EDMONDS & EDMONDS

[2015] FCCA 108

FEDERAL CIRCUIT COURT OF AUSTRALIA

EDMONDS & EDMONDS [2015] FCCA 108

Catchwords:
FAMILY LAW – Property orders – period of cohabitation of approximately seven years – no children of the relationship – assessment of respective contributions – social security payments in the United States of America – joint taxation liability of the parties in the United States of America – consideration of s.75(2) of the Family Law Act 1975 (Cth) matters.

Legislation:

Family Law Act 1975 (Cth), s.75(2)

Applicant: MS EDMONDS

Respondent: MR EDMONDS

File Number: MLC 9984 of 2011

Judgment of: Judge Hartnett

Hearing dates: 11 April 2014 and 16 September 2014

Delivered at: Melbourne

Delivered on: 30 January 2015

REPRESENTATION

Counsel for the Applicant: Mr Grant

Solicitors for the Applicant: Portelli & Co

Counsel for the Respondent: Dr Ingelby

Solicitors for the Respondent: Pearsons Lawyers Pty Ltd

ORDERS

1. The proceeds of sale of the former matrimonial home situate at Property O in the State of Victoria (‘the former matrimonial home’), together with interest accrued, be applied as to 50 per cent to each of the husband and wife.

2. The husband retain the (omitted) motor vehicles.

3. 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 other property (including choses-on-action) in the possession of such party as at the date of these Orders;

   (b)each party forego any claim they have to any superannuation benefits or pension funds owned or belonging to or earned by the other;

   (c)insurance policies remain the sole property of the beneficiary named therein;

   (d)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled to pursuant to the orders; and

   (e)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 Edmonds & Edmonds is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 9984 of 2011

MS EDMONDS

Applicant

And

MR EDMONDS

Respondent

REASONS FOR JUDGMENT

History

1. These are proceedings wherein property orders are sought by each of the parties. The proceedings were protracted as a result of discovery issues and alleged failures (by each) to comply with orders of the Court.

2. The wife was born in (omitted) on (omitted) 1954 and is now aged 60 years. The husband was born in (omitted) in (omitted) on (omitted) 1950 and is now aged 64 years. The wife is employed as a (occupation omitted) at (employer omitted) and is in receipt of income of approximately $48,880 gross per annum. The husband was employed as a (occupation omitted) in (employer omitted), in receipt of income of approximately $56,000 gross per annum. At trial he was unemployed (since July 2014) and living off savings. He had earlier (July 2011) cashed in his superannuation entitlements, receiving the sum of $7,800.  He also lived off these funds whilst unemployed.

3. The parties were married on (omitted) 2003 in Australia and separated on 20 February 2011 whilst residing in Australia. They were divorced on 12 July 2012. Their period of cohabitation was of approximately seven years and four months. There were no children of their relationship. Both parties have adult and financially independent children of previous relationships.

4. Statements of fact in these Reasons are findings of fact on the balance of probabilities.

5. The wife relied upon the following documents at trial:-

   a)Initiating Application filed on 9 November 2011;

   b)Financial Statement filed on 7 March 2013;

   c)Financial Statement filed on 6 August 2013;

   d)Affidavit sworn by the wife on 27 January 2012;

   e)Affidavit sworn by the wife on 1 May 2012;

   f)Affidavit sworn by the wife on 26 July 2012;

   g)Affidavit sworn by the wife on 20 February 2013;

   h)Affidavit sworn by the wife on 7 March 2013; and

   i)Outline of Case filed on 19 March 2013.

