Dwyer and Todd
[2017] FCCA 41
•17 January 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DWYER & TODD | [2017] FCCA 41 |
| Catchwords: FAMILY LAW – Undefended property settlement. |
| Legislation: Family Law Act 1975 (as amended), ss.90SB(a) & (b), 90SM93) & (4), 90SF(3) |
| Cases cited: Stanford & Stanford [2012] HCA 52 |
| Applicant: | MS DWYER |
| Respondent: | MR TODD |
| File Number: | ADC 1706 of 2015 |
| Judgment of: | Judge Mead |
| Hearing date: | 19 October 2016 |
| Date of Last Submission: | 19 October 2016 |
| Delivered at: | Adelaide |
| Delivered on: | 17 January 2017 |
REPRESENTATION
| Counsel for the Applicant: | Mr Hemsley |
| Solicitors for the Applicant: | Mellor Olsson |
| Counsel for the Respondent: | N/A |
| Solicitors for the Respondent: | N/A |
ORDERS
That in full and final settlement of any claim that either party may have or hereafter have against the other for settlement of property:
(a)That in accordance with Section 90MT(1)(a) of the Family Law Act 1975 (as amended) whenever a splittable payment becomes payable from Mr Todd’s interest in the (omitted) Trust Number (omitted), (omitted) Portfolio Services (“the Trustee”) shall pay Ms Dwyer an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using the base amount of $82,340 and that there be a corresponding reduction in the entitlement that Mr Todd would have had in the (omitted) Master Trust but for these orders;
(b)That the Trustee must comply with the obligations imposed upon the Trustees in eligible superannuation plans under the Act and the Family Law (Superannuation) Regulations 2001;
(c)That the operative time of these orders is the fourth business day after the day on which the final sealed, signed orders are served on the Trustee;
(d)Within 7 days of the date of these orders:
(i)The applicant serve a true copy of the sealed copy of these orders on the Trustee; and
(ii)The applicant give notice in writing to the Trustee of her full name, postal address and date of birth.
(e)That each party be otherwise entitled to retain all items of personalty presently in their possession or control free of any claim by the other of them, including but not limited to household furniture and effect, chattels, motor vehicles, shares, savings, investments, superannuation entitlements (subject to paragraphs 1(a) to 1(d) hereof) and any other items of personalty whatsoever not specified herein.
That the applicant at the exoneration of the respondent pay and discharge from time to time as she shall be called upon by her mother and step-father Mr G and Ms W so to do monies advanced to the parties by the said Mr G and Ms W during the period of the relationship as acknowledged by the respondent in paragraph 43(xxii) on page 9 of his affidavit filed 19 February 2015 and monies advanced expended to prepare the Property P property for sale and to complete the settlement in respect of the sale of that property and to the applicant by way of payment of legal fees to the exoneration of the respondent and that she indemnify the respondent in respect thereof.
Liberty to either party to apply as to consequential orders.
That all extant applications be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Dwyer & Todd is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC 1706 of 2015
| MS DWYER |
Applicant
And
| MR TODD |
Respondent
REASONS FOR JUDGMENT
Introduction
By application filed 15 May 2015 the applicant Ms Dwyer sought both parenting orders and orders for settlement of property.
The respondent filed a response on 19 August 2015 wherein he cross-applied for both parenting orders and orders for settlement of property. At the time of the filing of the response he was legally represented.
On 8 October 2015 his solicitors filed a notice of intention to withdraw and on 5 November 2015 filed a notice of withdrawal as lawyer.
On 4 July 2016, after the respondent failed to attend at hearings on 29 March 2016, 12 April 2016, 10 May 2016 and the hearing on 4 July 2016, the court finalised parenting orders with a default order providing for the parties child X aged nearly 8 years at the time to live with the mother and spend time with the father on alternate weekends and overnight each Wednesday. At the same time property matters were listed for trial on an undefended basis on 19 October 2016.
The respondent, having failed to attend at the hearings to which I have referred and at the adjourned directions hearing of 2 September 2016 then attended at the further adjourned directions hearing on 5 October 2016. At this time he made an oral application that the court set aside the order for the undefended hearing such that he could participate in the proceedings. For reasons given on that day the court declined to accede to the respondent’s proposal and the matter proceeded on an undefended basis on 19 October 2016.
Mr Todd was present in the body of the court during the hearing.
Background
The applicant is currently aged 43 years and the respondent is 39 years old. The respondent deposed to a relationship commencing in (omitted) 2004 and to the parties commencing cohabitation on (omitted) 2008. The applicant deposed to cohabitation commencing on (omitted) 2009.
The parties child X was born on (omitted) 2008.
The parties separated on 14 April 2014 at which time the applicant, the parties son X and the applicant’s daughter Y (now aged 16 years) left a property the parties had purchased at Property P. The applicant and the children moved into rented accommodation.
On 15 May 2015 the applicant initiated the proceedings referred to in paragraph 1 hereof.
In the applicants initiating application she had sought an interim order that the Property P property be listed for sale by private treaty for no less than $285,000.
In her affidavit filed 15 May 2015 she deposed to seeking the order on an interim basis because of the consistency of default by the respondent with respect to mortgage payments since separation and the distressing impact of that on her mother and step-father in circumstances where they were receiving regular letters of demand from (omitted) Bank because of them having provided a guarantee with respect to the mortgage to the extent of $50,000.
At the hearing on 17 August 2015 the court adjourned directions and interim issues including the question of immediate sale of the former matrimonial home to 16 November 2015. A conciliation conference was ordered to occur on 16 October 2015.
