Diab & Diab
[2021] FCCA 1124
•27 May 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Diab & Diab [2021] FCCA 1124
File number(s): PAC 4145 of 2017 Judgment of: JUDGE BECKHOUSE Date of judgment: 27 May 2021 Catchwords: FAMILY LAW – Property – alteration of property interests – assessment of contributions and future needs – just and equitable order Legislation: Family Law Act 1975 (Cth) ss 75(2), 75(2)(o), 79, 79(4)(e), 90XT(1)(a), 90XT(1)(b) Cases cited: Britt & Britt [2017] FamCAFC 27
Hickey v Hickey & Attorney-General of the Commonwealth (Intervener) (2003) FLC 93-143
Holland & Holland [2017] FamCAFC 166
Kennon & Kennon (1997) FLC 92-757
Kucera & Kucera [2009] FMCAfam 1032
S & S [2003] FamCA 905
Stanford v Stanford (2012) 293 ALR 70
Number of paragraphs: 110 Date of hearing: 29-30 March 2021 Place: Parramatta Counsel for the Applicant: Mr Kenny Counsel for the Respondent: Ms Snelling Solicitor for the Applicant: Bell Lawyers Solicitor for the Respondent: Stamford Law ORDERS
PAC 4145 of 2017 BETWEEN: MS DIAB
Applicant
AND: MR DIAB
Respondent
ORDER MADE BY:
JUDGE BECKHOUSE
DATE OF ORDER:
27 MAY 2021
THE COURT ORDERS THAT:
1.Following payment being made in accordance with Orders 10 (i) to (vi) of the Orders made on 14 December 2020, the balance of the sale proceeds for B(1) and B(2) Street, Suburb C, shall be distributed as follows:
(a)A payment to the Wife of 65% of the balance;
(b)A payment to the Husband of the remaining 35%.
2.The funds held in the term deposit account with Bank D be distributed at 65% to the Wife and 35% to the Husband.
3.In accordance with paragraph 90XT(1)(b) of the Family Law Act 1975 (Cth):
(a)The Wife (or Wife’s administrators, executors, beneficiaries, heirs or assigns) is entitled to be paid the specified percentage out of the Husband’s interest in Super Fund E, member number ...
(b)The Husband’s entitlement (or the entitlement of such other person to whom a payment may be made out of the Husband’s interest) in Super Fund E, is correspondingly reduced by force of this Order; and
(c)The percentage specified for the purposes of this Order is 55%.
4.The trustee of Super Fund E shall do all such acts and things and sign all such documents as may be necessary to:
(a)Calculate, in accordance with the requirements of the Family Law Act 1975 (Cth) and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the Wife in the immediately preceding clause of this Order;
(b)Pay the entitlement whenever the trustee makes a splittable payment from the Husband’s interest in Super Fund E.
5.This Order has effect from the operative time and the operative time is 4 business days after the date of service of this Order upon the trustee.
6.Orders 3 to 5 inclusive are binding on the Trustee of Super Fund E.
7.After service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1994 (“the SIS Regulations”), the Wife shall do all such things and sign all such documents as may be necessary, including but not limited to exercising the Wife’s request in accordance with the SIS Regulations, for the transfer or rollover of the non-member spouse interest in the Wife’s name in Super Fund E.
8.The Court notes:
(a)The value of the non-member spouse’s interest is calculated in accordance with the SIS Regulations; and
(b)Any payments from the Husband’s superannuation interest in Super Fund E made after the trustee has created a new interest in the Wife’s name in Super Fund E are not splittable payment in accordance with the requirements of the Family Law (Superannuation) Regulations 2001.
9.Unless otherwise specified in these Orders:
(a)Each party shall be solely entitled to the exclusion of the other to all property in the possession of such party as at this date including any jewellery, furniture, furnishings, shares and motor vehicles.
(b)Moneys standing to the credit of the parties in any bank accounts is to be the property of the party in whose name such bank account is held.
(c)Each party hereby forgoes any claims they may have to any superannuation benefit to or owned by the other. The party in whose name any such policy of superannuation or insurance stands shall be deemed to be the owner and the beneficiary of such policy to the exclusion of the other.
(d)Each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to this Order.
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 Diab & Diab is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
These are property settlement proceedings under the Family Law Act 1975 (Cth) (“the Act”) between the Applicant Wife, Ms Diab (“the Wife”) and the Respondent Husband, Mr Diab (“the Husband”) arising from the breakdown of their marriage.
ISSUES IN DISPUTE
The proceedings were commenced on 18 August 2017 and understandably the asset pool and issues in dispute have evolved over that period of time. In the lead up to the final hearing, Orders were made on a range of issues including the sub-division of a parcel of land and its ultimate sale.
The parties are in agreement that it is just and equitable to make orders adjusting their interests in the matrimonial property.
At the commencement of the hearing issues that remained in dispute were:-
(a)How to treat some of the assets and liabilities of the parties;
(b)How the post separation financial contributions and distributions should be treated; and
(c)What orders should be made adjusting the property between the parties.
During final submissions the legal representatives for the parties confirmed that neither party was seeking that their post separation contributions be formally treated as “add-backs” but rather that they be recognised by way of an adjustment under section 75(2)(o) of the Act.
BACKGROUND
The Wife is Ms Diab, who was born in 1976 in Country F and is currently aged 44 years.
