Dodson and Dodson
[2018] FCCA 175
•29 January 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DODSON & DODSON | [2018] FCCA 175 |
| Catchwords: FAMILY LAW – Property – eight year relationship – separation five years ago – post separation contributions – Kennon argument – admissibility of evidence. |
| Legislation: Family Law Act 1975, ss.106A, 79, 79(4), 79(2), 75(2) |
| Cases cited: Kennon & Kennon (1997) FLC 92-75 Scott & Scott [2015] FCCA 2394 Makita (Aust) Pty Ltd v Sprowles [2001] 52 NSWLR 705 Dasreef Pty Ltd v Hawchar (2011) 277 ALR 611 Stanford & Stanford (2012) 247 CLR 108 Other: |
| Applicant: | MS DODSON |
| Respondent: | MR DODSON |
| File Number: | MLC 3985 of 2014 |
| Judgment of: | Judge Harland |
| Hearing dates: | 19 & 20 September and 8 November 2017 |
| Date of Last Submission: | 8 November 2017 |
| Delivered at: | Melbourne |
| Delivered on: | 29 January 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Barton |
| Solicitors for the Applicant: | John V Hayes & Co Pty Ltd |
| Counsel for the Respondent: | Mr Goussis |
| Solicitors for the Respondent: | Gary March Legal |
ORDERS
Within 30 days of the date of these orders the husband shall do all acts and things and sign all documents necessary to discharge the debt owing to (omitted) Pty Ltd (ACN (omitted)) (“(omitted) Pty Ltd”) and thereafter shall do all acts and things to cause the caveat registered by (omitted) Pty Ltd against the property situated at and known as Property A, in the State of Victoria being the whole of the land contained in folio identifier Volume (omitted) Folio (omitted) Lot No. (omitted) (“the property”) to be removed.
Within 60 days from the date of these orders the parties shall do all such things and execute all documents necessary to transfer the property to the sole name of the wife, at the wife’s cost; and
Simultaneously with the transfer pursuant to order 2 above the wife shall pay all monies necessary to discharge and remove all mortgages, charges, encumbrances and all other liabilities, whether in law or equity for which the husband bears any actual or contingent liability at the date of these orders.
Simultaneously with the transfer pursuant to order 2 and performance of the obligations set out in order 3, the wife shall pay to the husband the sum of $107,625.
The wife shall indemnify and keep indemnified the husband in respect of all liabilities in relation to the property whenever and however arising.
Pending transfer of the property provided for in order 2 the wife shall be responsible for all mortgage payments, statutory rates and charges, other utilities, insurances, outgoings and expenses in relation to the property incurred prior to the date of transfer and shall make all such payments as and when they fall due and hereby indemnifies the other party in respect of all other liabilities incurred prior to the date of transfer.
That in the event that the property has not been transferred and payment made in compliance with orders 2 and 4 then within a further 14 days each party shall do all things necessary to cause the property to be sold by private treaty or auction as may be recommended by the agent appointed by the parties at the earliest possible date at a price to be agreed between the parties and failing such agreement to be determined by the President of the Victoria Division of the Australian Property Institute or his/her nominee and that the proceeds of sale shall be disbursed as follows and in that priority:
(a)In payment of agents commission, advertising expenses, conveyancing adjustments and legal expenses of the sale;
(b)In payment of costs incurred in relation to the nomination of a real estate agent (if any), in payment of costs incurred in relation to the nomination of a solicitor (if any) and in payment of costs in relation to determination of value or selling price by the President of the Victoria Division of the Australian Property Institute or his/her nominee (if any);
(c)Discharge of all mortgages secured on title;
(d)The net balance then to be divided as to 62.5% to the wife and 37.5% to the husband.
That unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or any subsequent orders each of the husband and the wife shall be and hereby are declared to be the sole and absolute owners at law and in equity of:
(a)all items of furniture, furnishings, personalty, chattels and jewellery;
(b)all monies (whether held in cash or in deposit with any financial institution);
(c)any motor vehicle;
(d)all contributions to or benefits or entitlements arising from membership of any fund of insurance or superannuation whether such interest be present, contingent or expectant;
in the possession, custody or control or each or in which either has an interest which are not otherwise dealt with in these orders.
That unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders;
(b)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
That in the event that either party should fail, neglect or refuse to sign or execute any deed, document or instrument required by or to give effect to these Orders then pursuant to section 106A of the Family Law Act 1975 that the Registrar of the Federal Circuit Court of Australia, Melbourne Registry shall be and is hereby authorised, empowered and directed to sign and execute such deed, document or instrument in the place and instead of such party and to thereafter do all things and acts as are necessary to give validity and operation to same.
IT IS NOTED that publication of this judgment under the pseudonym Dodson & Dodson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 3985 of 2014
| MS DODSON |
Applicant
And
| MR DODSON |
Respondent
REASONS FOR JUDGMENT
The parties were able to settle the parenting issues on the first day of the final hearing with the assistance of the Independent Children’s Lawyer. They have been unable to resolve their property issues.
