Eades and Eades
[2009] FMCAfam 1165
•20 November 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| EADES & EADES | [2009] FMCAfam 1165 |
| FAMILY LAW – Property – assessment of post separation contributions and section 75(2) factors – impact of section 81 on the type of orders to be made. |
| Family Law Act 1975, ss.75, 79, 81 |
| Apathy and Apathy (1977) FLC 90-250 Dench and Dench (1978) FLC 90-469 Woolley and Woolley (No 2) (1981) FLC 91-011 Clauson and Clauson (1995) FLC 92-595 Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 |
| Applicant: | MS EADES |
| Respondent: | MR EADES |
| File Number: | MLC 3407 of 2008 |
| Judgment of: | Bender FM |
| Hearing dates: | 19 & 20 October 2009 |
| Date of Last Submission: | 20 October 2009 |
| Delivered at: | Melbourne |
| Delivered on: | 20 November 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Wood |
| Solicitors for the Applicant: | Adrian Abrahams Family Lawyers |
| Counsel for the Respondent: | Mr Spicer |
| Solicitors for the Respondent: | CE Family Lawyers |
ORDERS
The husband forthwith do all such acts and things and sign all such documents as may be required to transfer to the wife at the expense of the wife, (“the transfer”) all of his right, title and interest in the real property situate at and known as Property E, being the whole of the land more particularly described in Certificate of Title Volume [omitted] (“the real property);
The wife indemnify the husband against all payments and liability pursuant to the mortgages registered No. [W] and [M] to ANZ Banking Ltd (“the mortgage”) and do all things necessary to refinance the real property so as to remove the husband from the mortgages as well as indemnify the husband against all apportionable rates, taxes and outgoings of or with respect to the real property of whatsoever nature and kind.
Pending the transfer:
(a)the wife have the sole right to occupy the real property and during such right of occupation the wife pay all instalments pursuant to the mortgage and all rates and taxes and like apportionable outgoings of the real property as they fall due;
(b)the parties hold their respective interests in the real property upon trust pursuant to these orders; and
(c)neither party encumber the real property without the consent in writing of the other party.
The wife forthwith do all necessary acts and things and sign all necessary documents to transfer to the husband at the expense of the husband all her right, title and interest in the BHP shares in her name and the Blue Steel shares in the parties’ joint names.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) owned by or in the possession of such party as at the date of these orders (the furniture, personal possessions, and like chattels in the property being deemed to be in the possession of the wife);
(b)insurance policies remain the sole property of the owner named thereon;
(c)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(d)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
IT IS NOTED that publication of this judgment under the pseudonym Eades & Eades is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 3407 of 2008
| MS EADES |
Applicant
And
| MR EADES |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties initially sought orders in relation to both parenting and financial matters.
When the matter came before the court for final hearing, the parties advised the court that parenting issues had finalised by consent on the basis the parties have equal shared parental responsibility for their three children [X] born [in] 1993 (“[X]”), [Y] born [in] 1997 (“[Y]”) and [Z] born [in] 1999 (“[Z]”), that [X], [Y] and [Z] live with the wife, that [Z] spend time with the husband each alternate weekend from after school Friday to before school Monday and each alternate Wednesday overnight, half holidays and other special occasions and that [X] and [Y] spend time with the husband subject to their wishes.
It is common ground that [X] and [Y] have not spent time with the husband since September 2008 and are unlikely to do so in the short to medium term future.
In relation to property matters, the wife seeks orders that the husband transfer the former matrimonial home to her, that she retain her superannuation entitlements and motor vehicle, and that the husband retain all remaining assets, being the parties’ shares and superannuation entitlements.
The husband is seeking property orders whereby the wife and children remain in the former matrimonial home until [Z] attains the age of 18 years or finishes secondary school, that he pay the mortgage, rates and health insurance during this time and that the parties’ shares be sold and utilised to reduce the mortgage, save for $10,000.00 which is to be retained in an offset account to be utilised to offset any costs incurred by the wife in the event the husband defaults in paying the mortgage. Otherwise the husband seeks that there be a superannuation splitting order so that the parties’ superannuation is divided equally between them. The husband proposed that when [Z] finishes school, the former matrimonial home be sold and the proceeds divided equally between himself and the wife.
Background
The wife was born [in] 1963 and is 46 years of age. She is employed in two part-time positions as a [occupation omitted]. She earns $35,000.00 per annum.