The Husband is Mr Diab, who was born in 1974 in Country F and is currently aged 47 years.
The parties met in 1999 and married in Country F in 2000. They separated in October 2015 and divorced on 6 March 2019.
There are three children of the marriage namely: Ms G born in 2000, aged 20, X born in 2004, aged 16 and Y born in 2007, aged 14.
HISTORY OF THE PROCEEDINGS
These proceedings commenced on 18 August 2017 by way of the Applicant Wife filing an Initiating Application seeking both parenting and property orders.
On 3 October 2017 interim consent orders were made by Judge Dunkley at the Parramatta Registry of the Federal Circuit Court.
The Husband filed his Response to the Initiating Application and a Financial Statement on 2 November 2017.
On 10 November 2017, orders were made for the parties to jointly fund a valuation of the properties at B(1) and B(2) Street, Suburb C (jointly referred to as the “B(1) and B(2) Street, Suburb C property”). The parties were also ordered to attend a Conciliation Conference on 29 January 2018.
On 31 July 2019 the Wife filed an Amended Initiating Application seeking the sale of the B(1) and B(2) Street, Suburb C property. Additionally the Wife sought a superannuation splitting order pursuant to section 90XT(1)(a) of the Act.
On 29 September 2020 the parties entered into consent orders which allowed for the subdivision of the B(1) and B(2) Street, Suburb C property.
The matter was set down for a three (3) day final hearing on 14, 15 and 16 December 2020 but it was not reached. However, orders were made by consent which had the effect of resolving all outstanding parenting matters between the parties. Notably those orders allocated sole parental responsibility to the mother, provided that the children live with the mother and spend time with the father in accordance with their wishes. The children are not currently spending time with their father, and have not since at least 2018. Consent orders were also made on 14 December 2020 in relation to the sub-division and subsequent sale of the B(1) and B(2) Street, Suburb C property.
The case was listed as a priority hearing on 29 and 30 March 2021.
RELEVANT FACTS
Before considering the proposals and the law it is useful to capture the relevant facts.
The following summary of the evidence is drawn from the parties’ affidavit evidence, their evidence during cross-examination, and from the tendered exhibits.
Where there is a conflict between the parties’ evidence, I have preferred the evidence of the Wife on the basis that I find the Wife to be a more reliable witness than the Husband. I do not find the Husband’s evidence on, and accounting for, the post separation contributions credible as set out further in this judgment.
In 2000 the parties moved to Australia and resided in a property owned by the Wife’s parents in B(1) and B(2) Street, Suburb C. In 2001 the parties purchased the B(1) and B(2) Street, Suburb C property from the Wife’s parents for $172,500.00.
In 2008 the parties borrowed money to build a house at the rear of the B(1) and B(2) Street, Suburb C property. In 2009 the parties moved into the new property known as B(2) Street, Suburb C and rented out the former matrimonial home known as B(1) Street, Suburb C.
In 2015 the parties purchased a property at H Street, Suburb J for $815,000 (“H Street, Suburb J property”). To purchase the property, the parties obtained a loan using the B(1) and B(2) Street, Suburb C property as security.
The parties separated in October 2015. In or around October/November 2015 the Husband withdrew $12,000.00 from the parties’ joint Commonwealth Bank of Australia (CBA) account and deposited it into his personal account. Shortly after, the Husband began redirecting the rental income from the B(1) and B(2) Street, Suburb C property into his personal account.
In 2016 the Wife was involved in a car accident. The insurance payout of $16,000.00 was divided equally between the parties.
On 15 August 2017 the H Street, Suburb J property was sold for $900,000.00. Following payment of the mortgage and costs associated with the sale of the property, the balance of $34,728.00 was placed into a term deposit.
On 29 September 2020 interim consent orders were made by Judge Dunkley for the subdivision of the B(1) and B(2) Street, Suburb C property.
MATERIAL RELIED UPON
The Wife was legally represented and relied upon the following material:
(a)Amended Initiating Application filed 31 July 2019
(b)Amended Financial Statement filed 31 July 2019
(c)Affidavit of Ms Diab filed 27 February 2020
(d)Affidavit of Mr K filed 21 March 2020
(e)Affidavit of Mr L filed 11 December 2020
(f)Updating Affidavit of Ms Diab filed 11 December 2020
(g)Case Outline document prepared by her counsel filed 11 December 2020
The Wife also relied upon the following documents admitted into evidence and marked as exhibits:
(a)Joint balance sheet (marked C1)
(b)Applicant Wife’s tender bundle (marked AW2)
(c)M Medical Centre Report dated 17 February 2021 (marked AW4)
(d)Annexure AK – paragraph 166 of Wife’s Affidavit (marked AW5)
(e)Text messages regarding home tutoring – 2 pages (marked AW6)
(f)Applicant Wife’s Minute of Order (marked AW9)
(g)Applicant Wife’s Costs Notice (marked AW10)
(h)Final Parenting Consent Orders dated 14 December 2020 (marked AW12)
(i)3 Financial Statements (marked AW13)
The Husband was legally represented and relied upon the following material:
(a)Amended Response filed 3 September 2019
(b)Affidavit of Mr Diab filed 27 February 2020
(c)Affidavit of Mr Diab filed 22 September 2020
(d)Affidavit of Dr N filed 24 March 2021
(e)Financial Statement filed 28 March 2021
(f)Case Outline document prepared by his counsel filed 29 March 2021
The Husband also relied upon the following documents admitted into evidence and marked as exhibits:
(a)Respondent Husband’s tender bundle (marked RH3)
(b)Single Expert Report by Dr O dated 3 April 2019 (marked RH7)
(c)SMS text messages – 6 pages (marked RH8)
(d)Applicant Wife’s CBA bank statement for period 1 January 2016 to 6 April 2016 – 11 pages (marked RH11)
The Husband and Wife were each called to give evidence. In addition, forensic psychiatrist Dr N gave evidence for the Husband, and the Wife’s brother, Mr K gave evidence for the Wife.