The wife relied on her trial affidavit and the affidavit of her brother Mr M. The wife and her brother were cross-examined.
The husband relied on his trial affidavit and the affidavit of his de facto partner. Both were cross-examined.
Both parties are from (country omitted). The parties married on (omitted) 2005. They separated on either 24 February 2013 (according to the husband’s affidavit) or 25 February 2013 (according to the wife’s affidavit).
The parties have two children; X born (omitted) 2007, aged 10, and Y born (omitted) 2010, aged seven.
The wife lives in the former matrimonial home with the children. The wife seeks to retain the home. She says this will provide stability for the children.
The husband repartnered shortly after the end of the relationship. He has been living with his de facto partner since April 2014. They have three young children together.
Both parties complain that the other has failed to comply with their disclosure obligations.
Contributions
The wife says that when they married she had savings of $7,000 from working full-time. She says the husband did not have savings. The husband says he had savings of about $3,500 and otherwise the parties did not have any assets or liabilities.
The parties lived with the wife’s parents for two years at the beginning of the relationship and for another year whilst they were waiting for the house to be constructed at Property A in 2009. The wife says that they did not pay rent to her parents or any of the expenses.
The husband says he engaged a builder to build the house to lock-up stage. He said he helped as much as he could rather than paying someone else to do the work.
The wife agreed that the husband worked on the former matrimonial home on weekends. She said her parents assisted as well by providing them with rent free accommodation. She denied the husband’s assertion that they paid board to her parents. She agreed that her brother and sister live with her parents. She says only her brother pays board.
When the parties separated the mortgage was approximately $278,000.
The husband worked throughout the marriage in various jobs which he refers to in his trial affidavit. He has a (omitted) business which he runs through the Dodson Family Trust. He set up this trust with his de facto partner in mid-2014. He and his de facto partner are the trustees. During the marriage he ran the business though the Dodson Family Trust. His company (business omitted) was the Trustee.
The husband annexes some financial documents to his affidavit that show his taxable income in the year ending 30 June 2012 as $20,141 and $21,502 for the year ending 30 June 2013. His taxable income for the year ending 30 June 2016 was $31,658. He also annexes trust tax returns. The financial statement for the Dodson Family Trust shows the total income of $69,762.73 in net profit after expenses of $27,775.84.
The husband led evidence that he paid board to the wife’s parents when they lived with them. I do not accept the husband’s evidence.
The husband also claimed that he provided the wife $10,000 at separation. I do not accept this evidence as it could have easily been proven by documents had the husband wished to do so.
Post separation contributions
The wife has made all the mortgage repayments since separation. When the parties separated the mortgage was approximately $278,000. The wife has paid the mortgage in the sum of $2,056 a month since January 2017.
The mortgage is now $233,000. The wife and the children have continued to live there.
In her trial affidavit the wife claims that she borrowed $30,000 from her parents for the children’s expenses. The wife does not provide any evidence of this. Neither of her parents are witnesses in the case. I note that she did not include this amount in the assets, liabilities and resources table in her further amended case outline. Nor was it addressed at trial.
The husband moved into rental accommodation with his de facto partner in April 2013. They now have three young children.
When the parties separated they had a Mazda. The wife drove it until it was repossessed due to the finance payments not being kept up. The husband says he continued to pay the lease payments on the Mazda car the wife was driving until December 2013. The husband said he could not afford to keep up the payments and as a result the car was repossessed. Conveniently, the husband’s de facto paid the amount required for reinstatement being approximately $4,000 to retrieve the car. The husband’s de facto partner says the car is in her name but that she is not responsible for the finance. She says the husband makes those payments. The husband also claims that the car is in his de facto partner’s name but the finance is still in his name. He has annexed a statement from the (omitted) bank dated 5 September 2017 which refers to the closing balance of $8,535.43. Presumably this is with respect to the finance on the car though it is unclear. It is not possible to tell whether or not the Mazda car is claimed as an expense of the business.
The husband has paid a modest amount of child support since separation. He is currently assessed to pay $32 a month. The wife says she has received approximately $1,000 in child support from the husband since separation.
Counsel for the wife suggested to the husband that his financial statements sworn in 2014 and 2017 show that he is in a stronger financial position now than he was in 2014. He said it is necessary to factor in that he has to financially support his family.
The husband claimed in his trial affidavit that he and his de facto partner had seen the wife working in (omitted) 2013 in (employer omitted) and on (omitted) 2014 (employment omitted). When cross examined, the husband conceded that it was only his de facto partner who saw the wife on those two occasions.
The husband’s de facto partner
The husband’s de facto partner, Ms L gave evidence that she receives $650 a week in parenting payments from Centrelink. The husband recorded it as $531 a week on his financial statement. She says that is her only source of income.