The respondent’s legal representative attended at the conciliation conference with Registrar De Corso at 9:15am on 16 October 2015 as did the applicant and her legal representative. The respondent, according to the Registrars report attended at the conference somewhere between 9:30am and 10:00am and the matter did not resolve.
On 16 November 2015 the respondent appeared in person. The matter was adjourned to the following day in circumstances where he advised the court that he had been able to negotiate, to the satisfaction of the (omitted) Bank, the payment of arrears and correspondingly the cessation of the demand process being taken by the (omitted) Bank.
The court also ordered that the applicant and/or her legal representatives be at liberty to speak with (omitted) Bank as to the action that they were taking in circumstances where it was impacting on the applicant’s mother and step-father.
On 17 November 2015 the respondent again attended in person. The court ordered that the respondent pay the applicant’s costs of the conciliation conference thrown away in the sum of $770 together with costs of the attendances on each of 16 and 17 November 2015 in the sum of $385 on account of each hearing.
The Court ordered inter alia that the matter be listed for trial at 10:00am on 19 October 2016 and that on or before 23 November 2015 the respondent file and serve a notice of address for service in circumstances where his legal representatives has ceased acting for him. The matter was adjourned further to 29 March 2016.
These orders were made after the respondent had read out in court correspondence received by SMS text message on his mobile telephone confirming an agreement he had entered into with (omitted) Bank to remedy the arrears, being an immediate cash payment of $10,000 and thereafter payments of $3,687.65 per month in lieu of the usual $1,944 per month for a period of six months.
The respondent did not appear at the hearing on 29 March 2016. The court ordered that on the adjourned hearing at 2:15pm on 12 April 2016 the court would be dealing with in alia, orders with respect to interim property settlement flagged by the mother’s counsel. The applicant was given a return date of 12 April 2016 at 2:15pm for any application in a case she sought to file.
The court also ordered on that occasion in paragraph 3 as follows:
“Failure by the respondent to attend on the adjourned hearing may result in interim orders with respect to parenting issues and property settlement being made in the absence of the respondent on the adjourned hearing”.
The respondent was given an opportunity to file a further affidavit by 4:00pm on 7 April 2016.
On 5 April 2016 the applicant filed an application in a case seeking, inter alia, that the respondent vacate the Property P property by 1:00pm on Tuesday 19 April 2016, for the respondent to sign an Authority as provided to him to enable her and/or her legal representatives to obtain information from (omitted) ((omitted) Bank) in relation to the state of the mortgage and for the applicant to be appointed as Trustee for sale of the property. That application was served personally on the respondent at 4:40pm on 5 April 2016 (affidavit of service filed 7 April 2016).
The application came before Judge Cole on 12 April 2016. The respondent did not appear. The court made extensive orders in accordance with the application for vacant possession and for the applicant to be appointed as Trustee for the respondent for the purposes of the sale of the property. The matter was further adjourned to 10 May 2016.
In the affidavit of the applicant filed in support of the application in a case she deposed to not being aware of the current status of the mortgages over the property and not being able to obtain information from the bank. She deposed to her mother likewise continuing to receive default notices from the bank but being unable to gain any information as to the status of the mortgage.
She deposed to attending at the Property P property on the weekend of 5 and 6 March 2016, the respondent declining to permit her to remove any items from the property and telling her that he just wanted to wait and see what was happening with the house. She deposed to being concerned about whether the property remained insured.
The applicant deposed to the respondent reading out to the court on 17 November 2015 from his mobile phone the terms that he had apparently agreed with (omitted) Bank at that time to regularise the mortgage being an immediate cash payment of $10,000 and thereafter payments of $3,687.65 per month for six months to remedy the arrears.
She further deposed to (omitted) Bank statements annexed to the affidavit of her solicitor filed on 21 March 2016 evidencing a payment of $10,000 on 20 November 2015 but thereafter monthly payments continuing as previously leaving a shortfall of $1,743.65 per month.
The applicant also deposed to her solicitor by then negotiating with the solicitors for (omitted) Bank in relation to action being taken by the bank for possession of the property.
At the adjourned hearing of 10 May 2016 the respondent again failed to attend. The court noted from submissions from the applicant’s counsel that he appeared to have almost vacated the former matrimonial home with only limited possessions left to remove from the property, and that he had changed all of the locks on the property. The court also noted the applicant’s intention to place the property on the market for sale, in accordance with the orders of Judge Cole, as soon as possible after repairs were effected.
An order was made on 10 May 2016 for the respondent to deliver all keys for the Property P property to the office of the applicant’s solicitor by close of business on 13 May 2016, with the matter further adjourned to 4 July 2016 at 9:15am.
The court also ordered that the respondent attend personally on the adjourned hearing even if legally represented, and that failure by him to comply with that order would result in final orders being made with respect to children’s issues in his absence and property settlement issues being listed for trial on an undefended basis.
The respondent did not appear at court on 4 July 2016. At this time final orders were made by default with respect to parenting issues and the property trial listing of 19 October 2016 was defined as a trial on an undefended basis.
The Law
It was common ground on the case of both parties that they had lived together in a de-facto relationship between either (omitted) 2008 (respondent’s case) or (omitted) 2009 (applicant’s case) until 14 April 2014. In those circumstances I am satisfied that division 2 of Part VIII AB of the Family Law Act 1975 (as amended) applies where the period of the de-facto relationship was at least five and possibly six years[1].
[1] s.90SB(a) Family Law Act 1975 (as amended)
In addition there was a child of the de-facto relationship[2].
[2] s.90SB(b) Family Law Act 1975 (as amended)
The court is required to find, as a preliminary matter, that it is just and equitable to make an order for alteration of property interest pursuant to Section 90SM of the said Family Law Act 1975[3].
