Drake and Drake
[2016] FCCA 3118
•7 December 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DRAKE & DRAKE | [2016] FCCA 3118 |
| Catchwords: FAMILY LAW – Property – short relationship – young parties – significant initial contributions by husband – contributions during relationship – post separation contributions – overall assessment of contributions – 75(2) factors – justice and equity. |
| Legislation: Family Law Act 1975, ss.79, 75(2) |
| Cases cited: Bevan & Bevan [2014] FamCAFC 19 Russell & Russell (1999) FLC 92 – 877 Scott & Danton [2014] FamCAFC 203 Stanford v Stanford (2012) 247 CLR 108 Teal & Teal [2010] FamCAFC 120 |
| Applicant: | MR DRAKE |
| Respondent: | MS DRAKE |
| File Number: | PAC 5137 of 2015 |
| Judgment of: | Judge Obradovic |
| Hearing date: | 23 November 2016 |
| Date of Last Submission: | 23 November 2016 |
| Delivered at: | Parramatta |
| Delivered on: | 7 December 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr Gardiner |
| Solicitors for the Applicant: | Slater & Gordon Lawyers |
| Counsel for the Respondent: | Mr Shaw |
| Solicitors for the Respondent: | Bell Lawyers |
ORDERS
That the wife must, no later than 18 January 2017:
(a)Pay to the husband the sum of $266,798 (“the payment”); and
(b)Do all acts and things necessary to refinance the home loan (“mortgage”) with (omitted) Bank and secured against the property at Property P, New South Wales being the whole of the land comprised in Folio ID (omitted) (“the Property P property”) into her sole name and/or otherwise discharge the mortgage in its entirety such that the husband is no longer a mortgagor.
Upon receiving the payment the husband must no later than 25 January 2017, do all acts and things necessary to transfer to the wife all his right title and interest in the Property P property.
If the wife fails to comply with her obligations set out in Order 1, such that the payment is not made and the refinance has not occurred by 18 January 2017, the husband and wife shall by 25 January 2017 do all acts and things and sign all documents necessary to sell the Property P property in accordance with the following:
(a)The Property P property shall be listed for sale by private treaty with such real estate agent as is agreed between the parties and failing agreement by 1 February 2017 the real estate agent will be as nominated by the then President of the Real Estate Institute of New South Wales at the request of the parties or either of them.
(b)The list price of the Property P property shall be such amount as is agreed between the parties and failing agreement by 1 February 2017 the list price will be as nominated by the real estate agent.
(c)The sale price of the Property P property shall be such amount as is agreed between the parties and failing agreement any offer to buy the Property P property that is at least 90% of the list price shall be accepted by the parties as the sale price.
(d)The proceeds of sale of the Property P property shall be paid in the following manner and priority:
(i)Payment of the agent’s commission and advertising or other expenses, if any, payable on the sale;
(ii)Payment of the legal costs and outlays relating to the sale;
(iii)In payment or reimbursement of any nomination fees of Real Estate Institute of New South Wales and/or the fees of their nominee made pursuant to these Orders or any variation of these Orders;
(iv)To discharge the home loan/s with the (omitted) Bank, which is secured by way of mortgage over the Property P property; and
(v)If after making the payments referred to in sub-paragraphs (i) to (iv) above the balance of sale proceeds is $301,739 or more then as follows:
1. In payment to the husband of the sum of $266,798 plus interest pursuant to s117B(1) Family Law Act 1975 to be calculated from the date of these Orders to 18 January 2017, being the date for the payment referred to in Order 1 herein;