She also claims she and the husband saw the wife working in (employer omitted) in (omitted) 2013 and working for a (employer omitted) in 2014. The wife denies working at (employer omitted). The wife said she is a friend of the (employer omitted). The de facto partner only saw the wife those two times. I am not satisfied that the wife was working and not declaring it. As it turns out it was only the de facto partner who saw her, not the husband as he referred to in his affidavit. I do not accept that evidence. At its highest the two are isolated incidents which occurred several years ago.
She says that the Mazda is her car and that she paid $4,000 when it was repossessed. She believes the finance is about $8,000. She says the husband still pays that. She said he pays for it because it is his liability.
Family Violence
The wife argues that she was subjected to verbal and physical violence throughout the marriage. She seeks an additional 10% adjustment relying on the decision of Kennon & Kennon (1997) FLC 92-75 (“Kennon”).
The wife says that the husband was regularly verbally and physically abusive. The husband says it was the wife who was verbally abusive to him, that they argued frequently as they were not suited to each other and they argued about money.
The wife describes in her affidavit an incident in February 2013 when she says their oldest child X was hurt when she tried to prevent the husband from hitting the wife and the husband pushed X against the couch.
The wife alleges that she suffered two miscarriages because of the husband’s violence. She does not provide details of the incident or any medical evidence. This evidence is inadmissible and I place no weight on it.
The wife also describes the husband as being controlling about money. She says he paid for the mortgage but no other expenses and she had to use the money she received from Centrelink to pay for the other expenses.
The husband denies being verbally or physically abusive apart from a concession about one incident. At [78] of the husband’s trial affidavit, he says that on one occasion he became frustrated and lost his temper in early 2012. He said he and the wife agreed to go to (countries omitted) to visit family and friends in the middle of the year but that after he purchased tickets the wife told him she had changed her mind. He felt frustrated because he paid for the tickets. He says “we argued, and in frustration, I lost my temper and punched a wall and broke a small table.” He further says “I regret my behaviour that day but, fortunately, the children were asleep in their bedrooms at the time”. The children may well have been woken up by that disturbance and have been frightened. The children do no need to have witnessed the violence directly to be negatively affected by it.[1]
[1] See Family Court of Australia and Federal Circuit Court of Australia, Family Violence Best Practice Principles, 4th edition, December 2016
At [54] of her trial affidavit the wife says that the husband’s ‘daily aggression’ made it hard for her to carry out her part time work in an (employer omitted) because of her fear. She said that the husband’s “attitude has made any contributions that I have tried to make more onerous.” This is a conclusion, not evidence.
The wife says the parties separated after the husband came home from work on 25 February 2013 and he became upset when he saw that dinner was not ready. They argued. The wife says Y started to cry and she took her upstairs. As she did so, the husband started pulling the wife’s hair and dragging her down the staircase. The wife says she was fearful that the violence would escalate so she put the children in the car and drove away. As she drove away the husband threw her shoes at the windscreen. She obtained an intervention order, which the husband agreed to without admissions, for a period of one year. The children were named on the order together with the wife and the application was taken out by police.
Counsel for the husband cross-examined the wife about her allegations of family violence and put to her that she did not seek counselling or inform the police of the violence. He suggested that she stopped work because she was seven months pregnant and not because of any violence. He also suggested to the wife that her affidavit lacked significant detail about the violence.
Exhibit A is an extract of the remote application to the family violence safety notice issued against the husband in favour of the wife and children. The wife was cross-examined about this. In the statement of reasons of issuing, the notice referred to the husband and wife having regular verbal arguments about the husband’s work commitments and family problems but made no mention of any physical violence apart from the incident on 25 February 2013.
The wife was cross-examined about what she told the family report writer at paragraphs 22 to 24 of the family report dated 17 January 2017. She told the family report writer that she did not disclose the violence in the previous reports because she was trying to leave it behind. She also told the family report writer that the husband has assaulted her and X “millions of times”. When Counsel for the husband asked her why she had not included such details in her affidavit, she replied “is it up to me to say millions of times?”
During cross examination, it was suggested to the wife that she did not make any disclosures of family violence to the report writer in 2014. The wife responded that she was trying to leave things behind and forget what happened.
The fact that someone who has been subject to family violence does not disclose it early in proceedings and does not report it contemporaneously to police, doctors, or her family does not lead to an automatic conclusion that it is recent invention. Of course this is not uncommon. Family violence takes place in private.[2] In fact, the nature of family violence is such that it is common for people not to report it and not to have corroborating evidence.
[2] See Family Court of Australia and Federal Circuit Court of Australia, Family Violence Best Practice Principles, 4th edition, December 2016
However, it is of concern that the wife tells the family report writer that X was “bashed in the face” by the husband and that she was knocked unconscious by the husband, waking up when X threw water in her face. These are significant events which are not addressed in her affidavit which was prepared several months after the family report was released. The wife was defensive and argumentative at times when giving her evidence.