[3] Stanford & Stanford [2012] HCA 52
In considering whether or not to make an order pursuant to Section 90SM it must make findings as to the asset pool, consider contributions made to the asset pool directly or indirectly, financial or non-financial[4] and by way of home making and parenting made by each of the parties and then consider the needs of the parties[5].
[4] s.90SM(4)
[5] s.90SF(3)
In addition, the court must not make an order under the Section unless it is satisfied that in all of the circumstances it is just and equitable to make the order[6].
[6] s.90SM(3)
At the time of trial there were no assets or liabilities in the joint names of the parties. The property at Property P had been sold resulting in a loss to the parties. To enable settlement to be effected without a negative impact on the credit rating, in particular of the applicant, the loss was remedied by the applicant’s mother and step-father.
The ability of the applicant to summarise the asset pool was limited because of the failure on the part of the respondent to engage in the proceedings. The only material before the court from the respondent was his response, affidavit in support and financial statement filed on 19 August 2015.
The only property of any significance that the applicant was able to identify at the time of trial was the respondent’s interest in the (omitted) Master Trust superannuation fund as ascertained by the applicant.
Nevertheless, certain significant post-separation contributions had been made on behalf of the applicant by her mother and step-father in circumstances necessitated by, on the applicant’s case, the failure of the respondent to pay mortgage repayments in respect of the mortgage secured over the parties home post-separation, as well as his failure to pay council and other rates, fines incurred, car payments and to properly maintain the property.
This is a matter where I consider it is necessary for the court to consider the parties respective contributions to the asset pool both during the period of cohabitation and post-separation, as well as the parties needs, prior to being in a position to determine whether any order should be made altering the parties interests in the only property available to be subject to such alteration, namely, the respondent’s superannuation entitlements and if so, what order would affect justice and equity as between the parties.
Asset Pool
The applicant deposed to neither party having any assets of significance at the time of commencement of cohabitation other than the respondent having some guitars, a synthesiser, utilities, tools and some superannuation. She deposed to owning a full house of furniture, some (omitted) memorabilia and a station wagon.
The respondent deposed in paragraph 18 of his affidavit filed 19 August 2015 to having guitars and a synthesiser to the value of $21,500, tools valued at $2,000, a Holden utility motor vehicle valued at $4,000 and superannuation as at 1 July 2008 with (omitted) in the sum of $26,168.98.
The respondent deposed to the applicant having significant credit card debts at the commencement of their relationship but to them having been paid in full or nearly paid in full by the time the parties commenced cohabitation.
During the parties relationship the respondent worked full-time for (employer omitted). He deposed to income of $56,000 plus Christmas bonus, $76,000 plus $25,000 bonus, $86,000 and no bonus and $110,000 and no bonus in the financial years ending 30 June 2009 to 30 June 2012 inclusive.
The applicant undertook some family day-care from the parties home but it was common ground that the provision of day-care caused some difficulties in the parties relationship such that the applicant eventually ceased that work and commenced work as a (occupation omitted). That was initially on a very limited part-time basis but increased over the years. The applicant was otherwise engaged in home duties and caring for the parties child X and the applicant’s child Y.
In June 2009 the parties purchased a property at Property P. The property cost $285,000. The property was placed in the respondent’s sole name as the applicant had a bad credit rating. The mortgage was also in the sole name of the respondent. The deposit was paid with a first home buyers grant in favour of the respondent and the balance of $278,000 was borrowed from (omitted) Bank.
The applicant’s mother and step-father Ms K and Mr G provided a guarantee for the loan to the extent of $50,000.
It was the applicant’s evidence that she and the respondent agreed that they would seek to have her mother and step-father released from the guarantee within five years of them providing same. This did not occur.
In 2011 the parties travelled overseas at which time the home loan was “in advance”. The applicant deposed to the respondent re-drawing on the mortgage to pay for the overseas trip.
The respondent denied that allegation but agreed that monies were withdrawn to provide for spending money for the holiday and also to purchase an engagement ring for the applicant.
On 14 April 2014 the applicant and the children left the property. The applicant placed a Caveat over the property in December 2014. The respondent remained living in the property.
Subsequent to separation certain mortgage repayments were not made resulting in default notices not only to the respondent but to the applicant’s parents. This was acknowledged by the respondent in paragraph 33 of his affidavit filed 19 August 2015.
The applicant deposed to efforts being made both through her step-father and then through her solicitor to reach agreement with the respondent for the property to be sold such that her mother and step-father would be released from the guarantee upon the mortgage being discharged.
In paragraph 37 of the respondents affidavit filed 19 August 2015 he deposed to wanting to retain the former matrimonial home but not being able to seek finance to purchase the applicant’s interest in the property and refinance it so long as the applicant had a Caveat over the property. I do not accept that evidence in circumstances where clearly the caveat would be discharged at settlement.
In paragraph 39 of the same affidavit the respondent deposed to his view that neither he nor the applicant were in a position at that time to advise the court as to his suitability for a loan and mortgage facility. Again I consider that evidence to be self-serving and indicative of a desire to delay matters.
In paragraph 41 of the same affidavit he refuted the allegation of the applicant that he had applied for finance and been refused. He said rather that he had arranged to place repayments on hold.
In paragraph 42 of the same affidavit he deposed to understanding that if he could not refinance the property it would need to be sold.
At the time the parties separated and the applicant left the Property P property in April 2014 their assets consisted of the property at Property P, the contents of the property, various motor vehicles, the husbands tools and collectable guitars and synthesiser and the wife’s (omitted) memorabilia. The wife deposed to those assets in paragraph 32 of her affidavit filed 15 May 2015. The respondent had modest superannuation entitlements and the applicant almost no superannuation.