PROPOSALS
I will now consider the parties’ proposals.
The Wife’s proposal is contained in a document headed “Minute of Orders sought by the Applicant Wife”. That document incorporates the Consent Orders made on 29 September 2020 and 14 December 2020. Counsel for the Wife confirmed that there are three contentious orders in that document which identify the issues in dispute. They are set out below:
1.That following payment being made in accordance with Order 13 (a) to (e), the balance of the sale proceeds for B(1) and B(2) Street, Suburb C, shall be distributed as follows:
a. payment to the Wife 70%;
b. payment to Husband 30%.
19. That, in accordance with paragraph 90XT(1)(b) of the Family Law Act 1975:
a.The Wife (or Wife’s administrators, executors, beneficiaries, heirs or assigns) is entitled to be paid the specified percentage out of the Husband’s interest in Super Fund E, member number ...
b.The Husband’s entitlement (or the entitlement of such other person to whom a payment may be made out of the Husband’s interest) in Super Fund E, is correspondingly reduced by force of this Order; and
c.The percentage specified for the purposes of this Order is 60%
26.That the funds held in the term deposit account with Bank D be distributed at 70% of the Wife and 30% of the Husband.
The Wife’s seeks the following orders:
Minute of orders sought by the Applicant Wife
16.That following payment being made in accordance with Order 13 (a) to (e), the balance of the sale proceeds for B(1) and B(2) Street, Suburb C, shall be distributed as follows:
a.payment to the Wife 70%;
b.payment to Husband 30%.
17.The Husband shall pay to the Wife by way of reimbursement 50% of additional costs met by the Wife relating to the subdivision of the B(1) and B(2) Street, Suburb C property such costs being incurred over and above the sum of $13,100.00 provided for at Order 13(d) and the reimbursement to the Wife shall be paid from the Husband’s share of the sale proceeds provided for at 16(b) above.
18.For the purpose of Order 17 above, the Wife shall provide to the Husband a copy of invoices and receipts and the Husband shall within 14 days thereafter reimburse the Wife.
19. That, in accordance with paragraph 90XT(1)(b) of the Family Law Act 1975:
a. The Wife (or Wife’s administrators, executors, beneficiaries, heirs or assigns) is entitled to be paid the specified percentage out of the Husband’s interest in Super Fund E, member number ...
b. The Husband’s entitlement (or the entitlement of such other person to whom a payment may be made out of the Husband’s interest) in Super Fund E, is correspondingly reduced by force of this Order; and
c. The percentage specified for the purposes of this Order is 60%
20.That the trustee of Super Fund E shall do all such acts and things and sign all such documents as may be necessary to:
a. Calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the Wife in the immediately preceding clause of this Order
b. Pay the entitlement whenever the trustee makes a splittable payment from [the] Husband’s interest in Super Fund E.
21.That this order has effect from the operative time and the operative time is 4 business days after the date of service of this Order upon the trustee.
22.That Orders 19 to 21 inclusive are binding on the Trustee of Super Fund E.
23.That, after service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1994 (“the SIS Regulations”), the Wife shall do all such things and sign all such documents as may be necessary, including but not limited to exercising the Wife’s request in accordance with the SIS Regulations, for the transfer or rollover of the non-member spouse interest in the Wife’s name in Super Fund E.
24.That the Court notes:
a. The value of the non-member spouse’s interest is calculated in accordance with the SIS Regulations; and
b. Any payments from the Husband’s superannuation interest in Super Fund E made after the trustee has created a new interest in the Wife’s name in Super Fund E are not splittable payment in accordance with the requirements of the Family Law (Superannuation) Regulations 2001.
25.From the date of these Orders and pending sale of the B(1) and B(2) Street, Suburb C properties the Respondent shall attend to payment, as they fall due, all regular instalments in respect of the mortgage, statutory rates and charges, utilities, house and contents insurance, and the outgoings including water rates, council rates and the like in respect of the B(1) and B(2) Street, Suburb C properties (not including B(1) Street utilities where such utilities are paid by the tenants in occupation of the property).
26.That the funds held in the term deposit account with Bank D be distributed at 70% to the Wife and 30% to the Husband.
27.That unless otherwise specified in these Orders:
a. Each party shall be solely entitled to the exclusion of the other to all property in the possession of such party as at this date including any jewellery, furniture, furnishings, shares and motor vehicles.
b. Moneys standing to the credit of the parties in any bank accounts to be the property of the party in whose name such bank account is held.
c. Each party hereby forgoes any claims they may have to any superannuation benefit to or owned by the other. The party in whose name any such policy of superannuation or insurance stand shall be deemed to be the owner and the beneficiary of such policy to the exclusion of the other.
d. Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to this Order.