The wife’s brother says that he saw the husband strike the wife hundreds of times in front of him and others. I find this hard to believe as he went on to say he did nothing about it. He said he recalls seeing him hit her in front of the children on one occasion but cannot remember the details of all the occasions. He said he did not provide detail in his affidavit because they were tired of going to police and talking about it. There is no evidence that he ever went to the police about it. When cross-examined further he said he did not go to the police because he was working 20 hours a day. The difficulty with the brother’s evidence is also the fact that his sister helped him with his affidavit and translated it for him. His evidence about the violence was inconsistent and not credible.
The husband denies the wife’s version of events. The husband denies getting angry at the wife if dinner was not ready. He says that when he returned home he was tired after working all day and had not eaten anything and he asked if the wife had made anything for him to eat. She told him she had not and she was taking the children to her parents’ house. He says he told her that she could leave if she wanted to but the children would stay at home. They argued for about 10 minutes. He claims that the children were upstairs in their bedrooms throughout the argument. Again he says that in frustration he threw a shoe towards the wife but it did not hit her or the car.
Counsel for the wife suggested to the husband that he admitted that he punched walls. The husband denied punching the wall and said he did not remember hitting the wall and creating a hole. He also denied getting angry at X and said that his children are his life. The husband denied pushing X onto the couch. He said he picked her up and placed her on the couch. He denied telling the report writer that he placed her firmly on the couch. He denied punching X.
He denied hitting the wife, rendering her unconscious, and X having to pour water on her to wake up.
He also denied causing the miscarriages and said that medical reports show that. He also denied hitting his wife in front of her family. He conceded that at times there were verbal arguments. He also denied the wife’s version of events with respect to the separation and denied pulling her hair. He disagreed that he threw the pair of shoes and said “take your shoes too”. He said he did not think they would reach the window.
He admitted that a personal safety order was taken out against him by police with respect to the person he was doing business with. He said they agreed to the intervention orders against each other and the fine was recorded as $750.
Incident at the family home on 14 September 2017
The wife alleges that there was an incidence of family violence at the former matrimonial home when the valuer Mr P (“the valuer”) attended the home with the husband. He was called to give evidence on that topic.
This matter was before me on 11 September 2017 with respect to the husband’s application in a case, the wife’s response, and an objection to a subpoena. I made orders permitting the husband to obtain a valuation of the former matrimonial home at his own expense and that he be permitted to attend the home for that purpose.
The wife gave evidence that she left work and arrived home at 12:00pm to let the valuer in the house. She says she saw the husband driving up and down the street in his car. Her sister was also present. The wife says she said that her dog was in the backyard and the back roller door of the garage could not be opened. She says husband walked straight into the garage and tried to open the back roller door. She asked him not to as the dog was in the backyard and would run away if it was opened. The backyard can also be accessed from the main house.
The wife says the husband grabbed her on her left arm using his right arm and pushed her against the wall. She says her sister got in the middle and the valuer said that they needed to get the valuation done. The wife says the husband screamed at her to leave and that she told him to behave or she would call the police. She said the appointment had been arranged through the respective solicitors and that she was the only one with access to the remotes.
The valuer was called to give evidence about the incident at the family home. He described the incident as being ‘verbal fisticuffs’ where one party wanted the back roller door open and the other did not. He did not see the husband grab the wife. He was focused on carrying out the valuation. He could not recall hearing the wife or her sister saying she was going to call the police. He said the incident could have happened but he did not see it.
I granted leave for the wife’s sister to be called to give evidence with respect to the incident only as she was present at the time. She said the wife asked her to come to the home to support her as her ex-husband was going to be there. She said once everyone arrived the wife went in first, then the valuer, then her, and then the husband walked in and went straight to the back roller door. She heard the wife tell him not to open the door as the dog was outside and he would run out. He was at the door to open it and the wife approached him. The door had opened a little bit and the wife pushed the door back down saying “I just told you not to open it”. She says that husband grabbed her with his right hand and said “you weren’t meant to be here today. This is my valuation give me space” She says she was facing both of them and the valuer was next to her and the husband got a bit aggressive. She says she stood in the middle and said “you need to walk away” and the valuer said to the husband “let me take you round. You don’t need to talk to each other. I need to do my job.” The sister said that the valuer could see everything. She said that the husband pushed her sister against the brick wall next to the roller door.
The husband was cross-examined about the incident. He says that when the wife told him not open the door as the dog would run out he stopped and stepped back. He says that the wife then instigated a verbal argument with him. The husband had no need to go straight to the back door and touch anything. He was there so he could consult with the valuer and see the defects.
The husband denies pushing the wife and says he did not hear the wife mentioning calling the police. The husband denied rushing to the back roller door as he came in. He said he asked the valuer about where to start inspection. He denied that this was an example of his controlling behaviour.