2. In payment to the husband of 85% of any amount above $301,739; and
3. The balance to the wife.
(vi)If after making the payments referred to in sub-paragraphs (i) to (iv) above the balance of sale proceeds is less than $301,739 (“net proceeds”) then as follows:
1. In payment to the husband of $10,320 plus interest pursuant to s117B(1) Family Law Act 1975 to be calculated from the date of these Orders to 18 January 2017, being the date for the payment referred to in Order 1 herein;
2. In payment to the husband of 85% of the net proceeds plus interest pursuant to s117B(1) Family Law Act 1975 to be calculated from the date of these Orders to 18 January 2017, being the date for the payment referred to in Order 1 herein; and
3. The balance to the wife.
In the event that the Property P property is not sold by private treaty pursuant to Order 3 on or before four months from the date of this Order then the husband and the wife shall do all acts and sign all documents as are necessary to sell the Property P property by auction and the following shall apply unless otherwise agreed:
(a)The Property P property shall be listed with the agent appointed under Order 3 (hereinafter called “the Auctioneer”) for sale by auction within a further three months.
(b)The parties shall execute all documents requested by the auctioneer for sale of the Property P property by auction and shall pay equally any monies sought by the auctioneer in advance.
(c)The reserve price of the property shall be such amount as is agreed between the parties and failing agreement being reached between the parties 21 days prior to the auction, then the reserve price shall be nominated by the auctioneer.
(d)The sale price of the Property P property shall be any amount in excess of the reserve price but in the event of the reserve price not being reached the sale price of the property shall be such amount as is agreed between the parties or failing agreement any offer received after the auction to buy the Property P property at a price that is at least 95% of the reserve price shall be accepted by the parties.
(e)That upon agreement being reached for sale of the Property P property, the sale proceeds shall be paid in accordance with Order 3(d) above.
Unless otherwise agreed, in the event that the Property P property is not sold at the auction pursuant to Order 4 or within 14 days after the date of the auction by further negotiation, then the husband and the wife shall cause a further auction of the Property P property to be held within three months after the date of the first auction and for that purpose the provisions of Order 4 shall apply and in the event the property remains unsold, then the property shall be re-submitted for auction at three monthly intervals until sold.
That pending the sale of the Property P property, the wife shall be liable for and indemnify the husband in respect of all payments of principal and interest on the mortgage secured over the Property P property together with all other outgoings including council and water rates, taxes and insurances and other outgoings levied against the property as and when they fall due.
That within 14 days from the date of the making of these Orders, the parties shall do all acts and things necessary to authorise the release of funds held in trust on their behalf by (omitted) Conveyancing and direct such funds to be paid to the New South Wales Office of State Revenue (“OSR”) in payment of the wife’s debt, interest and penalties arising out of the First Home Owner’s Grant and if the funds held in trust are not sufficient to meet the entirety of the payment due to the OSR then the parties shall, within a further 14 days, each pay half of any shortfall. If the payment due to the OSR is less than the balance of the moneys held in trust on the parties’ behalf, then any balance is to be divided as to 85% to the husband and 15% to the wife.
That within 14 days of the making of these Orders, both the husband and the wife shall do all such acts and things and sign all such documents as may be necessary to cause the joint account held in joint names with the (omitted) Bank, being account number (omitted), to be closed and the balance to be divided evenly between the parties as they each direct.
The husband do all acts and things and sign all documents necessary to transfer ownership of his right, title and interest in the Hyundai motor vehicle registration number (omitted) to the wife.
That pursuant to Section 78 Family Law Act1975 that each of the husband and the wife shall be and hereby are declared to the sole and absolute owners at law and in equity of all items of furniture, furnishings, personalty, chattels, jewellery and monies (whether held in cash or in deposit with any bank, building society, credit union or other financial institution) present in each party’s possession, custody or control together with 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.
That 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 to pursuant to these Orders or any debt that party is owing to third parties.
That both the husband and the wife shall do all such acts and things and sign all such documents as may be necessary to give effect to these Orders.
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 Family Law Act 1975 that the Registrar of the Federal Circuit Court of Australia, Parramatta 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 to these Orders.