28.The Husband shall provide complete access to B(1) and B(2) Street, Suburb C to P Valuations to enable a valuation report to be prepared for subdivision purposes.
29.That either party have liberty to apply as to implementation or enforcement of these orders upon the giving of 7 days written notice to the other.
30.Both parties do all acts and things and execute all documents, authorities and writings as are necessary to give effect to all or any of these Orders.
31.That the Husband shall pay the Wife’s legal costs.
The Husband’s proposal is set out in his Amended Response filed on 3 September 2019. However the Orders he seeks in his Amended Response have been superseded by events (notably the Consent Orders made on 29 September 2020 and 14 December 2020) so it is unnecessary to set them out here. However, it is clear from his Amended Response and he confirms this in his Case Outline document, that “the property should be divided as to 55% to the wife and 45% to the husband”[1] and that the “Superannuation funds belonging to the husband to be divided between the parties in equal shares.”[2]
[1] Respondent Husband’s Case Outline filed 29 March 2021, page 7.
[2] Order 4 of Respondent Husband’s Amended Response filed 3 September 2019, page 4.
THE LAW
In determining property matters consideration must be had to Part VIII of the Act and in particular sections 75, 78 and 79. The approach to the alteration of property interests between two parties to a marriage is governed primarily by section 79 of the Act.
The first question that must be asked as articulated by the High Court in Stanford v Stanford (2012) 293 ALR 70 at [79] and [80] is whether “it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.”
Neither party in this case contends that it is not just nor equitable for the Court to make property orders, so the matter can proceed to a property division, applying the various principals.
In considering what orders are appropriate to be made I will follow the four step process in accordance with the Full Court decision of Hickey v Hickey & Attorney-General of the Commonwealth (Intervener) (2003) FLC 93-143 at [39] which can be summarised as follows:
(a)Identify and value, as at the date of hearing, the parties’ property, liabilities and financial resources;
(b)Identify and assess the parties contributions pursuant to s79;
(c)Identify and assess the parties ongoing needs taking into account the relevant factors relevant under s79 and s75(2); and
(d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances of the case.
The parties submitted that some items should be excluded from the property pool. The Full Court of the Family Court of Australia in Holland & Holland [2017] FamCACF 166 at [16] to [43] inclusive made it clear that no property is excluded from consideration, though the Court has discretion as to how particular property may be dealt with after proper consideration (at paragraph 34):
...it is important to emphasise that the categorisation of property as ‘an inheritance’ or as ‘after-acquired’ property often leads to an erroneous argument that unless contributions to that property can be established, the property should be ‘excluded from consideration’. As we have said, that argument is erroneous by reason of ignoring the fundamental premise that section 79 is directed to all of the existing legal and equitable interests in property of the parties or either of them without exclusion of any of those interests.
Accordingly, I find that none of the assets or liabilities established as forming part or affecting the matrimonial asset pool are “excluded”.
I will now determine how to proceed with the property division.
ASSETS AND LIABILITIESThe parties tendered a Joint Balance Sheet which is set out below.
ASSETS
Ownership Description Wife/de facto partner's value Husband/de facto partner's value 1 Joint B(1) Street, Suburb C E 660,000 1,260,000 2 Joint B(2) Street, Suburb C E 990,000 3 Joint Sale proceeds of H Street, Suburb J property 22,553 22,553 4 Joint CBA Account ...58 (inactive joint account) NIL 2970 5 Husband Motor Vehicle 1 (on finance) E 45,000 E 35,000 6 Husband CBA Account #...99 185 7 Husband CBA Account #...75 2 8 Wife CBA Account #...73 1,357 NIL 9 Joint Home contents E 10,000 NIL 10 Wife Gold and diamond jewellery NIL NIL Total $ 1,728,910 $ 1,320,710
ADDBACKS
Ownership Description Wife/de facto partner's value Husband/de facto partner's value 11 Husband Sale proceeds of Motor Vehicle 2 18,000 12 Husband Rent from B(1) Street, Suburb C retained by Husband E 1,300 13 Husband Super Fund E early access 20,000 Total $ 39,300 $
LIABILITIES
Ownership Description Wife/de facto partner's value Husband/de facto partner's value 14 Joint Mortgage to Commonwealth Bank of Australia 228,629 233,858 15 Joint CBA Veridian Line of Credit Account #...53 E 101,000 E 102,000 16 Husband Mastercard NIL 3472 17 Husband Motor Vehicle 1 Finance NIL 32,914 18 Husband Personal Loans NIL 55,000 19 Wife Loan from parents 23,000 20 Wife Loan from Q for subdivision 13,100 Total $ 365,729 $ 427,244
SUPERANNUATION
Member Name of Fund Type of Interest Wife/de facto partner's value Husband/de facto partner's value 21 Husband Super Fund E 246,405 243,848 Total $ 246,405 $ 243,848
NETT TOTAL ASSETS (including Superannuation)
$ 1,648,886
$ 1,137,314
Various concessions were made by the parties as to the assets and liabilities listed in the joint balance sheet. They are:
(a)Items 1 & 2 relate to the value of the B(1) and B(2) Street, Suburb C property which is in the process of being sub-divided. The Wife’s value was based on the sub-division proceeding but the Husband’s was not. The Wife’s value will therefore be adopted noting that the parties have agreed to the sale of the properties so the value will be realised by the market.