Whilst I am satisfied that the husband and wife argued, having heard the evidence of all the witnesses about the incident, I am unable to make a finding that it amount to an instance of family violence.
Conclusions about family violence
The wife seeks an adjustment in her favour taking into account the family violence and relies on the Full Court of the Family Court of Australia (“Full Court”) decision of Kennon. The Full Court said:
[O]ur view is that where there is a course of violent conduct by one party toward the other during the marriage which is demonstrated to have had a significant adverse impact on 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 s79.
The comments I made in Scott & Scott [2015] FCCA 2394 (“Scott & Scott”) are relevant here. In that case I was satisfied that the wife had been subjected to family violence by the husband but the wife’s evidence did not show her contributions were made more arduous by the husband’s violence.
As I observed in Scott & Scott, the Court is not entitled to assume that the husband’s violence has made her contributions more arduous. This has been made clear by the Full Court. The comments in the Full Court unreported decision of S & S [2003] FamCA 905 are also applicable here:
[40] There is no doubt that domestic violence may be a relevant factor in assessing contribution. The difficulty as presented in this case and many others is that inadequate evidence makes a proper assessment by the trial Judge either very difficult or impossible.
…
[47] An insufficiency of evidence in the present case leaves the Court with a limited ability to deal with allegations in the context of section 79 proceedings. 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).
[48] We do not agree that the evidence in this case could properly have led to an adjustment pursuant to section 79. There was no suggestion by counsel of the wife that his Honour did not correctly summarise the evidence in relation to this topic. The particular deficiency apart from those referred to by the trial Judge is the complete absence of evidence as to how the husband’s conduct affected her ability to contribute.
In the current case I am satisfied that there were instances of family violence but I am not satisfied that the wife has established that this impacted on her contributions. The bar set by Kennon is high. The wife has not reached it.
Alleged loan to wife’s brother
The wife says she owes her brother $92,500 for mortgage repayments he made on the home on her behalf from April 2013 to December 2016. She has paid the mortgage since January 2017. She seeks to include this as a matrimonial debt.
The wife’s brother swore an affidavit. He did not prepare his affidavit with the assistance of an accredited interpreter. He gave evidence that his sister helped him with his affidavit and interpreted it to him. Less weight can be placed on his affidavit because of this.
The wife says they had a verbal agreement in April 2013 which her brother later put into a letter. The wife gave evidence that the first few payments came from the brother’s business account but after that came from his personal bank account. She says the terms of the loan are that she will pay him back. She says she is going to pay interest as well.
The wife agreed that she had not communicated with the husband about the advances. She says they could not communicate because of the intervention order. The wife says the mortgage is in both names and the loan is too. The wife said the husband was aware of it because she has provided her bank statements to him. She said she needed to borrow the money as she needed to provide the children with a roof over their head.
Annexure EDT-7 of the wife’s trial affidavit and is a letter from a (business omitted) to her dated 20 May 2014 signed by her brother saying:
I wish to advise that I have taken over repayments to the home and car loans in the name of the above-mentioned Ms Dodson and her husband. I am requesting that all monies paid and still to pay be returned to me as this was a loan.
My payment contributions of the home loan commenced on 25/04/2013 for an amount of $2,100 per month and the total amount paid to date is $27,300.
The wife’s brother paid $2,100 a month for the mortgage from April 2013 until December 2016. He annexes copies of his bank statements to his affidavit showing the transfers. In his affidavit he said that he advanced the money to his sister to help her keep the home temporarily. He said it was a loan as he has a wife and three children of his own to support. At [22] of his affidavit[3] he said he it was always understood to be a loan and that if the husband “had objected to the terms of this loan, I would not have made the mortgage repayments.” I do not accept this evidence. There is no evidence that the husband even knew about the payments at the time they were made. The wife conceded that she did not tell the husband about the loan. I find that neither the wife nor her brother approached the husband about this; rather they made the arrangement between themselves. I do accept that the wife’s brother did advance these sums and that he seeks to be repaid when the wife is able to do so. It is not the same situation as a parent advancing funds to a child which can often be an advance on an inheritance.
[3] Affidavit of Mr M sworn 21 August 2017
The wife’s brother gave evidence that the agreement is that the wife will repay him after the court case is over. He denied that the husband ever paid board or any household expenses when the husband and wife lived with his parents. I do not accept that the wife is required to pay him interest as there is no evidence that there was any discussion let alone agreement about this.
Whilst the husband’s counsel pointed out the letter was on the wife’s brother’s business letterhead, it is clear that the wife’s brother has advanced those sums to the wife.
The parties’ employment
The husband is self-employed. His tax returns show a low income but the statements annexed to his affidavit do not provide a breakdown of the business expenses. It is not uncommon for people in his position to mix personal and business expenses. Often there are many deductions that a person in a small business can claim that results in their taxable income being low but their actual income being higher. The husband runs his business through a company called (omitted) Pty Ltd.