IT IS NOTED that publication of this judgment under the pseudonym Drake & Drake is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 5137 of 2015
| MR DRAKE |
Applicant
And
| MS DRAKE |
Respondent
REASONS FOR JUDGMENT
Introduction
The Applicant husband and the Respondent wife are in dispute in relation to the question of property adjustment orders.
At the date of hearing, the husband is 28 years old and the wife is 23 years old.
The parties commenced living together in (omitted) 2013, they were married in (omitted) 2014 and they separated in July 2015. They cohabited for just two years.
During those two years, the parties purchased two properties. One of them was sold prior to hearing, and the net proceeds of sale are held in trust. The other is the former matrimonial home where the wife has resided since separation. She would like to keep the home and pay out the husband.
At the commencement of the hearing, the parties handed up an agreed balance sheet which was of assistance to the Court.
The husband relied upon the following documents:
a)Amended Initiating Application filed 21 October 2016;
b)Affidavit of Mr Drake affirmed 28 October 2016; and
c)Financial Statement of Mr Drake sworn 21 October 2016.
The wife relied upon the following documents:
a)Amended Response filed 2 November 2016;
b)Affidavit of Ms Drake sworn 2 November 2016; and
c)Financial Statement of Ms Drake sworn 2 November 2016.
Both parties filed a Case Outline document.
The husband and the wife were both cross-examined.
Pool of Assets
The parties agreed to the following:
| Ownership | Description | Wife’s value | Husband’s value | ||
| ASSETS | |||||
| 1 | J | Property P | $710,000 | $710,000 | |
| 2 | J | Trust funds held by (omitted) Conveyancing from sale of property at Property F | $34,427 | $34,427 | |
| 3 | J | (omitted) Account (ending (omitted)) | $18 | ||
| 4 | W | (omitted) Account (ending (omitted)) | $330 | $16,252 | |
| 5 | W | (omitted) Bank Account | $2,000 | $NK | |
| 6 | H | (omitted) Bank Account s1 | $3,728 | $3,728 | |
| 7 | H | (omitted) Bank Account s23 | $Nil | $Nil | |
| 8 | H | (omitted) Shares | $3,191 | $3,191 | |
| 9 | H | (omitted) Shares | $3,185 | $3,185 | |
| 10 | H | Subaru (omitted) | $5,000 | ||
| 11 | J | Hyundai (omitted) | $3,300 | $5,000 | |
| 12 | H | Household contents | $5,000 | $5,000 | |
| 13 | W | Household Contents | $5,000 | $5,000 | |
| Total | $ | $ 790,801 | |||
| LIABILITIES | |||||
| 14 | J | Mortgage – Property P | $408,261 | $408,261 | |
| 15 | W | Property P OSR Debt | $35,000(E) | $35,000 (E) | |
| 16 | W | HECS Debt | $31,805 | $NIL | |
| 17 | W | Capital gains tax liability | $3,500 (E) | $NK | |
| Total | $ 443,261 | ||||
| SUPERANNUATION | |||||
| Member | Name of Fund | Type of Interest | Wife value | Husband’s value | |
| 18 | H | (omitted) Super | Accumulation | $63,327 | |
| 19 | W | (omitted) Super | Accumulation | $16,235 | |
| Total | $79,562 | ||||
Noting the concession made by the husband in relation to the payment of the debt to the Office of State Revenue the Court will for the purposes of making the adjustment calculations, take out of the pool both the money currently held in trust by (omitted) Conveyancing and the debt to the Office of State Revenue (which are almost equivalent).
In the absence of specific evidence about the value of certain of the parties’ property, the Court is left in a position where it can make no findings as to such values. However, the Court accepts the parties’ joint position in respect of the value of the property.