The wife was diagnosed in 2005 with Bipolar Affective Disorder Type II, which is managed through medication and regular interaction with her treating psychiatrist, Dr S.
The husband was born [in] 1961 and is 48 years of age. He is employed [in the Sales Industry] and earns a base salary of $123,000.00 per annum, plus an annual bonus as well as provision of a motor vehicle and phone expenses.
The parties commenced cohabitation in April 1986, married [in] 1990, separated under the one roof in March 2008 and the husband vacated the former matrimonial home on 9 August 2008.
On 5 May 2008, Carter J made orders which provided inter alia for the husband to pay all the private health insurance, chemist, hospital, medical, orthodontic/dental costs, optical costs and psychiatric expenses for the wife and children, together with the mortgage payments, rates, taxes, insurances, gas, electricity, water and telephone accounts in respect to the former matrimonial home.
On 7 July 2008, Young J made orders which provided inter alia for the husband to vacate the former matrimonial home by 9 August 2008 and for the husband to otherwise keep making the payments as ordered by Carter J on 5 May 2008.
[X] has a number of developmental problems which require long-term management. She is vision impaired. She has low muscle tone and poor coordination which makes her accident prone. She attends [O] School which is a private school for children with identified learning difficulties.
[Y] has been diagnosed with a depressive illness with severe mood disregulation and presents with some of the diagnostic criteria for childhood bipolar disorder. He takes medication and regularly attends his psychiatrist, Dr F. [Y] attends [R] Primary School. He is very involved in basketball and has recently been selected to join the [omitted] under 14 squad.
[Z] is fit and in good health.
At the commencement of cohabitation, it was the wife’s evidence she had a car and a small amount of savings, and the husband had some shares and $15,000.00 of savings.
It was the husband’s evidence that at the commencement of cohabitation, he had $30,000.00 of savings and that when the parties purchased their first home (which was a property in Brisbane), they utilised these savings and a gift from his parents towards the purchase. This property was sold and a second property was purchased in Brisbane. This second property was subsequently sold and the proceeds of same, together with a draw down on the husband’s superannuation of $60,000.00, was used to purchase the former matrimonial home at Property E.
In 1998, the parties purchased an investment property in Brisbane. It was sold in 2003 and the net sale proceeds were used to reduce the mortgage on the former matrimonial home.
The husband owned BHP shares at the commencement of cohabitation which are now 1312 BHP Billiton shares. As a result of holding BHP shares, the husband received 262 Blue Scope Steel shares in 2002.
The wife also has BHP shares in her name and the parties have One Steel shares in their joint names.
The wife has a Kia Carnival motor vehicle. The parties agree that the wife’s mother lent her $10,000.00 to assist in the purchase of this motor vehicle.
The wife’s proposal
As set out earlier in this judgment, the wife is seeking that the former matrimonial home be transferred to her, that she indemnify the husband in relation to the mortgage, that she retain her superannuation and motor vehicle, and that the husband retain all shares as well as his superannuation.
It was the wife’s evidence that this constitutes an approximate 65:35 division of the jointly owned assets between the parties, and that such an outcome would be just and equitable based on the considerations of section 79 of the Family Law Act 1975 (“the Act”).
In relation to the husband’s proposal that she and the children continue to remain in the matrimonial home for the next nine years and he be responsible for the payment of the mortgage and other outgoings in relation to the property, it was the wife’s evidence that to be required to be continually financially enmeshed with the husband for such a lengthy period would have a serious deleterious impact on her mental health.
It was the wife’s evidence that the husband’s ongoing anger and bitterness towards her caused her enormous stress and that in turn exacerbated and worsened her mental health issues. In response to the husband’s proposal that there be funds placed in an offset account to meet any costs that she might incur in the event that he failed to meet mortgage or other commitments pursuant to orders made by the court, it was the wife’s evidence that that would not provide her with any comfort. She indicated that the emotional and psychological impact of having to be involved in further litigation would further exacerbate her mental health difficulties.
It was the wife’s evidence that since separation the husband had met all mortgage payments in relation to the former matrimonial home, but that she had paid many of the rates, insurance and other utility expenses as she was sometimes loathe to ask the husband to pay them, particularly as there had been circumstances when she had forwarded them to him and he had made late payments which meant that they had both in fact ended up paying the same account.