The husband has the capacity to work and has obligations to support his de facto partner and their three young children, as well as his two older children.
The wife relies on her sister and father to help her care for the children when she is working. She says the family report writer made a mistake when stating that her sister lives with her. Her sister comes over several nights a week.
Since January 2017 the wife has been working for her brother in his (omitted) business. She says that from January 2017 until September 2017 she was working full time of him but that on 4 September 2017 he lost the (omitted) contract and as a result her working hours have been reduced. She says she now works three days a week from 9.00am to 5.00pm instead of 5 days a week. She gave evidence that her income has reduced from about $1,400 per week to $800 per week. She conceded that she gets a car allowance on top of her salary so her financial statement in that regard is incorrect. She says she drives a car belonging to her brother and she pays the interest on it.
The wife’s brother was cross-examined. He needed the assistance of an interpreter. He runs his (omitted) business (business omitted) with two partners. They contract to clean business premises. (omitted) and (omitted) are their biggest clients. He gave evidence that on 4 September 2017 they lost the tender on the contract with (omitted). They had secured the contact three years earlier. He gave evidence that he did not bring proof of the termination of the contract because he is not entitled to bring those documents to Court. As there are two other directors of the company, his explanation is reasonable. It also only happened a few weeks before the final hearing. He said his partners did not want their business issues disclosed in Court.
The wife’s brother’s evidence is that the wife started working for him full-time in January 2017. Her PAYG slip shows gross income of $50,337 with a car allowance of $13,175 the year ending 30 June 2017. He said that if the work picks up he would take her on full time again.
I accept the evidence of the wife’s brother with respect to her employment and the loss of the (omitted) contract.
The parties’ legal and equitable interests
The parties agree that the former matrimonial home is worth $520,000. The mortgage was approximately $278,000 at separation. The mortgage is currently $233,000. The husband concedes that the wife has been responsible for reducing the mortgage.
The wife wants to retain the home if she is able. The equity in the home is $287,000.
The husband alleges that the parties have $25,000 in jewellery at the former matrimonial home and $5,000 worth of tools. He does not have any valuation evidence. The wife says the husband took his tools and the jewellery with him. The husband was cross-examined about the jewellery. He says he bought most of it over a seven year period and that it had not been valued and was not listed on the contents insurance. I have no evidence of value and I am not in a position to include jewellery or the husband’s tools in the pool.
It is common for parties to include figures in their asset liability pools for items such as furniture and chattels without providing useful evidence as to the basis of the values attributed to those articles. With respect to some of these items may well be parties decide the cost of obtaining such evidence is more than the benefit. The parties are always able to agree on a compromise figure to be included in the assets and liabilities to be available for division but if they cannot there needs to be admissible evidence as to its value. Mere assertion is not enough. Whilst the parties can split the difference, the Court cannot. Often the amounts are small and can distract the parties from the real issues. When queried, the husband’s counsel conceded that there was no valuation of the furniture and the husband in fact had no issue with the wife keeping the furniture in the former matrimonial home
The parties agree that post separation the husband paid a tax bill of approximately $4,000 and an accountant’s bill of approximately $4,000 which relates to the income he earned during the relationship.
Approximately $8,300 is owed for the Mazda car finance. It does not make sense that the Mazda car would be in the husband’s de facto’s name whilst the finance remains in the husband’s name, as that does not provide the finance company with security. It is not necessary for me to determine this as I find that in the circumstances in this case it is just and equitable to take into account the fact that the husband paid the tax debt and accounting fee but has had the benefit of the Mazda car. I think it would be artificial to treat the situation as if the husband has no interest in the car when his case is that the fact that he has repartnered and it is his partner who owns the car. The husband’s de facto’s own evidence is that the husband makes the finance repayments.
The parties have minimal superannuation. The husband has about $2,500 and the wife has about $3,000. One of the orders the wife seeks is “that there be an adjustment of superannuation between the parties as this honourable court deem fit.” This is an incompetent order. It is not possible to split superannuation interests of less than $5,000. If the parties did have a splittable superannuation interests a proper splitting order would had have to have been drafted and served on the trustee.
Given the debts the husband has paid post separation are offset by his retaining the car, the only asset I need to consider for the purpose of property adjustment between the parties is the house subject to the mortgage, the equity being $287,000.
The wife’s brother is not a party to these proceedings.
The debt the wife has to her brother was acquired post separation without the husband’s knowledge. It would not be appropriate to include it as a matrimonial debt. The wife will be responsible for that debt. It will be a matter for the wife and her brother to sort out between them.