As such, the Court finds that the following is the pool of assets available for division between the parties pursuant to a property adjustment order at time of hearing[1]:
[1] I have also not included in the pool assets of nominal value
Asset/Liability
Value
Property P
$710,000
Wife’s Bank Accounts ((omitted))
$2,330
Husband’s Bank Accounts
$3,728
Shares in Husband’s name
$6,378
Subaru (omitted)
$5,000
Hyundai (omitted)
$3,300
Husband’s Household Contents
$5,000
Wife’s Household Contents
$5,000
(omitted) Super
$63,327
(omitted) Super
$16,235
Property P
($408,261)
TOTAL NET:
$412,037
Overall Approach
The overall approach to the determination of an application for property adjustment orders pursuant to s.79 Family Law Act1975 (Cth) was set out by the High Court in Stanford v Stanford,[2] where their Honours stated:
[2] [2012] HCA 52; (2012) 247 CLR 108
[37] … first, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property… the question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
…
[40]… whether making a property settlement order is ‘just and equitable’ is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4) …
Such approach was subsequently considered by the Full Court of the Family Court in Bevan & Bevan[3], Chapman & Chapman[4] and Scott & Danton[5].
[3] [2014] FamCAFC 19
[4] [2014] FamCAFC 91
[5] [2014] FamCAFC 203
In many matters which come before this Court, the requirement of whether it is just and equitable to make any orders is readily satisfied by the fact of the parties’ separation; as there is not and will not thereafter be the common use of property by the parties.
In this matter, the parties’ major asset is owned by the wife, i.e. it is in her name. Both parties seek orders as to the division of their property and in particular both parties urge it upon the Court that in all of the circumstances it is just and equitable to make an order adjusting the property interests of the parties. It is appropriate that the Court do so.
Once the issue of whether it is just and equitable to make any order is resolved, the Court is to then consider the contributions made by the parties as defined in s.79(4)(a) to (c), the matters set out in s.79(4)(d) to (g) and in particular the subjective considerations as to the parties by having regard to the provisions of s.75(2) in so far as they are relevant.
In respect of the argument about how the initial contributions are to be assessed, which is a significantly important aspect of this matter, the Court is mindful of what the Full Court of the Family Court said in Pierce & Pierce [1998] FamCA 74 at [28], namely:
In our opinion is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home…(citations omitted).
The Court is then to consider the justice and equity of the actual orders to be made, in the context of the Court’s obligations to make appropriate orders as provided for in s.79(1) of the Act.[6]
[6] see generally Russell & Russell (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120
The just and equitable requirement is “one permeating the entire process”[7].
[7] Bevan supra at [86]
Contributions
The parties commenced cohabitation in early (omitted) 2013.
At the commencement of the relationship, the husband had the following assets:
a)An interest in a property at Property D which he purchased in (omitted) 2010 for $190,000. The husband obtained a mortgage of $181,000 to fund the purchase and he contributed approximately $15,000 towards the deposit and stamp duty.
The husband estimates that at the commencement of the relationship the equity in this property was $100,000[8]. No historical valuation was produced to the Court to prove the value of the property at the commencement of cohabitation.
[8] This estimate was not challenged in cross-examination nor was any objection made to the evidence
As at December 2013[9], the loan amount was $173,000. The wife asserts that the equity in the Property D property, based on the husband’s estimates, was $58,000[10].
[9] five months after the parties commenced living together
[10] The wife was not cross-examined about this, and the estimate is said to have been made by the husband at the time the parties purchased the house and land package in Property P which later became the former matrimonial home
While the Property D property was tenanted until its sale during the relationship, the husband made financial contributions towards rates, strata levies and insurance where the rental income was not sufficient to cover all of the costs;
b)An interest in a property at Property S, which he purchased with his brother (although the legal title was in the husband’s name) in (omitted) 2009.
The purchase price was $320,000, and the property was subject to a mortgage of $294,400 at that time. The husband contributed approximately $8,300 towards the cost of purchase.
The Property S property was sold on 23 July 2013 (approximately two weeks after the party’s commenced cohabitation).