(b)Items 11-13 are not pressed by the Applicant Wife as add-backs. They will be removed from the property pool although not disregarded.
(c)Items 5, 16 - 17 do not form part of the property pool. The Wife concedes that the Husband’s Motor Vehicle 1 essentially has no equity.
(d)Items 6 – 8 are not in contention – both parties agree to treat these as appropriately distributed.
(e)Items 9 & 10 are not in contention – both parties agree to treat these as appropriately distributed.
(f)The loan from Q for sub-division is not contested and has been incorporated into the 14 December 2020 orders.
(g)Time was spent during cross-examination on the loans referred to at 18 and 19. They will be referred to later but neither were established as matrimonial debts.
(h)The Husband’s Mastercard liability at 16 was not established as a matrimonial debt although regard will be had for it under other considerations.
(i)The Wife concedes the value that the Husband attributes to Super Fund E.
I find that the property pool consists of assets and liabilities with a net value of $1,580,543 being made up of the following:-
Assets Description Agreed value 1. B(1) Street, Suburb C E $660,000 2 B(2) Street, Suburb C E $990,000 3 Sale proceeds of H Street, Suburb J $22,553 TOTAL ASSETS $1,672,553 Liabilities Description Agreed value 4. Mortgage to Commonwealth Bank of Australia (CBA) $233,858 5. CBA Veridian Line of Credit Account #...53 E $102,000 TOTAL LIABILITIES $335,858 TOTAL NET $1,336,695
Description Agreed value 6. Super Fund E $243,848 TOTAL MATRIMONIAL POOL VALUE $1,580,543
Should the superannuation pool be treated separately from the non-superannuation pool?
Consideration is generally given to whether a global or asset by asset approach is to be adopted and whether a one or more pool approach is to be taken. The parties are in agreement on this issue. They propose that I adopt a two pool approach by treating the matrimonial assets and liabilities separately to the superannuation funds.
Given the length of the relationship and the adjustments argued under section 75(2) I find that this is a matter where a two pool approach is appropriate.
Accordingly, the net matrimonial assets, without superannuation included, is valued at $1,336,695.
CONTRIBUTIONS
Direct and indirect financial and non-financial contributions to the acquisition, conservation and improvement of the matrimonial property
Neither party had assets of any significance at the date of marriage.
The Wife submits:
(a)Her parents provided a financial contribution on her behalf by allowing the parties to stay with them rent free from the time of their marriage until 2001 (approx. 18 months) when they moved to the B(1) and B(2) Street, Suburb C property.
(b)The Husband and Wife jointly purchased a property from the Wife’s parents in around 2001 for $172,500. Her parents had purchased the property as an investment in 1999 for that price. She argues that at the time of the transfer the property was actually valued at $200,000 as confirmed in a letter from R Lawyers, the lawyers who acted on the transfer.[3]
(c)She played an active role in the renovations of the H Street, Suburb J property. She paid contractors, made decisions about decorations and for a time managed the renovations on a day to day basis.
[3] Exhibit B to Affidavit of Ms Diab filed 27 February 2020, page 40.
The Husband submits that he:
(d)Worked full-time during the marriage and sometimes derived additional income from paid jobs. In addition he completed a Master’s degree which he says improved his employment options.
(e)Took responsibility for the development of the B(1) and B(2) Street, Suburb C property and was the owner builder of the dual occupancy development.
(f)Completed repairs, renovations and improvements to the three properties owned by the parties.
(g)Accepts that the maternal family allowed the parties to stay with them rent free from the time of their marriage until 2001 but says this was offset when he and the Wife provided accommodation to the maternal family (including 2 children) for approximately one year.
Contributions made by the parties to the welfare of the family including as homemaker
The Wife was primarily responsible for the homemaking and parental duties during the marriage. She performed the majority of the domestic duties including caring for the children and driving the Husband and children to and from work, school and other activities.
The Husband submits that when he was not working he spent time with the children and provided educational tuition. He says that on several occasions during the marriage when the Wife was hospitalised or incapacitated he cared for the children.
Conclusion on contributions throughout the marriage
Evidence was given throughout the matter of the difficulties that arose between the maternal and paternal families. The Husband and Wife provided support to extended family members and equally they were the recipients of various forms of support in return. This included: housing members of the maternal and paternal family throughout the marriage, and receiving assistance with childcare, motor vehicles and meals from the maternal family. I accept the Husband’s argument that the contributions made by the maternal family were offset by the support and contributions towards them by the Husband and Wife.
While I accept that the transfer price for B(1) and B(2) Street, Suburb C appeared lower than market value, I am not satisfied that an adjustment should be made in the Wife’s favour to recognise this.
The parties both worked hard during the marriage to support their family and their wealth acquisition in different ways. Overall, taking a holistic view of the whole of the contributions of the parties from the date of their marriage, I find that their contributions were equal.
Post separation contributions
There is contention between the parties about their post separation contributions.
The Wife submits that post separation she endured financial hardship and stress arising from the Husband’s conduct:
(a)He cancelled her credit card and mobile telephone without notice to her in October 2015.
(b)In 2016 the Wife was involved in a car accident leaving her without a car for herself and the children. The Husband directed the insurance company to release the payout of $16,000 in equal shares, rather than wholly to the Wife. She says she utilised the $8,000 to meet her day to day expenses. She and the children have relied upon a motor vehicle provided by the maternal grandfather since then.