Debt to (omitted) Pty Ltd
(omitted) Pty Ltd launched a caveat against the former matrimonial home on 14 October 2013. The husband says this relates to a $700 debt. The wife says she believes that the debt is closer to $4,000. It is with respect to a business debt. The husband claims that the debt is now statute barred. This is not particularly helpful as he provides no particulars with respect to the debt and appears to have done nothing to get rid of the caveat. This is something he should have addressed well before now. It must be addressed prior to transfer of property and refinance or the sale of the property.
The husband does not address the debt in the orders he seeks. The wife inexplicably seeks an order that she discharge the debt and have the caveat removed. As discussed during the course of the hearing, this is something that the husband will need to address.
The husband annexes the supply application & agreement together with the personal guarantee that he signed on 8 July 2011 with (omitted) Pty Ltd. (omitted) entered into the agreement with (business omitted), noting the husband as the authorised representative and guarantor.
The husband said that he got materials from (omitted) Pty Ltd as he had a business account with them. He agreed to personally guarantee the project and that they had lodged a caveat to protect the equitable charge which was part of contract. He agreed that he had not consulted the wife as she had nothing to do with the business and he was the director. He claims that he has tried to pay it but has not had the means and says that originally the debt was $1,200 and is now $700. He said he did not know if interest was accruing. He last made enquiries about the debt two years ago. Counsel for the wife suggested to him that the debt as at August 2017 is $4,102.90. The husband says he has not received any letter from (omitted) Pty Ltd. He then conceded that he had not given them his new address but said they have his phone number.
The husband’s approach to this debt is most unsatisfactory. He has been aware of it and was made aware of the caveat on the house once the proceedings were on foot but has done nothing about it. In my view the husband should be solely responsible for the debt whether it be $700 or $4,000. He should have addressed this much earlier. He will need to take steps to remove the caveat before the wife will be able to refinance and make a payment to him.
Conduct of trial and evidence
Both parties filed affidavits which contained inadmissible material, despite being prepared by lawyers. Making an allegation in an affidavit is not evidence. Both of the trial affidavits also sought to respond to the other parties’ earlier affidavits which were not in evidence at the trial. This is not helpful.
The affidavit of the husband’s de facto partner, Ms L, contains untranslated and partly illegible text messages. The top half of the pages is completely blank. That is the first problem. The second is that the text messages are not in English. Presumably they are in (language omitted). Without certified translations the annexures, even if legible, have no evidentiary value.
At the end of the hearing the Counsel for the husband submitted that the wife failed to meet the requirements of the Kennon case and establishing exceptional circumstances. He said there should be a 2.5% adjustment in the husband’s favour due to fact that he has care of the three young children whereas the wife has two.
The husband has repartnered and has obligations to provide support for his de facto partner and their three young children. Due to the fact that they have three children under four years old, it is reasonable that the de facto partner stays at home to look after the children full time whilst the husband works. I accept that his obligations to provide for his new family are significant. Unlike the wife, he does have a partner who cares for the children while he works. Both the husband and his de facto partner sought to given inadmissible evidence in regards to the health of the children and the de facto partner. This was after conceding that there was no medical evidence before the Court with respect to his de facto partner’s health and his eldest child’s health.
Counsel for the husband had initially also sought to argue that the husband was his own expert with respect to his statement that he had saved the parties between $60,000 and $70,000 by carrying out construction and improvement on the former matrimonial home. This is referred to in his case outline. He does not provide particularised evidence of what he did.
Rule 15.06A of the Federal Circuit Court Rules 2001 (Cth) defines an expert as:
in relation to a question, means a person (other than a family and child counsellor or a welfare officer) who has specialised knowledge about matters relevant to the question based on that person's training, study or experience.
The requirements for expert evidence has been discussed at length in several court decisions including Makita (Aust) Pty Ltd v Sprowles [2001] 52 NSWLR 705 and Dasreef Pty Ltd v Hawchar (2011) 277 ALR 611. Counsel’s submission that his client was his own expert was without merit and should not have been made.
I make one further observation. In her further amended outline of case the wife seeks retrospective maintenance of $250 a week for 3 years as a lump sum of $39,000. This was not the subject of cross examination and was not mentioned by the wife’s counsel.
Listing on 8 November 2017
In the course of reviewing the evidence and writing this judgment, I noticed that pages missing from the husband’s efiled affidavit as the paragraph numbers were not sequential. I caused the matter to be relisted to address the issue as the parties could not agree on a way forward. As it turns out the pages were missing from the service copy and the copy in the husband’s barrister’s brief. When I queried why neither Counsel raised it during the hearing I was informed that neither noticed it. I find that incredibly lax on the part of both Counsel and it illustrates the quality of preparation and presentation in the case. Presumably the solicitors did not notice either. Counsel could not agree on the way forward and again, extraordinarily, neither Counsel had the missing pages. As the husband’s instructing solicitor was not in Court it was necessary to stand the matter down. After some time the husband decided not to seek to rely on those pages rather than seek to have the case reopened which would have led to further delay.