The total net proceeds of sale were $57,251 of which the husband paid $20,000 to his brother on 17 July 2013.[11]
Consequently, the husband received $37,251 from his interest in Property S held at the time of the commencement of cohabitation;
c)A Subaru (omitted) which he purchased in 2010 for $15,000, which the husband estimates was worth $10,000 in July 2013[12];
d)Superannuation with (omitted) Super in the amount of $29,732;
e)Proceeds of sale from managed funds in the amount of $16,582;
f)Shares with (omitted) with no value provided; and
g)Furniture and other household contents with no value provided.
[11] Note the husband’s affidavit states it was in 2016, but the statement in support is clearly for the 2013 calendar year
[12] This estimate was not challenged in cross-examination
At the commencement of the relationship, the wife had the following assets:
a)Superannuation with (omitted) Superannuation of approximately $12,000; and
b)Savings of approximately $6,000-$7,000.
The wife also had a HECS debt of $31,805. Given the nature of the repayment of HECS debts, this is a liability which the wife has retained and which may or may not ever be paid off, depending on the wife’s earnings into the future.
Therefore, at the commencement of the parties’ cohabitation, the husband had net assets of either $193,565 or $151,565. The wife had assets of $19,000[13]. The husband’s initial contributions were significantly superior to those of the wife and even using the lesser figures[14], amounted to 89% of the parties’ assets at the start of the parties’ relationship.[15] Conversely, the wife’s contributions at the commencement of the relationship were at most 11%.[16]
[13] This is without taking into consideration the wife’s HECS debt
[14] Total of $170,565
[15] If the HECS debt is taken into consideration, the wife’s contribution at the commencement of the relationship would in fact be negative
[16] On the higher figures (total $212,565), the husband’s contributions were 91% and the wife’s 9%
During the two years the parties lived together, the husband was earning just under $90,000 gross per annum and the wife was earning as at June 2014 - $38,404 gross per annum, and as at June 2015 - $30,337 gross per annum. Consequently during the two years that the parties lived together the husband’s income from his employment was $179,736 and the wife’s income from her employment was $68,741.
From July 2013 and for a period of 12 months, the parties lived in rented accommodation in Property P. The parties both contributed towards the cost of rent and utilities.
In August 2013, the parties exchanged contracts on a house and land package at Property P. The purchase price was $260,000 and the husband contributed $13,000 from the sale of the Property S property.
Settlement of the Property P property occurred on 9 September 2013. The husband contributed a further sum of $22,270 towards the purchase of the property. This brings the husband’s total initial contribution towards the purchase of land at Property P to $35,270.[17]
[17] Lest there be any confusion, this money was not double counted for the purposes of assessing the husband’s contributions, see in particular paragraphs 53 to 59 of these reasons
In July 2013 the parties entered into a building contract with (omitted). The husband paid $4,000 as part of the initial progress payment.
The wife’s initial contributions towards the house and land package were $2,000.
The Property P property was purchased in the wife’s sole name, as the parties were under the understanding that she would be eligible for the First Home Owners’ Grant. The mortgage was in the parties’ joint names.
The parties borrowed a total of $430,088 for the purchase of land and construction of the dwelling which was completed in June 2014.
The parties commenced living in the Property P property from June 2014. The parties held a joint account with the (omitted) Bank where either part or the whole of their respective wages were transferred into. Subsequently those funds were used for the payment of the mortgage, rates, insurances and utilities associated with the Property P property. The Court is not able to make findings about the precise costs and how much each of the parties contributed to those costs, but it is noted that the mortgage alone was approximately $2,400 per month. [18]
[18] Over the two years the parties lived together, the wife’s gross income was $68,741. In the financial year ending June 2015, the year the parties lived together in the Property P property, the wife’s gross income was $30,337. This means, her taxable weekly income was $583. Suffice to say even her entire gross weekly income would not have been sufficient to pay the mortgage. Her net weekly income would have been even less.