6. The orders sought by the wife were as follows:-

   a)that the proceeds of sale of the former matrimonial home situate at Property O in the State of Victoria (‘the former matrimonial home’), together with interest accrued, be applied as to 60 per cent to the wife and 40 per cent to the husband provided that from the husband’s share there be deducted and paid to the wife the amount of $10,797.22 being one half of repairs and restoration to the former matrimonial home after the husband’s deliberate damage to it; outstanding utility and other charges as at the date of separation; and ongoing expenses incurred by the wife in maintaining the property, servicing the mortgage loan, and servicing the credit card debt;

   b)that the husband retain the (omitted) motor vehicles;

   c)unless otherwise specified in the orders and save for the purposes of enforcing any monies due under these or any subsequent orders:-

   i)each party be solely entitled to the exclusion of the other, to all other property (including choses-on-action) in the possession of such party as at the date of the orders;

   ii)each party forego any claim they have to any superannuation benefits or pension funds owned or belonging to or earned by the other;

   iii)insurance policies remain the sole property of the beneficiary named therein;

   iv)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled to pursuant to the orders; and

   v)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.

7. The orders sought be the husband were as follows:-

   a)that the proceeds of sale of the former matrimonial home currently held in Pearsons Lawyers Pty Ltd Trust account be disbursed as to $100,000 to the wife and the balance to the husband or, as it was put at trial, two thirds to the husband and one third to the wife;

   b)that the husband retain for his sole and exclusive use, enjoyment and benefit all items of property in his name, possession and control;

   c)that the wife retain for her sole and exclusive use, enjoyment and benefit all items of property in her name, possession and/or control, excluding the items detailed hereunder;

   d)that within seven days the wife return to the husband in good condition and state of repair the following items:-

   i)(omitted) motor vehicle ownership documents, manufacture’s manual and engineering reports;

   ii)several spare mechanical parts for both the (omitted) vehicles;

   iii)six microwave receivers;

   iv)one craftsman analogue dwell and tach meter;

   v)two digital volt metres;

   vi)(omitted) celebrating (omitted);

   vii)two queen size mattresses;

   viii)box springs with steel frame; and

   ix)one (omitted) gas powered lawn mower.

8. The documents relied upon by the husband at trial were the:-

   a)Financial Statement filed on 16 July 2013;

   b)Affidavit affirmed by the husband on 7 March 2013;

   c)Affidavit affirmed by the husband on 12 April 2013;

   d)Affidavit affirmed by the husband on 16 July 2013; and

   e)Affidavit affirmed by the husband on 7 April 2014.

9. The parties agreed on an asset pool at trial as follows:-

a)   the net proceeds of sale of the former matrimonial home situate at Property O in the State of Victoria (‘the former matrimonial home’) (as at 31 July 2014). The Court notes further interest payments will have accumulated on that amount;

$300,861

b)   the husband’s two (omitted) motor vehicles;

Note: The husband’s evidence is that one (motor vehicle omitted) was stolen (in (omitted) 2014), and that it was uninsured. He nevertheless accepts it was in his possession and control and consents to its inclusion of value to him for the purposes of ascertaining an asset pool available for division between the parties. The Court notes the evidence that approximately $45,000 USD of the husband’s termination funds were applied to the restoration of his vehicles;

$26,500

c)   the wife’s (omitted) motor vehicle;

$2,500

d)   the wife’s jewellery. Note: This is an agreed valuation sum but there is no agreement between the parties as to its inclusion in the asset pool available for division, the wife claiming her jewellery comprises gifts given to her by the husband;

$6,305

e)   the wife’s superannuation with (omitted) Super Fund (accrued since separation);

$12,000 approximately

1. In addition to the above described asset pool, the husband claimed the wife has retained $10,000 in chattels. This is not agreed to by the wife nor is a valuation of any items placed before the Court. The wife seeks a payment from the husband of $10,797.22 being an amount which she alleges is one half of payments made by her post separation for the benefit of the parties. Upon the sale of the former matrimonial home, the sum of $45,000 approximately was paid out to discharge credit cards in the wife’s name. The wife’s evidence was that such debt did not relate to those expenses in the sum of $10,000 approximately that she now claims from the husband.

Contribution

1. The parties first met on the internet at a time when the husband was living in (omitted) in the United States of America and the wife in (omitted) in Australia. They met physically for the first time in (omitted) 2002 in (omitted). Thereafter, they visited each other and holidayed in (country omitted) at the expense of the husband. That trip cost $6,000. Their subsequent honeymoon (following their marriage) in (omitted) 2003, was also paid for by the husband in a sum of $7,500. This was a discounted amount with such discount being obtained through personal connections had by the wife.