Due to the lack of preparation much time was wasted and additional cost incurred, the wife’s Counsel sought costs. Due to the nature of the issue it was reasonable for the solicitor with carriage of the matter to attend to instruct Counsel who appeared at the hearing. It became clear that Counsel were arguing about pages neither of them had seen. I am not confident that they have seen the pages even now.
In my view none of the lawyers should charge their clients for the appearance on 8 November 2017 and it is apparent that simple steps such as identifying the pages and inspecting them before Court did not occur. If they had, the Court appearance may have been avoided altogether or significantly truncated.
They had weeks to sort it out as my chambers first emailed the solicitor about the problem on 19 October 2017. On 26 October 2017 my chambers notified the parties that the matter was to be relisted if the applicant continues to object to the filing of the material. On 2 November the Notice of Listing was emailed to the parties lawyers.
Legal principles and conclusions
Until the High Court of Australia (“High Court”) decision in Stanford & Stanford (2012) 247 CLR 108 (“Stanford”), the position in respect of the process to be applied to the resolution of matrimonial property cases was said to be well settled with a preferred approach as set out by the Full Court in Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39].
The High Court considered the operation of s.79 of the Act in the matter of Stanford. In this case, the majority stated at [35]-[36] that:
It will be recalled that s 79(2) provides that "[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.
[Footnotes omitted]
The High Court found three fundamental propositions with respect to the application of s.79, which can be summarised as follows:
1. Firstly, in order to ascertain whether it is just and equitable to make a property settlement order, it is necessary to identify the existing legal and equitable interests of the parties in the property. The High Court emphasised the word ‘existing’.
2. Secondly, although s.79 gives the court a broad power to make property settlement orders it may not be exercised in an unprincipled fashion. There must be no assumption that the parties’ interests are or should be different to their existing interests.
3. Thirdly, when considering whether making a property settlement order is just and equitable the court must not assume that one or the other party has the right to a property adjustment order. The court must give separate consideration to s.79(2) in addition to the matters referred to in s.79(4).
In Stanford the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of s.79(2) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation.
The High Court also pointed out that what is just and equitable is different in every case.
I am satisfied that it is just and equitable to make property adjustment orders in this case.
Both parties made substantial contributions during the marriage. The husband worked and did some work on the home they built. The wife’s parents provided the parties with free accommodation for a significant period of their relationship. The wife was the main parent and homemaker.
In the circumstances of this case the post-separation contributions of the wife are significant and must be recognised. She has had the sole care of the children since separation. The father provided little financial support post-separation. He made some car repayments until December 2013. The car was repossessed but the husband’s de facto partner paid the debt owing the husband. The wife has been solely responsible for paying the mortgage since April 2013. She has been able to do this with the assistance of her brother. The wife and children have had the benefit of living in the property rather than renting but she has also increased the equity in the property post-separation.
Overall, I assess the wife’s contributions as 60% and the husband 40%.
I now turn to the section 75(2) Factors.
The parenting orders made by consent provide for the children to live with the mother and the mother to have sole parental responsibility for them. The mother and children are to resume therapeutic counselling to promote the children’s resilience and the mother’s capacity to facilitate any relationship between children and the father. The father is permitted to send the children cards, gifts and letters which the mother shall give to the children. The father’s time is reserved unless by written agreement between the parties.
The relationship lasted eight years. Both parties have the capacity to work.
According to the parties’ most recent financial statements the wife earns $1,400 per week and the husband approximately $1,200 per week. The wife’s income has reduced since swearing her financial statement due to her brother reducing her work hours.
The husband earns income through his business. His taxable income is modest but is not necessarily reflective of his actual income as is typical in businesses of his type.
The parties both have earning capacity and are working. Neither party has had their earning capacity affected by their marriage and any actual disparity in earning capacity is unclear. I make no adjustment for this.
Both the husband and his de facto partner sought to give inadmissible medical evidence, which I refer to at [95] in regards to the health of the children and the de facto partner which I cannot consider.
He also has two children from the relationship with his wife to support. He is currently not spending any time with them and that is likely to continue. He pays a modest amount of child support.
Both parties have responsibilities for the care of children. The husband has the support of his partner. The wife does not have a partner. She has 100% of the care of the children and is likely to continue to have their sole care. This requires small adjustments in the wife’s favour. I also recognise that the wife has the debt owing to her brother. I am mindful however of not double counting given she has received recognition of her post-separation contributions. There will be a further 2.5% adjustment in the wife’s favour.
As the wife seeks the opportunity to retain the house I will give her that opportunity.
The wife will need to make a payment to the husband of $107,625. If she is unable to refinance the property and make the payment to the husband the property will need to be sold. I am satisfied that in all the circumstances the orders I make are just and equitable.
I certify that the preceding one hundred and twenty-three (123) paragraphs are a true copy of the reasons for judgment of Judge Harland
Date: 29 January 2018
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