It was her evidence that she sought orders that would finalise the entirety of the financial relationship as between the two of them so that she was not dependent upon him in any way for her financial security into the future.
The wife was cross-examined at length in relation to her capacity to be able to service the existing mortgage and meet her current living expenses. In her financial statement sworn 8 October 2009 and filed on 9 October 2009, the wife deposed to an average weekly income of $903.00 and to a total weekly expenditure of $1,793.00. She conceded in cross-examination that this amount did not include the mortgage payments currently being met by the husband or such other expenses as being currently met by him.
The wife’s evidence in cross-examination was that she did not have a capacity to borrow money from her family, though conceded that she had done so in the past to assist her in making ends meet.
The wife conceded that at this time she was not in a position to increase her income from her personal earnings because of the limitations placed on her working capacity by her mental health issues. She was still of the opinion however, that she would be able to manage, particularly as the husband would be paying her child support rather than mortgage or other expenses. The wife was also of the view that if in the event it did become impossible for her to continue to service the mortgage, that having to sell the matrimonial home and downsize would have a lesser impact on her, her mental health and on the children than having to continue to be financially dependent upon the husband over the next nine years.
The husband’s proposal
The husband’s proposal is set out in paragraph 5 of this judgment and I do not intend to repeat it here.
It was the husband’s evidence that because of the difficulties and special needs of [X] and [Y] in particular, he believes that the best property resolution for his family would be to enable the children to have the certainty of being able to remain in the former matrimonial home until [Z] completes her schooling in nine years time.
The husband was of the view that the wife would not be able to afford to service the mortgage and meet her daily living expenses and those of the children, and that a forced sale and relocation would have a serious impact on the children, particularly [Y], whose mental health issues are such that he is best served by stability and security.
It was the husband’s evidence that the only interaction that he now has with the wife is when there is changeover in relation to [Z], and that such changeovers now occur without incident. He quite rightly pointed out that these interactions would continue whether the wife remained in the former matrimonial home or not.
It was the husband’s evidence that he has consistently met all his obligations under the orders of Carter J made on 5 May 2008, and if there were any payments or expenses not met by him, it was because the wife had not provided him with the copy of account or relevant information to enable him to make those payments.
It was his evidence that he has been in his current position since 1995, and it was his expectation that he would continue in such employment well into the future. In those circumstances, it was the husband’s evidence that there was no issue that he would continue to meet all the mortgage, rate and insurance payments in relation to the former matrimonial home in accordance with his proposal.
The parties’ marriage broke down as a result of the wife having an extra-marital affair, which the husband discovered by finding an explicit text message sent by the wife, and by him discovering her in bed with another man.
It was apparent from the husband’s evidence that he remained deeply hurt by the breakdown of his marriage in these circumstances. When describing his wife, he used very strong words such as “immoral”, “deceitful” and that she “was the cause of the break-up of his family”.
When children’s matters were still live before the court, the parties and the children attended upon Mr P. In a report filed by him dated 19 February 2009, which was placed before the court by way of affidavit sworn on 7 October 2009, Mr P reported the following:
“Mr Eades remains palpably angry, blaming and accusatory of his wife.”
He describes Mr Eades as being “consumed by his anger of Ms Eades” and notes that he continuously blames Ms Eades unequivocally for all of the problems in relation to the breakdown of his relationship with [X] and [Y].
In cross-examination, Mr Eades denied still being angry with the wife, however his tone and demeanour in the witness box belied that claim and it was very apparent that he held her in complete disdain. The husband clearly stated that he did not trust the wife and that he had no respect for her at all. He laid the blame for the break-up of his family on her infidelity and was of the view that she was responsible for his alienation from his children, [X] and [Y]. He stated that he still has concerns about what it is she was telling the children about him. In short, he indicated that he did not trust Ms Eades at all.
When questioned as to the evidence given by Ms Eades and her treating psychiatrist as to the negative impact upon her of having to continue to be financially entangled with him in the event that orders were made in the terms being proposed by him, it was the husband’s evidence that he did not accept that it would have such an impact upon her and he was of the view that she would be able to manage as she has done to date.
When cross-examined as to her current working capacity, it was the husband’s evidence that whilst her psychiatrist may be of the view that the wife cannot work full-time, he did not necessarily accept that and believes that she does have a greater earning capacity.