The husband sold the Property D property in mid-August 2014. The net proceeds of sale, in the amount of $79,059 were paid into the parties’ joint offset account held with the (omitted) Bank and a further $20,160 was received from the deposit (although there is no evidence as to how these funds were utilised). Therefore the total sum received from the sale of the Property D property was $99,219 of which the vast majority was utilised for the benefit of the parties by reducing the interest payable on the loan.
The husband also purchased a Hyundai (omitted) for $8,000 from the sale proceeds of the Property D property, which the wife has been driving and continues to drive.
During the parties’ relationship, they went on a holiday to (country omitted) which was paid for by the husband.
On (omitted) 2014 the parties married. The husband paid for the cost of the wedding. The wife estimates that the reception alone cost over $10,000. In addition a wedding singer from the (country omitted) was flown in and paid for by the husband.
In March 2015, the husband paid capital gains tax with respect to the profit made on the sale of the Property D property, in the amount of $15,309.
In June 2015, the parties purchased an investment property at Property F. The Property P property was used as security to fund the mortgage to purchase the Property F property. The property was tenanted and until February 2016, the rent was utilised to pay the mortgage. Both parties were mortgagors.
The parties separated on 11 July 2015. The wife remained living in the Property P property while the husband moved in with his father and has been paying a small amount of board.
Between separation and late January 2016, the wife contributed $210 per week towards the Property P property mortgage and the husband the balance, to make up the mortgage repayments of $601 per week. There is dispute between the parties about which one of them paid the various outgoings, and the Court finds that each of them made some contribution towards such costs, until late January 2016.
Since February 2016, the wife has been meeting all of the costs associated with the Property P property, namely the mortgage and all of the outgoings. This has caused the mortgage to be in arrears as the wife’s wages were not sufficient to cover all of the costs. Since August 2016, the mortgage repayments have been brought up to date. At about that time the wife took in a boarder who has been paying half of the utilities and $200 per week board.
Between February 2016 and August 2016, the parties were in dispute about where the rent from the Property F property should be paid and for what purpose it should be utilised. This dispute resulted in an application being brought before the Court. During that period, the husband met all of the mortgage repayments and outgoings associated with the Property F property.
At separation, the wife took $35,000 from the parties’ offset account[19]. Most of this was money which had been left over from the sale of the Property D property. At the time of the hearing, the money has all been spent. The wife says she used some of the moneys for her legal fees and the rest on her living expenses and costs associated with the Property P property.
[19] There were a number of accounts which the parties held, whether in their sole names or jointly, and the terms ‘parties’ offset account’ is used in a loose sense
A few days after separation, the husband withdrew $29,150 from the parties’ offset account.[20] The husband says he has used these funds on various bills, including legal fees and an overseas holiday.
[20] Ibid
It appears that both parties have spent the money they each took at separation. Neither party argued at hearing that this money should be added back into the pool.
Throughout the relationship, the husband worked hard. At times he worked two jobs.
Throughout the relationship, the wife worked hard. She was in paid employment and she studied. She was supported[21] by the husband to finish her studies which enabled her to obtain better paid employment.
[21] Even if only indirectly
The parties jointly made decisions in relation to the design and interior furnishings of the Property P property. They shopped together for furniture, they made decisions about the colour schemes and together made the property their home. They did the gardens, maintained the home and completed the domestic chores.
The Office of State Revenue, in mid-2015 wrote to the wife and advised that it had determined that she was not entitled to receive the First Home Owners Grant. Consequently the Office of State Revenue has levied a debt owing by the wife for the repayment of the First Home Owners’ Grant together with interest and penalties. The husband conceded during the hearing that that debt to the Office of State Revenue was a joint debt and should be paid out of funds currently held in trust on behalf of the parties from the sale of the Property F property.