In her financial statement filed at the same time she also deposed to the value of her household furniture and effects at $2,000, a Holden motor vehicle registered in her name at $4,000 and (omitted) memorabilia at $1,000, a debt to her parents in the sum of $4,000, a credit card debt in her name in the sum of $1,000 and a debt to Radio rentals in the sum of $500.
In the respondents affidavit filed on 19 August 2015 he deposed in paragraph 43 as to the parties assets and liabilities.
The parties were in dispute as to the value of the Property P property with the applicant alleging it had a value of $320,000 and the respondent alleging a value of $285,000. The property was never valued. It was eventually sold two and a half years later for $300,000.
The parties were in dispute as to the value of the respondents Subaru motor vehicle, with his evidence being that it was worth $10,500 and the applicant alleging a value of $20,000. There were no valuations.
The parties were agreed as to the value of the respondent’s Holden utility motor vehicle but not as to the Holden Commodore motor vehicle where the respondent alleged a value of $500 and the applicant $1,000. There were no valuations.
The respondent alleged a Kia Carnival motor vehicle in the possession of the applicant had a value of $2,500 with the applicant saying it was a wreck initially retained by the husband and then sold by her for $350.
The respondent alleged that the applicant had furniture and effects in her possession with a value of $24,400. There is no evidence that would substantiate such an allegation and I accept the applicant’s evidence to the effect of having household furniture and effects in her possession with an estimated value of $2,000.
The respondent deposed to his furniture, effects and tools having a total value of $4,500 with the applicant suggesting they had a total value of $10,000. These items were not valued.
The respondent alleged a value of $24,500 for his three guitars and synthesiser with the applicant deposing to a value of $40,000. There were no valuations.
The respondent deposed to the applicant’s (omitted) memorabilia being worth $4,000 with the applicant’s evidence being that it had a value of $1,000. It was not valued.
The applicant deposed to the respondent having a collection of remote control cars/boats/helicopters/drone with a value of $2,000 which was not mentioned by the respondent. There was no valuation.
As none of the assets were valued I propose to adopt the valuations ascribed to the relevant assets by the party in whose possession the asset was at the time of the swearing the affidavit. To adopt any other approach, notwithstanding the respondent’s lack of participation, may result in findings that create significant injustice for one or other party. The assets are of a very modest nature.
The applicant deposed in paragraph 34 of her affidavit filed 15 May 2015 to obtaining $350 for the Kia motor vehicle as a wreck and to having to borrow $4,000 from her mother and step-father to buy another vehicle. These were the vehicle and debt referred to in the applicant’s financial statement filed 15 May 2015. The respondent deposed to the applicant leaving the Kia vehicle at the Property P property at separation as it was not road-worthy, to the applicant taking the vehicle from the Property P property in December 2014 when he was away and to his belief that she disposed of the vehicle at less than the market value. I accept the applicant’s evidence in relation to the sale of the wreck.
The applicant deposed in her same affidavit to a mortgage liability to the (omitted) Bank in the name of the respondent in the sum of $285,000, to an (omitted) Credit Union vehicle loan in the name of the respondent in the sum of $20,000 and to a credit card liability of the respondent in the sum of $10,000.
The respondent deposed to liabilities in his affidavit filed 19 August 2015. He said he was indebted to the (omitted) Bank in respect of the mortgage in the sum of $268,122. He deposed to the (omitted) Credit Union car loan having a balance of $14,500 and to having an (omitted) credit card with a debit balance of $13,500.
He also deposed to the parties having borrowed monies from the applicant’s mother during their relationship in the sum of $17,499.
I find that at separation on 14 April 2014 the parties had in their respective possession or control the following assets and liabilities:
a)As to the applicant:
| Assets | |
| Household chattels | E $2,000 |
| Kia motor vehicle wreck | Sold for $350 |
| (omitted) memorabilia | $1,000 |
| (omitted) Bank savings | Nil |
| Holden Commodore (subject to loan) | E $4,000 |
| Superannuation entitlements | $694 |
| Liabilities | |
| Loan from mother and step-father for the Holden Commodore | $4,000 |
| (omitted) Visa credit card | $1,000 |
| Radio Rentals | $500 |
b)As to the respondent:
| Assets | |
| Property situate at Property P | E $285,000 |
| Subaru (omitted) motor vehicle | E $10,500 |
| Holden utility motor vehicle | E $2,000 |
| Commodore motor vehicle | E $500 |
| Furniture and effects and tools | E $4,500 |
| Guitars and synthesiser | E $24,500 |
| Savings accounts – (omitted) Bank and (omitted) Credit Union | Nil |
| Liabilities | |
| Mortgage to (omitted) Bank | $268,122 |
| (omitted) Credit Union car loan | $14,500 |
| (omitted) credit card | $13,500 |
In circumstances where the respondent alleged a joint debt to the applicant’s mother and step-father of $17,499 and omitting reference at this time to the property at Property P the respondent retained assets at separation of $42,000 with liabilities in his sole name of $36,750. As at 30 June 2014 the respondent’s superannuation entitlements totalled $82,901.43[7].
[7] Respondents financial statement filed 19 August 2015
The applicant retained assets to a value of $3,350 as well as superannuation entitlements of approximately $700. I have excluded the value of the Holden Commodore purchased post-separation with funds provided by the applicant’s mother and step-father. On the respondent’s case she had a further liability to her mother and step-father in the sum of $8,750.
The applicant had debts of $1,500 excluding the $4,000 debt for the Holden Commodore.
