons for judgment of Ryan FM

Associate: S. Mashman

Date: 19 March 2004