Assessment of contributions
Although the husband had somewhere between $193,565 or $151,565 coming into the relationship, not all of that was utilised for the acquisition of further assets by the parties as $63,327 was in superannuation. As noted earlier, there is no historical valuation of Property D, however when it was sold a year after the parties commenced living together it netted just under $100,000. Therefore, the husband’s estimate of the value of the equity in the Property D property at the commencement of the relationship is the more probable of the two.
However, the Court is not overly concerned with the exact amount of the value of the husband’s initial contribution, particularly given the findings at paragraph 26. The Court is satisfied that the husband contributed significantly more than the wife did coming into the relationship. Furthermore, but for the husband’s initial contributions the parties would not have acquired the Property P property and consequently the Property F property, which was leveraged off the Property P property.
The husband contributed $39,270 directly towards the purchase of Property P, and $79,059[22] was utilised indirectly to reduce the interest payable on Property P thus increasing the equity even ever so slightly. Further, the $79,059[23] was money which was available to the parties and for their purposes when they purchased the Property F property.
[22] Being the sale proceeds of Property D
[23] This is the pool of money where the wife took $35,000 from at separation
Noting that during the relationship the husband’s income was significantly higher than that of the wife, and that since separation the wife alone has not been able to make the mortgage repayments and all of the costs associated with the Property P property (even on her now comparatively much higher income), the financial contributions made by the husband towards the payment of the mortgage, rates, insurances and utilities, and the parties’ general living expenses during the relationship are assessed as overall significantly greater than the wife’s.
The parties’ non-financial contributions during the relationship, as well as the parties’ post separation contributions, are both assessed as equal. In this regard, I have taken into regard, the findings at paragraphs 42 to 51 of these Reasons in particular, and otherwise matters as relevantly found.
The overall contributions by the husband are assessed at 85% and the overall contributions by the wife are assessed at 15%.
Section 75(2) Factors
The wife is 23 years old and the husband is 28 years old.
Both the husband and wife are in relatively good health. In this regard, the wife asserts in her Affidavit that she suffers from two medical conditions. There is no independent expert evidence in respect of any diagnosis or prognosis, nor is there any independent expert evidence regarding any effect on the wife’s future earning capacity as a consequence of the medical conditions she asserts she has. The Court does not find that the wife has any diminished earning capacity as a consequence of the two medical conditions she says she suffers from.
Both the husband and the wife are presently in full time employment.
At the time the parties commenced cohabitation, the wife was 20 years old. She was earning $38,404 gross per year in 2014. At the same time, the husband was 25 years old and he was earning $89,000 gross per year. At the time of hearing, as already noted the wife is only 23 years old. She is currently earning[24] $55,000 per year. Her income has increased by $17,000 gross since the parties’ commenced cohabitation. The husband’s current income[25] is $91,000. His income has increased by $2,000 gross since the parties’ commenced cohabitation.
[24] From her employment
[25] From his employment
The wife at present earns about $36,000 gross per annum less than the husband. She says in her evidence that the qualifications which she obtained during the parties’ relationship have increased her ability to find work and indeed without these qualifications she says she would not be able to work in her current role.
While there is still a disparity of income between the parties at the time of hearing, the Court is not satisfied on the evidence that there will continue to be a similar disparity of income between the parties in the years to come. Likewise, the Court is not satisfied that there will not continue to be a similar disparity. [26] The Court is not able to make any findings in this regard, either one way or the other.
[26] If the wife continues to work as hard and as well as she has to date, and her income continues to increase in a manner similar to the way it has to date, it is likely on a simple projection of the parties earnings from cohabitation to date, that she will reach the husband’s income earning level by the time she is 25 or 26 (and in a similar vein, be of similar income to what the husband was earning when he was 25). If this was to occur, there would be no disparity. Of course, this is pure speculation, and I make no such findings.
There are no children of the relationship.
The Court notes that the wife has already had the benefit of $35,000 at the time of separation. As previously mentioned, this is not an amount which the husband sought to be included as an add-back, or in respect of which any submissions were otherwise made.