In paragraph 43 of the respondent’s affidavit filed 19 August 2015 he deposed to a value of the Property P property of $285,000 against a mortgage liability of $268,122, leaving equity on his case of $16,878. He did not depose to any arrears of mortgage at that time or outstanding rates and/or taxes.
The only debts to which he deposed, in addition to the mortgage, were a (omitted) Credit Union car loan and an (omitted) Bank credit card as well as the debt to the applicant’s mother and her husband.
Following upon the parties separation on 14 April 2014 the respondent remained living in the Property P property until he vacated same on or about 14 April 2016 following upon the orders of Judge Cole made on 12 April 2016.
On 4 April 2016 the applicant had filed an application in a case seeking orders for the sale of the Property P property and orders to enable her legal representatives to obtain information as to the outstanding mortgage over the Property P property from (omitted) ((omitted) Bank), in circumstances where the respondent was defaulting on the mortgage payments as evidenced by letters of demand to the applicant’s mother and step-father from (omitted) Bank.
At the hearing referred to in paragraph 17 hereof the respondent appeared in person. As previously referenced to herein he advised the court that he had reached agreement with (omitted) Bank to reduce the mortgage arrears to a balance acceptable to the bank, and he read onto the transcript at the request of the court the terms of that agreement, being a $10,000 lump sum reduction of both mortgage loans and a combined monthly payment of $3,687.65 for six months to bring all arrears into order.
The respondent advised the court on that occasion that he had recently received a redundancy payment of $28,000 and that it was from those funds that he would be in a position to make good the mortgage arrears.
The normal monthly repayments required on the accounts totalled $1,944[8].
[8] Annexure “CJL 4” to affidavit of Ms C filed 21 March 2016
On 20 November 2015 the respondent paid the total amount of $10,000 in reduction of the two mortgage accounts being one payment of $2,745.35 and a second payment of $7,255. As at that date the total mortgage liability was $265,578 prior to the payment and $255,578 after the payment.
It is not possible to accurately calculate the balance of the mortgage as at that date if payments had been made by the respondent when they fell due. The respondent had the opportunity to put that material before the court but failed to do so and this was not a matter where the applicant had the financial resources to be able to afford to subpoena all relevant bank statements.
Subsequent to the lump sum payment made by the respondent on 20 November 2015 the applicant’s mother continued to receive default notices from (omitted) Bank[9].
[9] Paragraph 7 of the applicant’s affidavit filed 1 April 2016
In early 2016 (omitted) Bank instituted proceedings in the Supreme Court of South Australia for vacant possession of the Property P property. It was that step that lead the applicant to file an urgent application in a case to enable her to sell the property.
Subsequent to the respondent vacating the property on or about the weekend of 14 April 2016 neither party paid the mortgage. The applicant’s evidence contained in her affidavit filed 4 October 2016 was that she was able to negotiate with (omitted) Bank and was given time by the bank to attempt to market the property, pursuant to the order of Judge Cole.
Prior to the applicant being able to market the property work had to be done to bring the house to a standard where it was suitable to be marketed. In circumstances where the applicant had no funds to meet that expense she was assisted by her mother and step-father, with them expending $9,755.12 initially on those repairs and improvements[10].
[10] Paragraph 5 of the affidavit of Mr G filed 29 September 2016
A contract for sale of the Property P property was signed on 31 August 2016 with the purchasers initial offer of $304,000 increasing to $306,000 after negotiation with the applicant[11]. The price was eventually reduced to $300,000 when the purchasers obtained advice after an inspection that a new roof at a cost of $6,000 was required.
[11] Paragraph 7 of the applicant’s trial affidavit filed 4 October 2016
At the time the conveyancer prepared settlement statements the applicant ascertained that council and water rates and emergency services levies had not been paid for some years, with the total of such outstanding rates and services being $10,288.27. At settlement however the vendor was credited with adjustments of $1,292.60. The arrears therefore totalled $8,995.67.
In addition the applicant became aware that the (omitted) Credit Union had registered a charge against the property on 21 January 2016 in circumstances where the credit union had obtained a judgment against the respondent when the respondent defaulted in respect of the Subaru car loan. The amount required to discharge that charge at settlement was $15,907 (settlement statement tendered).
In addition the respondent had incurred certain fines which he had not paid. Annexure “CJL 2” to the affidavit of Ms C filed 5 October 2016 is a copy of documents produced pursuant to a subpoena to the Fines Enforcement and Recovery Unit with respect to the records of the respondent. Between 19 December 2013 and 5 June 2015 the respondent committed 12 driving offences according to those records. Three of the offences occurred before the date of separation namely 14 April 2014.
At separation the amount owing by the respondent was $1,019 but at settlement the amount required to discharge the charge over the property was $5,542.43. That was $4,423.43 more than was owing by the respondent at separation.
The amount required to discharge the mortgage at settlement was $269,093.15.
It is impossible without bank statements to calculate the amount that would have been owing in respect of the mortgage at settlement had the respondent paid mortgage payments as and when they fell due during his period of occupation. If he had done so there would have been no need for an order on an interim basis for the sale of the property requiring him to give vacant possession of the property. It was clear, at least by November 2015, that there was no likelihood of the respondent being able to retain the property and it is unfortunate for both parties that he did not appropriately respond to the applicant’s efforts to sell the property by agreement.
At settlement the applicant borrowed the sum of $10,600.50 from her mother and step-father to enable settlement to proceed and avoid adverse credit ratings against her and the respondent. That was in addition to the $9,755.12 that they had provided to bring the property up to standard for sale, and in addition to the loan of $17,499 the respondent alleged the parties owed Mr G and Ms W as at the date of his affidavit filed 19 August 2015.