2. At the time of their marriage in Australia in (omitted) 2003, each of the parties had assets as follows:-

   a)the husband:-

   i)a house property in (omitted) in the United States of America. The home was in the joint names of the parties but had been purchased by the husband in July 2003 with his sole funds. The husband had obtained $13,848 USD from his employer toward the costs, of which he sent $6,000 USD to the wife in Australia, and placed savings of his own of, on his evidence, variously between $18,000 USD and $25,000 USD toward the purchase and costs associated with same;

   ii)a (omitted) motor vehicle claimed to be valued at $65,000 USD by the husband, but which was purchased for $35,000 USD and entirely by way of loan. This vehicle the husband claimed, he gave to a friend in the United States of America, it’s value being approximately $3,500 AUD. The husband claimed it would cost more than its value to transport to Australia. The wife claimed its value at trial to be approximately $10,000. It had been entirely paid off during the marriage;

   iii)computer equipment, value not able to be determined on the evidence;

   iv)a private pension fund valued at approximately $190,000 USD - $40,000 USD contributory and $150,000 USD non-contributory;

   (- the exchange rate at the time was that $1 AUD equalled approximately $0.56 USD. The value of the husband’s pension fund asset was thus approximately $357,000 AUD);

   b)the wife:-

   i)a house property at Property A in the State of Victoria with an equity of approximately $110,000 to $120,000;

   ii)a motor vehicle sold in the following year for $6,000;

   iii)savings alleged to be $9,168; and

   iv)superannuation alleged to be $20,000. The wife cashed in her superannuation entitlement in March 2009 and received $11,910.42. These funds were applied to the parties’ living expenses;

   c)each of the parties had chattels of nominal value. The husband was in receipt of income of approximately $189,000 AUD, together with an annual bonus of 12 per cent of salary. The wife had an average wage income in (omitted), but terminated her employment to reside with the husband in (omitted) (the husband worked as an (occupation omitted) and the wife was fully supported from the husband’s income whilst in the United States of America). The wife’s children resided in the wife’s home during the parties’ residence in the United States of America between early 2004 and 2008. The parties made some small contribution to the household and housing expenses during that period of residence to the wife’s children.

3. During the marriage and up until (omitted) 2008, the husband was employed by (employer omitted) in the United States of America. Upon the cessation of his employment he received substantial sums of money. These monies included deposits into the wife’s bank account of $52,644 USD in June 2008, $12,344.89 USD in May 2008, $123,645.26 USD in June 2008, and $92,802 USD in June 2008. A total of $281,435 USD. Further amounts of $30,000 USD and $65,000 USD were transferred into a joint account. The husband further discharged debts in the sum of $93,289 USD loaned to the parties from (employer omitted). These borrowings supported the parties and their lifestyles and the carrying out of minor maintenance and improvements tasks to the wife’s home in Property A in 2007 to repair and maintain the home, replace lighting, and provide air conditioning. Such borrowings were set off against the husband’s superannuation entitlements. In addition, the husband received, following the cessation of his employment, the sum of $2,000 USD a fortnight in income payments from his former employer to a total sum of $60,000 USD. The husband’s monies were applied, in part, to the purchase of the former matrimonial home in the joint names of the parties and in mid-2008. The purchase price of the home was approximately $340,000 (possibly slightly more) including purchasing costs. I prefer the evidence of the husband in this regard (the wife had claimed an amount of $330,000). The wife applied a total sum of approximately $191,000 being the proceeds of sale of her home in Property A, and the husband supplied the balance of the costs of purchase ($149,000 approximately to $154,000 approximately) from his employment monies. The former matrimonial home was subsequently encumbered by way of mortgage to the (omitted) Bank in the sum of $60,000 not long after its purchase. Stamp duty, electrical equipment and parts for the husband’s motor vehicle were funded in this way. The husband’s money, most of which had been transferred into bank accounts in the wife’s name and/or in joint names had been expended. The parties had been required to apply significant funds (approximately $85,000 USD) to the move from the United States of America to Australia and otherwise (save for the husband’s car restorations) spent their monies in a way that remains fairly unaccounted for.