Likewise, the husband has already had the benefit of $30,000 at the time of separation. This was part of the money which the husband brought into the relationship after the sale of the Property D, as referred to earlier in these reasons.
Taking into consideration the facts found above and in all the circumstances no adjustment will be made in respect of 75(2) factors.
Overall
Having assessed the parties’ contributions at 85/15 in the husband’s favour, and after finding that no further adjustment is warranted, the end result is an 85/15 adjustment in the husband’s favour.
Based on a net pool of $412,037 and an 85/15 adjustment in the husband’s favour, the husband is to receive by way of adjustment of property interest assets to the value of $350,231 and the wife is to receive by way of property adjustment orders assets to the value of $61,806; in the manner described below.
The wife is to receive:
Asset/Liability
Value
Property P
$710,000
Wife’s Bank Accounts ((omitted))
$2,330
Hyundai (omitted)
$3,300
Wife’s Household Contents
$5,000
(omitted) Super
$16,235
Property P
($408,261)
Cash Payment to the Husband
($266,798)
TOTAL NET:
$ 61,806
The husband is to receive:
Asset/Liability
Value
Cash Payment from Wife
$266,798
Husband’s Bank Accounts
$3,728
Shares in Husband’s name
$6,378
Subaru (omitted)
$5,000
Husband’s Household Contents
$5,000
(omitted) Super
$63,327
TOTAL NET:
$ 350,231
The wife wants to retain the former matrimonial property. The Court accepts that there is evidence that she has some borrowing capacity[27]. The wife will be given the opportunity of retaining the home and paying out the husband, but only for a very limited period[28] and thereafter the orders which are made which will ensure that the husband is not disadvantaged by the opportunity given to the wife to retain the home.
[27] Although such evidence is very limited
[28] Given the period of the year, the Court is mindful that any action which the wife will need to take to refinance the loan is likely to be somewhat delayed due to the forthcoming holidays, and particularly the public holidays.
If the wife is not able to refinance the home loan and pay out the husband, the former matrimonial home is to then be sold. If the former matrimonial home is to be sold, there is provision made in the orders for payments to the husband and wife in accordance with an 85/15 overall adjustment taking into consideration the possibility of the proceeds of sale being either less or more than the agreed value of the home, plus interest to the husband after 42 days from the date of these orders in respect of some of the payments to be made to the husband.
If the property is to be sold and the sale proceeds are less than $710,000 the orders provide for adjustment of the various assets to be retained by the wife, such that the overall adjustment remains an 85/15 split.[29]
[29] The total of the assets excluding the Property P property is $110,298. The wife has $26,865 of that amount, and the husband $83,433. A 15% split to the wife equals $16,545, therefore an adjustment to the husband of $10,320 is to be made. If the sale must proceed because the wife is unable to pay out the husband it has delayed the inevitable by a period of 6 weeks and the husband should therefore be awarded interest
The result in all the circumstances is appropriate and just and equitable.
Orders will thus be made accordingly as set out at the forefront of these Reasons for Judgment.
I certify that the preceding seventy-seven (77) paragraphs are a true copy of the Reasons for Judgment of Judge Obradovic
Date: 7 December 2016
CORRECTIONS
The amount of $710,000 is deleted in Order 3(d)(v) and the amount of $301,739 is inserted in its place.
The amount of $710,000 is deleted in Order 3(d)(v)(2) and the amount of $301, 739 is inserted in its place.
The amount of $710,000 is deleted in Order 3(d)(vi) and the amount of $301,739 is inserted in its place.
The word ‘net’ is deleted in the fifth line of paragraph 74.
The word ‘net’ is deleted in the first line of paragraph 75.
Key Legal Topics
Areas of Law
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Family Law
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Property Law
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Civil Procedure
Legal Concepts
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Remedies
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Jurisdiction
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Costs
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Injunction
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Procedural Fairness
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Res Judicata
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