Counsel for the applicant set out in his case outline document a calculation suggesting that if mortgage repayments had been made by the respondent to the time of sale the mortgage balance would have been approximately $235,200 being some $34,000 less than the actual amount required to effect settlement. I cannot be satisfied that such a calculation is correct.
As at 19 August 2015 the respondent deposed to the mortgage balance being $268,122. As at 20 November 2015 prior to the lump sum repayment of $10,000 to reduce arrears the mortgage balance was $265,578. At settlement the amount required to discharge the mortgage exceeded the amount owing as at August 2015 by $971. There was no evidence before the court as to the amount owing in respect to the mortgage as at the date of separation on 14 April 2014.
The respondent lived in the property post-separation for almost exactly two years, and in the months following his vacation of the property after an order for vacant possession was made in this court on 12 April 2016, the applicant was required to bring the property up to a standard to enable it to be placed on the market for sale in or about August 2016.
The effect of the respondent’s occupation of the former matrimonial home post-separation was that by the time of sale the amount owing in respect of the mortgage had increased slightly from the amount owing in August 2015, with the husband having defaulted in respect of mortgage repayments regularly since separation[12]. This was conceded by the respondent in paragraph 33 of his affidavit filed 19 August 2015.
[12] Applicants affidavit filed 15 May 2015, paragraph 22
In addition to the mortgage clearly being higher at settlement than it would otherwise have been had the respondent met the mortgage commitments as and when they fell due during his period of occupancy, he also defaulted in respect of his Subaru (omitted) motor vehicle loan and his traffic fines, such that an additional $20,330 was required at settlement to discharge charges placed over the Property P property by (omitted) Credit Union and Fines Enforcement and Recovery Unit.
In addition the respondent had failed to pay rates, taxes and emergency services levies to the extent of $8,995.67 during his period of occupancy, although of course there was the period between April 2016 and October 2016 when neither party resided in the property and neither party either made mortgage repayments or payments in reduction of council and water rates and emergency services levies.
Taking all of those matters into account it is clear that it is not possible to accurately calculate a pool of assets and liabilities. The only certainty is that at the time of trial the only existing asset of any significance was the respondent’s superannuation entitlements. I am satisfied that as at the date of separation, taking into account the assets and liabilities retained by each of the parties and excluding the former matrimonial home, they each retained minimal assets.
Clearly the husband defaulted in respect of the Subaru motor vehicle loan leading to the judgment against him and the charge that had to be discharged at settlement by the applicant. Even if that was removed from the list of liabilities retained by the respondent at separation in the sum of $14,500, there is no doubt that the finance company would have taken possession of the Subaru motor vehicle so that really what the respondent ended up retaining was two motor vehicles with a value of $2,500, some modest furniture and effects and tools as well as a collection of guitars and a synthesiser which he owned at the commencement of cohabitation.
I have already referred to the minimal assets retained by the applicant and noted that on the respondents case the parties at separation owed $17,500 in round figures to the applicants mother and step-father.
I have already referred to the respondent retaining a minimal amount of net assets at separation of about $5,000 excluding any interest in the Property P property. Those assets were all of a nature that would diminish in value in a short time frame.
At separation his two most significant liabilities, being a car loan and an (omitted) Bank credit card, totalled $28,000. Clearly the respondent made payments in respect of the reduction of the (omitted) Bank debt post-separation. The reality however is that he defaulted in respect of the Credit Union car loan such that at settlement of the sale of the Property P property in October 2016 the amount required to pay out that loan some two and a half years after separation exceeded the debt at August 2015 by some $1,400.
Contributions
I am satisfied for the reasons referred to in paragraphs 44 to 48 inclusive of these reasons that neither party had any assets of significance at the time cohabitation commenced and that their contributions during the course of cohabitation were equal based on what might be referred to as a “traditional” domestic arrangement, whereby the respondent was the primary bread winner and the applicant primarily engaged in home making and parenting.
The respondent accumulated debts post-separation by not making payments with respect to the emergency services levy, water rates and council rates as required and as would have been reasonable in the circumstances of him residing in the property until he vacated same upon an order being made for vacant possession.
In addition he defaulted on the mortgage to an extent that the court is unable to quantify noting there is no evidence as to the mortgage outstanding at the date of separation. As at 1 July 2015 the mortgage balance was $267,056 of which some proportion was arrears, the balance at 20 November 2015 was $265,578 before $10,000 was paid off the arrears bringing the balance back to $255,578 with arrears still owing, and the amount to discharge the mortgage at settlement was $269,093.15.
The property sold for $300,000. This was an amount approximately half way between what the applicant deposed to being the value of the property as at May 2015 and the respondent deposed to being the value of the property as at August 2015. Neither party were in a position to retain the property.
The costs of sale were just under $11,000 inclusive of agents fees, advertising, conveyancing and Land Titles Office fees. I find that would have been an expense of the parties in any event and that the amount available to the parties to cover the discharge of the mortgage, whatever that amount may have been, would have been approximately $289,000 if there had been no need to discharge charges over the property relating to debts incurred by the respondent in the total sum of approximately $21,449 as well as outstanding council rates, taxes and emergency services levies in the net amount of $8,995.
These sums of course do not include the amount of just under $10,000 expended by the applicant’s mother and step-father to ready the property at a basic level for sale and the further $10,600 provided by them at settlement to enable settlement to be effected without a shortfall. The respondent also of course acknowledged a debt to the applicant’s mother and step-father incurred prior to separation in the sum of approximately $17,500.