In relation to the breakdown of his relationship with his two elder children, as noted earlier, the husband is of the belief that the wife has actively alienated the children from him, and that she continues to do so.
By contrast, in the report referred to earlier of Mr P, he noted that the elder children’s alienation from their father has become consolidated and that this is because of his (Mr Eades’) refusal to respect their wishes and because of his continued pursuit of them. In relation to Mr Eades’ claim that it is Ms Eades who is fuelling the alienation, Mr P reported:
“Both [X] and [Y] made it unequivocally clear to me that their mother’s continuous pursuit and harassment of them to see their father is compromising their relationship with her significantly.”
Further in his report, he states:
“I think she is absolutely genuine in her intent to support and encourage the children to have a relationship with their father, and that she has stoically endured a barrage of personal attacks from Mr Eades in response to her attempts to assist him. Mr Eades cannot conceptualise of seeking support from someone whom he despises with such intensity. The reality is that she has tried to support the intervention, that she has tried to be polite, and even businesslike in her dealings with Mr Eades, and has tried to support his efforts with each of the children.”
Mr P recommended that Mr Eades seek some personal psychological intervention to assist him with the level of his anger and to offer him guidance in relation to repairing his relationship with his children. During his evidence given at the final hearing of this matter, Mr Eades confirmed that he had not undertaken such counselling and did not believe that it was something that he would benefit from.
Dr S
Dr S is a consultant psychiatrist who has been treating the wife since December 2005.
Dr S swore and filed an affidavit on 13 October 2009, to which he attached his report of 11 September 2009.
In his report, Dr S described Ms Eades’ circumstances as follows:
“The main presenting symptom over the last twelve months has been extreme tiredness/exhaustion. This is related to a number of factors. Firstly her sleep is broken at times, mostly by having to deal with the numerous stresses in her life including the wash up of the marital breakdown, the three part-time jobs that she is working, the ongoing attitude and behaviour of her ex-husband and the impact on her and her children of that, and health issues in her oldest two children [X] and [Y]. She has very little support, apart form her mother who assists her about once per week (though I should add that her mother is unwell herself, and has to spread herself around to help with Ms Eades’ younger sister who has cancer, and her older sister who has a blind child and lives in Queensland). She has the oldest two children all of the time, as they have no interest in spending time with their father. [Y] and [X] seem to have greater demands than children with no disability or health issues – basketball to help [Y] with his depression, and driving [X] all over Melbourne to visit her friends who are geographically far and wide from her specialised school setting. This situation results in Ms Eades having little or no time to relax herself. Of course working three part-time jobs is likely to be contributing to her tiredness directly. She has cut back her hours but is worried about how she will cope financially and wants to make sure that her newer job is flexible enough to allow her to manage the children before she can resign completely from the other job(s).”
Dr S gave evidence at the final hearing of this matter. The husband’s proposal was put to him and he was asked directly as to what impact he felt it would have on Ms Eades. It was Dr S’s evidence that it would be very distressing for Ms Eades to have to continuously engage with the husband on financial matters as she finds interaction with him very stressful.
Dr S was cross-examined in relation to the stressors in Ms Eades’ life and in particular the difficulties that having to care for [Y] and [X] place on her. It was posited by the husband’s Counsel that the stability and security of the husband’s proposal would be a positive for the children and whilst this was conceded by Dr S, he also indicated that such things could not be looked at in isolation and that if the payments weren’t made or if there had to be considerable ongoing contact with the husband over financial matters, and in particular if the matter had to return to court, then this would be extremely distressing for the wife and therefore could have a negative impact on the children.
Dr S was asked if he had views as to the impact on the children if there was a forced sale of the former matrimonial home because the wife couldn’t meet her commitments with respect to the mortgage repayments. He was of the view that, if handled positively, then the children would manage it well.
In summary, Dr S was of the view that the less contact that the wife had to have with the husband, the better that would be for her mental health.
The legislation
Section 79 of the Act defines the Court’s powers in determining applications for property settlement. Sub-section 79(2) of the Act provides that:
The Court shall not make an Order under this Section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.
Section 79(4) of the Act sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters are:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The four-step approach
In Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 at [39], the Full Court of the Family Court described the preferred four-step approach in property matters as follows:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), ("the other factors") including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case ….
Section 81 of the Act states as follows:
Duty of court to end financial relations
In proceedings under this Part, other than proceedings under section 78 or proceedings with respect to maintenance payable during the subsistence of a marriage, the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.