(c)At separation the three children were attending private school and the parties had fees of $9,739 outstanding. The schools would not allow the children to be re-enrolled in 2017, and lengthy correspondence passed between the parties on a resolution of the issue – particularly the Wife’s repeated request to the Husband that the rental monies sitting in trust be released for that purpose. The children ultimately changed schools with the Husband paying some of the fees. The Wife was understandably concerned about the impact these events had on the children.
(d)She raised the children without any practical assistance from the Husband.
(e)She lived with her three children in the maternal grandparent’s home and shared a bed with her youngest child because she was unable to afford rental accommodation elsewhere.
The Wife also argues that she has made a greater financial contribution post separation due to the active role she has played in arranging for the sub-division of the B(1) and B(2) Street, Suburb C property. The Wife arranged for her brother to loan money to assist and she has been the party primarily responsible for liaising with lawyers, surveyors, Suburb S City Council and valuers. She gives evidence in her affidavit that as a result of her contribution towards the sub-division there will potentially be an additional $120,000 available to the parties. The Husband conceded in cross-examination that he did not support sub-division because he wanted to support a reconciliation.
The Husband submits that post separation he made additional financial contributions totalling $164,910.80.
(a)He estimates paying $49,682 in mortgage repayments for the H Street, Suburb J property between November 2015 and its sale in September 2017.
(b)He incurred expenses arising from the difference between the rental received and the repayments on the CBA mortgage account and the Viridian line of credit. He estimates these expenses total $47,329.
(c)He incurred expenses when finalising the renovations of H Street, Suburb J prior to its sale. He annexes invoices totalling $36,258.80. The Wife argues that some of these expenses were paid for during cohabitation or not at all. It is noted that the Husband was assisted by the $12,000 withdrawn from the party’s joint CBA account.
(d)He says that he paid all ongoing expenses for the H Street, Suburb J and B(1) and B(2) Street, Suburb C properties since separation including rates, insurance and utility expenses.
Since separation the Husband has had the benefit of:
(a)Living rent-free first in the H Street, Suburb J property and later in the B(1) and B(2) Street, Suburb C property (a 5 bedroom and 3 bathroom residence).
(b)$8,000 from the insurance payout for the Wife’s motor vehicle.
(c)The sum of $12,000 withdrawn from the parties’ joint CBA account.
(d)Rental from B(1) and B(2) Street, Suburb C property - in 2015 he directed the managing agent of the B(1) and B(2) Street, Suburb C property to pay the rental into his personal account. The Wife estimates he received $1,300. At the intervention of the Wife the rental was ultimately redirected to the Managing agent’s trust account.
(e)The Motor Vehicle 2 and its proceeds of sale. This vehicle was purchased in 2014 for $40,000 by drawing down on the Viridian line of credit. The Wife gave evidence that a friend of the Husband ‘Ms T’ had listed the car for sale at $18,000 in February 2020.[4] The Husband gave evidence that he sold the motor vehicle for $5,000.
(f)The household contents of B(1) and B(2) Street, Suburb C and proceeds of sale. The Wife gave evidence that Ms T had listed matrimonial furniture for sale on Facebook Marketplace.[5] The Husband gave evidence that it was given away.
(g)The early release of $20,000 to him from Super Fund E which was unaccounted for, except to say it was applied towards living expenses.
[4] Exhibit X to Affidavit of Ms Diab filed 27 February 2020, page 126.
[5] Ibid.
Conclusion on post-separation contributions
I will not make an adjustment in the Husband’s favour for the following reasons:
(a)I did not find the Husband’s evidence on and accounting for the post separation contributions credible and I prefer the evidence of the Wife on these issues.
(b)The Husband has enjoyed the benefit of rent free accommodation since separation in both H Street, Suburb J and in more recent times, the newly renovated B(1) and B(2) Street, Suburb C property. During cross-examination he kept repeating that he had been living in the “matrimonial home” as if this gave him some entitlement. Meanwhile the Wife and their three children have been living in challenging circumstances with the maternal grandparents for almost 5 years. When the total loan repayments are aggregated from the date of separation until now, they are commensurate with the rental that the Husband would have paid, but for him occupying these properties. Indeed the parties would have been better off had they been rented.
(c)Even if I were to accept that the Husband did expend $36,258 on renovations to H Street, Suburb J post separation, I find that he used funds acquired by the parties during the marriage to meet these costs. This includes the $12,000 withdrawn from the line of credit, the rent of $1,300 retained, the $8,000 insurance payout and the proceeds of sale of the Motor Vehicle 2.
(d)The Husband demonstrated in his actions post separation that he was intent on punishing the Wife for the separation. I did not find him to be a reliable witness. I accept the contention by the Wife that he was not full and frank in his financial disclosure. The early release of $20,000 from his superannuation is an example of this. I cannot make a finding on the actual money received by the Husband upon the sale of the Motor Vehicle 2, and I accept that the transfer records a sale price of $5,000. However, I remain unconvinced that the Husband has disclosed the full circumstances surrounding his financial dealings post separation.
I find that post separation the contributions of the parties favour the wife. She has not received the benefit of any matrimonial assets since separation except for the $8,000 insurance payout which I accept was used to meet debts and other expenses.