4. Earlier Orders were made in these proceedings and during the first day of hearing for the wife to hand over to the husband various items which had been retained by her, and sought by the husband, for an extensive period of time. Those Orders made 11 April 2014 were relevantly as follows:-

   “1. Within seven days hereof the wife hand over to the husband the following:-

   a. the (omitted) motor vehicle manufacturer’s manual, engineering reports and any ownership documents she has currently in her possession;

   b. several spare mechanical parts for both the (omitted) vehicles; and

   c. the (omitted) gas power lawn mower.

   …”

   The above Orders took into account that the parties had agreed the husband would retain the (omitted) motor vehicles. The wife made some items available to the husband but not all. No ownership documents in respect of the (omitted) motor vehicles were made available. Not all the mechanical parts were made available. The wife claimed to not have these items. The lawn mower was made available but its cabling and handles were disconnected.

Section 75(2) of the Family Law Act 1975 (Cth) matters

1. The husband sought no s.75(2) of the Family Law Act 1975 (Cth) factors adjustment in the proceedings in either party’s favour. Although he has some ill health, it has not prevented him from being gainfully employed. The wife argued for a slight adjustment in her favour on the basis that the husband has an entitlement to a US pension. The husband has qualified to make application for social security payments in the United States of America of currently approximately $1,509 USD a month upon retirement. He has however made no such application, and his evidence is that he and the wife have a joint taxation liability in the United States of America which is a significant sum, and a sum which would eradicate any payment due to him. Additionally, although the wife was not in employment, she was a joint proprietor of the husband’s (omitted) real property which was sold leaving debt outstanding to creditors which remains to be satisfied by both parties. The Court cannot, without further evidence, be satisfied that the husband has any present entitlement in light of the debts owing by the husband and/or the parties. The wife’s evidence is that there is considerable debt. The wife, in any event, may have an entitlement to a pension in her old age in Australia. There shall be no adjustment in either party’s favour on a consideration of these matters. There is simply insufficient evidence. What was clear in the evidence was that despite the husband’s income in those years, the parties had outstanding debt and no significant assets in the United States of America, save the employment monies thereafter received by the husband.

Consideration

1. Throughout these proceedings, numerous grievances were aired by the parties about each other. Failure to make timely or at all discovery; failure to make or produce relevant documents; a failure by the husband to secure a sale of the former matrimonial home at a price of $20,000 more than that at which it was ultimately sold, but in circumstances where the higher price was pursuant to a conditional contract only; a failure by the wife to provide personal items and car parts to the husband; and the argument about chattels in relation to which no valuations were before the Court, and there is dispute about proper opportunity for collection by the husband before being taken to the tip on instruction from the wife, and missing items. None of these matters alter the ultimate distribution in either party’s favour.

2. The wife shall retain her jewellery, as personal property gifted to her of small value, and the husband shall not be liable for any post-separation expedition of the wife as claimed by her. Credit card expenses of the wife have been paid from joint funds. The wife’s evidence was that they did not relate to the further expenses she is claiming, but there was not sufficiently probative material before the Court for her to establish her claim save in those respects where no challenge was made by the husband. Importantly also in this consideration is the fact the wife had the benefit of occupation of the home for a period following separation.

3. Following the parties’ separation, the wife obtained an intervention order against the husband. The husband was charged with assault and pleaded guilty to pouring water over the wife. The wife alleges and the husband denies more serious assault. The assault charge was dealt with by way of diversion.  The wife claimed the husband extensively damaged the former matrimonial home. He denied this save removal of some item associated with the lighting. I find he did cause some damage but to an indeterminate extent. I take this into account in a global approach to the division of the property.

1. The orders which the Court makes this day give each of the parties respective direct financial contributions, their indirect contributions being fairly equal, acknowledgment in a way that marginally favours the husband. In the circumstances of this matter and on the evidence before the Court, I conclude the orders are just and equitable as between the parties.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of Judge Hartnett

Associate: 

Date:  30 January 2015