Assets and liabilities
There was no issue between the parties as to what constituted the matrimonial asset pool. It is comprised of the following:
Former matrimonial home situate at Property E, with a value of $800,000.00, less mortgage of $156,160.00, leaving net equity of $643,840.00 $643,840.00 BHP Billiton shares $50,170.00 Scope shares $848.00 BHP shares $5,205.00 One Steel shares $550.00 Kia motor vehicle, with a value of $11,000.00, less debt to wife’s mother of $10,000.00, leaving equity of $1,000.00 $1,000.00 Husband’s superannuation $276,000.00 Wife’s superannuation $40,476.00 Total $1,018,089.00
Contributions
There is evidence that at the commencement of cohabitation the husband had slightly greater assets than those of the wife, and that those assets went towards the purchase of the first jointly owned property of the parties some 23 and a half years ago. Since that time, the parties have bought and sold several properties, both have engaged in paid employment and have brought up their children. It is common ground that the primary caretaker role for the children fell to the wife and in circumstances where two of the three children had special needs arising from their physical and mental health issues.
It was argued on behalf of the wife that in all these circumstances, the parties cohabitation contributions could be seen as equal. This is a submission with which I am in agreement.
Since the parties separated in 2008, the husband and the two elder children, [X] and [Y], have become estranged. This has had the practical effect of their care falling solely to the wife. As set out earlier in this judgment, both [X] and [Y] have quite severe health issues and the full responsibility and burden of the management of those issues now rests with the wife and will do so into the future.
It was therefore argued on behalf of the wife that her post-separation contribution now and into the future is greatly in excess of that of the husband.
There is no doubt that since the orders of Carter J in May 2008, the husband has made considerable financial contribution to the support of the wife and the children, and that contribution is acknowledged.
However, I am satisfied that the ongoing responsibilities of the wife in relation to the care of [X] and [Y], which realistically will continue way beyond them attaining the age of eighteen years, is such that there should be a loading in her favour of somewhere between five to ten per cent to reflect that ongoing greater contribution.
Section 75(2) factors
The husband is 48 years of age and is in good health. He has secure employment [in the Sales Industry] and his total salary package exceeds $150,000.00 per annum.
The wife is 46 years of age and suffers from Bipolar Affective Disorder Type II. It is the evidence of her treating psychiatrist, which I accept, that the impact upon the wife of her mental illness is such that it impacts on her earning capacity now and into the foreseeable future.
The parties’ youngest child, [Z], is in good health, is in her mother’s primary care and spends substantial and significant time with her father.
As set out previously in this judgment, the parties’ eldest children, [X] and [Y], both have serious ongoing health issues. Neither child currently has a relationship with their father and are unlikely to do so in the short to medium term, particularly in circumstances where the husband has been resistant to embracing the interventions suggested to him to assist in the repair of that relationship.
The practical effect of this is that the primary care of [X] and [Y] falls solely on the wife and will do so for many years to come, even after they achieve adulthood.
It was the wife’s evidence that [Y] is heavily involved in basketball and that involves her having to take him to games and training anywhere up to three or four times a week. [X] attends a special school in [suburb omitted], and I accept that in addition to meeting all her medical needs, the wife also drives her all around Melbourne to visit her friends to enable her to maintain her social network.
Whilst the husband will pay a high level of child support to the wife, this of itself does not lessen the greater burden that the wife shoulders in having the sole care of [X] and [Y] and the primary care of [Z]. In Clauson and Clauson (1995) FLC 92-595, the Full Court at page 81-911 said:
“In addition, it should not be forgotten that the payment of child support in no way compensates the custodial parent for the loss of career opportunity, lack of employment mobility and the restriction on an independent lifestyle which the obligation to care for children usually entails.”
Having considered all these factors, I am of the view that there should be an adjustment in the wife’s favour of between ten to fifteen per cent of the asset pool.
Section 81
When the Family Law Act 1975 first came into being, the impact of section 81 was considered by the Full Court. The Full Court held in Apathy and Apathy (1977) FLC 90-250 at page 76-350 that section 81 is not in itself a head of power.