Overall conclusion on contributions
Taking into account all of the above I find that a 2.5% adjustment is to be made in favour of the Wife for these contributions. The Court is satisfied that this is an appropriate recognition of the Wife’s post-separation contributions in circumstances where the Husband remained in occupation of the matrimonial home.
This will provide the Wife with a division of 52.5% and the husband with a division of 47.5% of the matrimonial asset pool.
SECTION 75(2) – DOMESTIC VIOLENCE
When considering an order under s 79 of the Act, the Court may have regard to s 75(2) factors pursuant to s 79(4)(e).
Allegations of domestic violence perpetrated by the mother
Another aspect of the case is Wife’s allegation of family violence.
She gave evidence that she was a victim of coercive and controlling conduct by the Husband. This particularly related to the Husband’s control of her expenditure during the marriage.
She also alleged that she had been subjected to significant verbal, emotional and physical abuse. She relies on COPS reports that show that the Police had attended at the home on several occasions (November 2010, August 2013) although no action had been taken.
She alleges that the children also witnessed their Father’s anger. In July 2015 during a family holiday to Town U, Ms G hid from the Father in a toilet and he broke the door to reach her.
The Wife’s brother, Mr K, gave credible evidence about family violence that he had observed in 2003. He also recalled in 2003 seeing bruises on the Wife’s arms and a red mark on her face. He recalled the Wife had alleged that she had been kicked and slapped by the Husband.
Finding on Family Violence
The Wife’s legal representative submitted that the family violence suffered by the Wife should result in an adjustment of the division of the property pool in favour of the Wife.
I accept the evidence of the Wife and Mr K on the family violence incidents.
The issues between the parties appear to have often been further complicated by the involvement of family members and the church community. The Wife is critical of the Husband for denigrating her to the church community to the extent that she changed churches. I have no doubt that it was a household with a high level of conflict both between the parties and between the Husband and the children. The tension was further exacerbated by the involvement of members of the church and immediate family in the matrimonial conflicts.
I accept that the Husband has engaged in conduct towards the Wife and children which fits the definition of family violence and that the violence has had a significant impact on the Wife. I also accept that the Wife has been deeply upset by the Husband’s conduct.
Adjustment of property due to family violence
The issue for the Court is whether family violence referred to by the Wife should result in some adjustment in relation to the division of property between the parties. In Kennon &Kennon [1997] FLC 92-757 (“Kennon”) the Full Court stated at 84-924:
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party's contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s 79. We prefer this approach to the concept of “negative contributions” which is sometimes referred to in this discussion.
In S & S [2003] FamCA 905 the Full Court stated at [47]:
As Kennon has established, it is necessary to provide evidence to establish:
•The incidence of domestic violence;
•The effect of domestic violence; and
•Evidence to enable the court to quantify the effect of that violence upon the parties capacity to “contribute” as defined by section 79(4).
I was directed to the case of Kucera & Kucera [2009] FMCAfam 1032 to support the contention that the principles in Kennon extend to matters where family violence towards children can be conduct that renders the contributions of the Wife more onerous.
In this case no evidence has been called by the Wife that the family violence made her contributions more onerous. Neither was evidence given that made it possible to quantify the effect of the violence upon her capacity to contribute.
I accept that the Court can infer from appropriate evidence that there is a nexus between the family violence and the impact that has on the victim’s ability to make contributions: Britt v Britt [2017] FamCAFC 27 at [74].
Having regard to the authorities I was referred to by counsel for the Wife, I do not intend to make any adjustment resulting from this aspect of the Wife’s claim.
FUTURE NEEDS
The Husband is 46 years old.
Before coming to Australia he was employed in Country F as a manager. Since his arrival in Australia in 2000 he was employed on a reasonably continuous full-time basis in senior roles until 2020. He was awarded a Masters Degree in around 2004. For 12 years during the marriage he undertook work on a part-time basis as a public servant. He appears to have advertised his services as a public servant in recent times although says he is not working in this capacity.
While he has not re-partnered, he appears to enjoy a serious relationship with Ms T, who he has travelled internationally with.
He relied on the affidavit of Mr N, a forensic psychiatrist. He gave evidence that the Husband reported experiencing anxiety and depression which may impact on his vocational and social functioning.[6] He was also of the view that the final outcome of the court proceedings would most likely see his stress levels and therefore adjustment disorder resolve.
[6] Affidavit of Mr N filed 24 March 2021, page 10.
The Wife is 44 years old. She has not engaged in paid employment since the marriage. She did not complete a university education. She is residing with the children in her parent’s home.
The three children of the marriage continue to live with the Wife although only X (aged 16) and Y (aged 14) are dependent on her. The children spend no time with their father. The Wife has, and continues to be the primary carer for the children and meets their long term needs including payment for private school fees, extracurricular activities and medical expenses. Since the Husband’s unemployment in 2000, the Wife receives child-support of $16 per fortnight from him.
As the balance sheet indicates there is sufficient property and superannuation in the pool for the parties to each enjoy a reasonable standard of living.
I was directed by the parties to consider a range of matters under section 75(2)(o) on the basis the justice of the case required it.
It was the Husband’s case that he was put to the expense of instructing his lawyers and filing an interim application in September 2020 seeking for arrears to be paid, and thereby preserving the matrimonial assets.