I find that the respondent’s actions in defaulting on his car loan and failing to pay his traffic fines as well as his failure to pay rates, taxes and emergency services levies as and when they fell due and his failure to pay mortgage repayments as and when they fell due resulted in a situation where it was not possible to effect settlement of the sale of the former matrimonial home without a shortfall. This would have had an adverse effect on the credit rating on each of the parties without the contribution made by the applicant through her mother and step-father in the sum of approximately $20,000 post-separation.
I find that the monies paid by the applicants mother and step-father to prepare the property for sale and effect settlement were a post-separation contribution on behalf of the applicant.
I find that the failure by the respondent to pay the sums to which I have referred were a negative contribution made by him post-separation, together with the default in respect of the mortgage over the Property P property.
I take into account that neither party was resident in the property after 14 April 2016 and that neither party paid the mortgage between then and settlement nor did either party contribute to rates, taxes or emergency service levies.
Nevertheless, as I have previously said, I consider the respondent’s actions in declining to agree to the applicants proposal to sell the Property P property shortly after separation was unreasonable and designed to cause the applicant financial stress. Accordingly the lack of mortgage repayments post the respondents vacating the Property P property and the rates and taxes accruing to that time should also be deemed to be the responsibility of the respondent.
It is not possible to fix an accurate figure to the financial loss occasioned to the parties by the actions of the respondent post-separation but I am satisfied that even excluding the loss occasioned in respect of the failure to maintain mortgage repayments, the respondents actions resulted in a loss to the parties of some $49,300 (rounded) attributable to the direct financial contributions made on behalf of the wife by her mother and step-father, the amounts required to discharge the charges with respect to the traffic fines and the car loan and the amounts required to pay the arrears of rates, taxes and emergency service levies.
Taking into account the amount required to discharge the mortgage at settlement of $270,000 (rounded) and the costs of sale at $11,000 (rounded) there would have been approximately $19,000 available to the applicant at settlement if there were no arrears of rates and taxes, the car loan had been paid and the traffic fines had been paid. That at least would have almost covered the direct expenditure of the applicant’s mother and step-father in terms of the expenses relating to the preparation of the property and the funds provided by them to enable settlement to proceed.
In the particular circumstances of this case I find that although the parties contributions during the period of cohabitation should be assessed as equal there should be a post-separation adjustment to the applicant in the sum of 20% such that overall contribution entitlements be assessed as 70% to the applicant and 30% to the respondent.
Post-separation the respondent advised the court at the hearing on 17 November 2015 that he had received a redundancy payment of $28,000 and was no longer employed. There was no other information before the court as to any other sums he may have received by way of long service leave and the like upon cessation of his employment nor any details of that cessation.
There is no doubt that $10,000 of those funds were utilised by the respondent by way of post-separation contribution to the reduction of the mortgage arrears. There is no evidence as to the purpose to which the remaining $18,000 was applied by the respondent.
I do not regard this as a post-separation contribution by the respondent in circumstances where the only effect of the payment of $10,000 was to reduce to some extent arrears in respect of the mortgage incurred by the respondent during his period of occupancy of the property whilst he was employed.
I am satisfied that the applicant contributed in some part to the redundancy payment received by the respondent in circumstances where for five to six years over the period during which he became entitled to receive a redundancy from his long-term employer the parties were resident together and the applicant was attending to household duties and parenting duties of the parties child.
Section 90SF(3) Factors
The applicant is 43 and the respondent is 39. There was no evidence before the court to suggest that either party were not in a reasonable state of health.
The applicant’s income is minimal and she is otherwise dependent on Centrelink payments. At the time of filing her financial statement on 15 May 2015 she was receiving child support in the sum of $292 for the child Y and $110 from the respondent for the child X. It was clear however that by November 2015 that the respondent was unemployed and the state of his employment post that time is unknown to the court.
As at 4 October 2015 the respondent was in arrears of child support in the sum of approximately $3,000[13].
[13] Applicants affidavit filed 4 October 2016, paragraph 37
The property of the parties is negligible save as to the respondent’s superannuation entitlements, which as at 30 June 2016 had a withdrawal benefit of $101,098.51[14]. There is no evidence as to the parties having any other financial resources.
[14] Annexure “CJL 1” to affidavit of Ms C filed 5 October 2016
There is no evidence that either party lacks physical or mental capacity for appropriate gainful employment.
The applicant’s primary occupation during the period of the relationship and post-separation has been as a homemaker and parent to her older child Y and to the child of her relationship with the respondent, X and she continues to work part-time as a (occupation omitted).
The respondent was employed for many years with (employer omitted) but it appears that employment finished in or about late 2015 and there is no evidence as to whether he has resumed appropriate gainful employment.
The applicant has the care and control of the child X who is aged 8 years. There is no evidence that X does not spend time with the respondent in accordance with the default orders made on 4 July 2016. This order provides for the child to spend three overnight periods in every 14 days with the respondent, including one weekend from Friday evening to Sunday evening and one overnight on a Wednesday.
The applicant has financial commitments to support herself as well as the parties child X and her child Y. Her evidence is that she receives child support with respect to the child Y. She deposes to modest commitments totalling $480 per week in her financial statement filed 15 May 2015.
The respondent has commitments necessary to maintain himself and a financial responsibility to assist to maintain the parties child X. He did not adduce evidence in his financial statement filed 19 August 2015 to living expenses.
The applicant is eligible to receive Centrelink benefits and deposed to receiving Family Tax Benefits of $110 per week and a Parenting Pension of $290 per week in her financial statement filed 15 May 2015.
There is no evidence as to the amounts she received by way of Centrelink benefits as at any later date. I am satisfied however that at the time of trial she remained in receipt of Centrelink benefits and otherwise was working on a limited part-time basis.