In Dench and Dench (1978) FLC 90-469, the Full Court held that section 81 does not override the court’s obligations under section 72, 75 or 79 of the Act. Their Honours Evatt CJ and Watson SJ held as follows:
“Section 81… does not override sec. 72, 75 or 79 and it does not come into play unless the Court has determined that it would be just and equitable to make a property order under sec. 79…At that stage, sec. 81 may have a bearing upon the form of the order… It directs the Court to consider whether there is any practical means of achieving finality, such as… (the) distribution of property.”
In Woolley and Woolley (No 2) (1981) FLC 91-011, Nygh J held at
76-136:
“Section 81 of the Act is a strong indication that I should not make orders which would only have as a consequence that the parties continued to clash with one another in financial matters.”
I invited Counsel for the husband to address me on the conflict that I perceived existed between the husband’s proposal and section 81, in that the practical effect of orders sought in the terms by the husband are such that there would not be a finalisation of the “financial relations” between the parties for at least nine years.
Counsel for the husband submitted that the orders proposed by the husband were final orders and as such did finalise the financial relations between the parties in accordance with the requirements of the legislation.
Whilst technically the husband’s Counsel is correct, I do not accept this narrow interpretation of section 81 of the Act. To use the words of Nygh J in Woolley, the husband’s proposal is one which would have the consequence of the parties continuing to “clash with one another in financial matters”. Whilst there is an end date to this potential clash in some nine years time, I do not accept that this accords with the positive obligation on the court to made orders that will “finally” determine a financial relationship between the parties. I am of the view that orders that will continue to enmesh the parties financially for another nine years and which must leave the door open for further litigation if there is non-compliance with the orders cannot be seen to “finally” determine the parties’ financial relationship.
Just and equitable
There were no submissions put on behalf of the husband as to what would be a just and equitable division of the parties’ assets. in the event that his proposal did not find favour with the court.
The matter proceeded on the basis that the court was to make orders in the matter either in the terms proposed by the wife or in the terms proposed by the husband.
There is no doubt that section 79 of the Act empowers the court to make such order as it considers appropriate and does not bind the court to accede to the outcomes being proposed by either of the parties.
However, in this matter, I am of the opinion that it would be a just and equitable outcome for the parties for orders to be made within the constraints of the parties’ proposals per se.
Having satisfied myself that it is appropriate that an order be made for an adjustment of property between the parties pursuant to section 79 of the Act, I am satisfied that section 81 of the Act does require that I strongly consider each of the parties’ proposals within the constraints of the necessity to, where possible, finalise financial relations between the parties.
As set out previously in this judgment, I do not believe that the husband’s proposal is one that accords that finality as between the parties. His proposal requires that the parties continue to be financially entangled for another nine years, with the possible risk of the necessity of further litigation in circumstances that the husband either fails or is unable to meet his obligations to make mortgage and other payments in relation to the former matrimonial home in the intervening nine years.
I also have real concerns that, in the circumstances of the ongoing health issues for [X] and [Y] in particular, the proposed equal division of the net proceeds of sale at the end of this period, or at any time earlier because of non-payment by the husband, is not just and equitable.
I am also very concerned that there is a significant negative impact upon the wife if she were to be required to continue to be financially entangled with the husband. I accept completely her evidence and that of her treating psychiatrist that this will have an ongoing negative impact on her mental health, and should be avoided if at all possible.
Whilst there is some possibility that the wife may not be able to continue to afford to remain in the matrimonial home in the medium term, I am satisfied from her evidence that she is a resourceful woman who will manage her affairs and those of her children in a sensible, competent and appropriate way. If at some time in the future she makes the decision that it is economically more viable for her to sell the matrimonial home and downsize, then that is a decision that she should be entitled to make.
The proposal of the wife that she retain the matrimonial home, her motor vehicle and her superannuation entitlements would mean that she is to retain some 67 per cent of the existing matrimonial pool as identified in paragraph 58 of this judgment.
As set out earlier in this judgment, I have founds that there should be an adjustment in the wife’s favour of somewhere in the region of five to ten percent for her post separation contributions, and ten to fifteen per cent in relation to her 75(2) factors. In those circumstances, an adjustment whereby she receives 67 per cent of the property pool is one that I find to be just and equitable in all the circumstances.
Accordingly, I intend to make orders that reflect the proposals that have been made by the wife.
I certify that the preceding ninety (90) paragraphs are a true copy of the reasons for judgment of Bender FM
Associate: Sarah Hession
Date: 20 November 2009
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