In final submissions a concession was made that while the Husband had (at paragraph 134 of his Affidavit) sought “add-backs” totalling contributions of $164,910.80, section 75(2)(o) was a more appropriate way to deal with them.
The Wife argues that the Husband has deliberately misled the court and the Wife as to his financial position. Some of the examples asserted were:
(a)In 2020 he accessed $20,000 from his superannuation to meet his living expenses. This was only discovered via a discovery process. He said under cross-examination that he did not disclose it because he was allowed to access it as a result of a change to government policy because “everyone who was getting Jobseeker did it”. He said he used it for living expenses.
(b)As outlined earlier, it was not clear what happened to the proceeds of sale of his motor vehicle. I find his evidence on the sale for $5,000 unreliable.
(c)And then there was uncertainty about the sum of $55,000 withdrawn from his bank account on 4 and 5 September 2019. The Husband deposed a personal loan of $55,000 in his Financial Statements sworn on 3 September 2019 and 28 March 2021. Under cross-examination he said he owed this amount to his friend, Mr V. He was asked about the withdrawal of a total of $55,000 and how it coincided with him deposing in his Financial Statement dated 3 September 2019 a balance of $2,500 in that account. He said he was repaying Mr V. He said the loan still appeared on the Financial Statement sworn on 28 March 2021 because he had re-borrowed money from him. His answers to this matter were unsatisfactory. Whilst I was not asked to include the alleged loan in the parties joint balance sheet, I accept the Wife’s argument that the Husband misled her and the Court as to his financial position. The Husband was unable to offer any other explanation for the withdrawal or whereabouts of $55,000 from his account on 4 and 5 September 2019.
Conclusion on future needs
I find that the Husband has capacity for employment. Now that these proceedings have been concluded and the international interruptions caused to businesses during COVID-19 are easing, I would expect that he will be much better placed to resume appropriate employment and commence rebuilding his financial position.
The prospects of the Wife re-entering the workforce are limited and in any event she wishes to continue her role as parent to the children still in her care.
I do not make an adjustment in favour of the Husband under section 75(2)(o) as sought by his Counsel for the reasons set out earlier in the conclusions reached about post separation contributions.
I find that the Husband has not been honest with the Court as to his financial circumstances. I find that he mostly likely has financial resources at his disposal that he has not disclosed.
I find that it is appropriate for an adjustment to be made in favour of the Wife for future needs in the sum of 10%.
This will provide the Wife with a division of 62.5% and the Husband with a division of 37.5%% of the matrimonial asset pool.
JUST AND EQUITABLE
I find given the history of this matter, the size of the pool and the Husband’s ability to move forward from hereon in to re-establish himself, as opposed to the Wife that has limited opportunities, that it is just and equitable for the Wife to receive a further 2.5% of the matrimonial pool.
This will enable the Wife to financially re-establish herself by having monies to rehouse herself and the children, and providing her with some superannuation for future security.
The Husband has sufficient working years to accumulate more superannuation for his future security while the Wife does not have this.
I, therefore, find that the Wife is to receive 65% of the net matrimonial property pool and the Husband to receive 35% of the matrimonial property pool.
The issue then is how that is to be achieved. There is a property pool of $1,336,695 for distribution (excluding superannuation).
105 Assets
Description
Agreed value
1. B(1) Street, Suburb C E $660,000 2. B(2) Street, Suburb C E $990,000 3. Sale proceeds of H Street, Suburb J $22,553 TOTAL ASSETS $1,672,553 Liabilities Description Agreed value 4. Mortgage to Commonwealth Bank of Australia $233,858 5. CBA Veridian Line of Credit Account #...53 E $102,000 TOTAL LIABILITIES $335,858 TOTAL NET $1,336,695
Description Agreed Value 6. Super Fund E $243,848 TOTAL MATRIMONIAL POOL VALUE $1,580,543
Orders were made on 14 December 2020 that effectively set out the mechanical provisions upon the sale of B(1) and B(2) Street, Suburb C [Orders 10(i) – (iv)]. I order that the balance of the sale proceeds of B(1) and B(2) Street, Suburb C be distributed such that the Wife receives 65% and the Husband the remaining 35%.
I find that the Wife is to receive 65% of the net proceeds of sale of H Street, Suburb J (now sitting in the Stamford Law Trust Account) and the Husband the remaining 35%.
This will result in the Husband receiving 35% of the matrimonial pool estimated to be worth approximately $467,843.25
In relation to the parties’ superannuation entitlements, I find that the considerations that led me to find an overall contribution entitlement of 65% to the Wife and 35% per cent to the Husband do not apply in the same way to their superannuation entitlements, particularly those matters arising from section 75(2)(o). Both parties are also well below the age at which they can access their superannuation entitlements. The Husband has also made a further post separation contribution. I find that an appropriate division of the parties’ superannuation entitlements is on the basis of 55% to the Wife and 45% to the Husband. That finding necessitates a superannuation splitting order from the Husband’s Super Fund E so that the Wife receives 55% of the total superannuation entitlements of the Husband.
Accordingly, I make the orders as set out at the start of these reasons.
I certify that the preceding one hundred and ten (110) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Beckhouse. Associate:
Dated: 27 May 2021
Key Legal Topics
Areas of Law
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Family Law
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Property Law
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Jurisdiction
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Statutory Construction
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