As to a standard of living that in all of the circumstances is reasonable, evidence would suggest that the parties standard of living prior to separation was reasonable based on the respondent’s evidence as to his income and the fact that he owed the property in which the parties resided albeit that it was subject to mortgage.
Post-separation the respondent remained living in the former matrimonial home until about 14 April 2016. His living arrangements since that time are not in evidence.
The applicant deposed to a rental commitment of $285 per week in her financial statement filed 15 May 2015. There is no further evidence before the court as to the applicant’s living circumstances at the time of trial but I am satisfied that the applicants minimal rent commitments and her minimal income is suggestive of a standard of living that is modest indeed. This is unlikely to be alleviated to any significant degree by any orders the court may make in these proceedings in light of the parlous state of the asset pool.
I find that the applicant contributed to the income earning capacity and property of the respondent during the period of the relationship by assuming the primary responsibility for household and parenting duties. The applicant continues to have the primary parenting role with respect to the parties child X who has at least another eight to ten years of schooling left, during which time I am satisfied that the applicant will continue to be responsible for his primary care.
There was no evidence of either party cohabiting with any other person.
I find that post-separation and particularly since mid to late 2015 the applicant has received little or no child support from the respondent to the extent that as at early October 2016 there were child support arrears of some $3,000.
The respondent did not elect to bring any evidence before the court to inform as to the reasons that he ceased his employment or any efforts that he has made since that time to obtain further employment and I am satisfied that it is unlikely that the applicant will receive any significant child support in the immediate to near future at least.
As to any fact or circumstances in which the opinion of the court the justice of the case requires to be taken into account, I have already referred at length under the heading of “contributions” to the financial stress and distress caused to the applicant by the respondents actions in failing to maintain mortgage repayments, payments with respect to rates, taxes and emergency services levies, payments with respect to his motor vehicle and payments with respect to outstanding traffic fines.
This has resulted in significant financial stress to the applicant’s mother and step-father as well as to the applicant and significantly reduced the availability of assets for distribution between the parties.
The only asset that remains is the respondent’s superannuation.
I am satisfied that in addition to the 20% adjustment made in favour of the applicant in my assessment of contributions there should be a further 10% adjustment to the applicant with respect to her primary physical and financial responsibility for the parties 8 year old child X, the superior earning capacity of the respondent evidenced by his earnings during the course of the relationship and his ability to maintain that employment whilst the applicant remained at home to provide care for the parties child X and maintain the household and the lack of payment of child support to the applicant at least between late 2015 and October 2016 resulting in arears of approximately $3,000 together with the lack of any evidence from the respondent to reassure the court or the applicant that child support would be paid by the respondent in the future.
Conclusion
For all of the reasons to which I have referred I consider that this is a matter where an order should be made to alter the parties interests in property notwithstanding that the only asset remaining is the respondents superannuation entitlements. I do not consider there is any other way to effect justice and equity as between the parties.
Although the respondent received a redundancy payment of $28,000 in or about late 2015 he utilised some $18,000 of that sum for his own purposes and I am satisfied that none of those funds would be available to satisfy any order the court may make with respect to alteration of property interests.
At the commencement of cohabitation it was the respondent’s evidence contained in paragraph 43 of his affidavit filed 19 August 2015 that he had superannuation entitlements as at 30 June 2014 being some two and a half months after separation of $82,900 (rounded).
Annexure “CJL 1” to the affidavit of Ms C filed 5 October 2016 contains evidence that the respondent joined the (omitted) Master Trust on 5 November 2001, some three years prior to the parties commencing a relationship and either some seven years prior to them commencing to cohabit, according to the respondent, or nearly eight years prior to that date, according to the applicant.
In paragraph 18 of the respondent’s affidavit filed 19 August 2015 he deposed to having superannuation entitlements as at 1 July 2008 being a date some two months prior to the commencement of cohabitation, according to him, in the sum of $26,168.98.
The value of the respondent’s superannuation, according to his financial statement filed 19 August 2015, as at 30 June 2014 some two and a half months post-separation was $82,901.43.
As at June 2016 that had increased to $101,098.
Notwithstanding that the respondent contributed to the fund to the extent of at least $26,169 prior to the parties commencing cohabitation and that it has grown approximately $20,000 post-separation, I find that justice and equity can only be served in this matter, taking into account the losses caused to the parties by the respondents financial irresponsibility post-separation, by altering the interests of the parties in that property based on the current value of the entitlement.
An 80% division of that asset in favour of the applicant would result in a split of the respondent’s entitlement with a base of $80,878 (rounded to $80,800). At the very least the applicant may then be in a position to access her entitlement to those funds on hardship grounds such that she can reduced to some level the debt owed to her parents noting that the parties owed her mother and step-father the sum of $17,500 at the time of separation, and that subsequently they have paid the sum of approximately $20,000 to ready the property for sale and pay the shortfall at settlement to avoid both parties credit rating being adversely affected.
The applicants mother and step-father have also paid significant sums towards the applicants legal fee but I am not satisfied that there is any further adjustment that should be made on behalf of the applicant in that regard, save as to the orders for costs in the sum of $1,540 contained in paragraph 2 of the order of 17 November 2015. That will alter the base amount to $82,340.
Failure by the court to make an order altering the interests of the respondent in his superannuation fund would result in a grave injustice to the applicant, who has suffered financial loss as a result of the negative contribution made by the respondent to the parties assets post-separation and would ignore her responsibility for the physical and financial support of the parties child who is still only 8 years old.
For those reasons I make the following orders.
I certify that the preceding one hundred and sixty-six (166) paragraphs are a true copy of the reasons for judgment of Judge Mead
Date: 17 January 2017