Elwood and Fisher
[2012] FMCAfam 415
•9 May 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ELWOOD & FISHER | [2012] FMCAfam 415 |
| FAMILY LAW – Property – de facto relationship – definition of de facto – length of the relationship – contributions – monetary rather than percentage-based adjustment. |
| Bankruptcy Act 1966 Fair Work Act 2009 Family Law Act 1975, ss.4AA, 75(2), 79, 90SF(3), 90SM Migration Act 1958 Social Security Act 1991 |
| Baker & Landon [2010] FMCAfam 280 Simonis v Perpetual Trustee Co. Limited (1987) DFC 95-052 |
| Applicant: | MS ELWOOD |
| Respondent: | MR FISHER |
| File Number: | MLC 6175 of 2011 |
| Judgment of: | Whelan FM |
| Hearing dates: | 8 and 14 February 2012 |
| Date of Last Submission: | 14 February 2012 |
| Delivered at: | Melbourne |
| Delivered on: | 9 May 2012 |
REPRESENTATION
| Counsel for the Applicant: | Ms Rosetta Stoikovska of Counsel |
| Solicitors for the Applicant: | Clancy & Triado |
| Counsel for the Respondent: | Mr Ackman, QC with Mr Atkinson of Counsel |
| Solicitors for the Respondent: | Scanlan Carroll |
ORDERS
That within 90 days of the date of these Orders the Husband pay to the Wife the sum of $600,000.00.
The Husband is to indemnify the Wife against any capital gains tax liability associated with the sale of shares, held in his name, to give effect to the payment as described in Order 1.
Unless otherwise specified in these Orders, and except for the purpose of enforcing the payment of any money due under these or any subsequent Orders:
(a)Each party is to be solely entitled to the exclusion of the other to all other property including chose-in-action in the possession of such party as at the date of these Orders;
(b)Money standing to the credit of the parties in any bank accounts are the property of the account holder named therein;
(c)Each party is to forego any claims they may have of on any superannuation benefits belonging to or earned by the other;
(d)Insurance policies remain the sole property of the policy owner named therein;
(e)Each party is to 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
(f)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 Elwood & Fisher is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 6175 of 2011
| MS ELWOOD |
Applicant
And
| MR FISHER |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for alteration of property interests under s.90SM of the Family Law Act 1975 (Cth) (“the Act”) brought by the de facto wife, MS ELWOOD, (“the Wife”) in the proceedings. The Wife seeks an alteration in the parties’ property interests which would give her an estimate of 30% of the assets of the relationship.
The de facto Husband, MR FISHER (“the Husband”), opposes the application and proposes that the Wife be awarded a sum of $250,000.00 in addition to the $40,000.00 Barro Order previously made in these proceedings.
The substantive issues in dispute in this matter are first, the length of the de facto relationship between the parties and second, the percentage or amount that should be awarded to the Wife based on her contribution but more specifically on the ss.90SF(3) factors otherwise referred to as s.75(2) factors in these proceedings.
The Applicant Wife
The Wife is now aged 66 years of age having been born [in] 1946. She is currently retired and is living in a small unit owned by her son, Mr E (“Mr E”). She says that she was acquainted with the Husband for some years, prior to the commencement of a relationship with him in 2001, both from working in the same industry for a period of time and also because of their mutual involvement in [omitted]. Early in 2001, at her request the Husband drove the Wife to Canberra for the two of them to attend [omitted]. They spent the weekend together in Canberra and it is not disputed that during that time they had sexual relations.
While they were at [omitted] in Canberra, they met a couple, who were mutual friends. The Wife states that the Husband declared at this meeting that the two of them were now together indicating, in her view, that he regarded them as a couple. The Husband stated that he could not recall exactly what he did say on that occasion but that he probably said that they were touring the [omitted] together.
The Wife says, and the Husband does not deny, that the relationship developed from there. She says that by March 2001, she was living for two or three nights per week at the Husband’s residence and by the middle of 2001 she was living there most weekends, being Friday, Saturday and Sunday nights and spending some mid-week nights in addition to spending most evenings with him having dinner. At the time that the relationship commenced, the Wife was living in a rental property in [P] with Mr E, and the Husband was residing in a retirement village in [W].
In September 2001, the Wife and Husband travelled to Canada together to meet the Husband’s brother who lives there and to spend some time on holidays in Canada. The Wife says by this stage the Husband was referring to her as his partner. He says that he cannot recall how he introduced her to his family in Canada but probably he referred to her as his friend.
In November or December 2001, the Husband purchased a property in [A] and the Wife and Mr E moved into that property. The Wife says that after moving into the premises at [A], she would drive home from work directly to the Village where she would share a meal with the Husband and sometimes afterwards stay the night or otherwise return to the property at [A]. She remained at the property at [A] during the week as it was more convenient for commuting to work. She also says she was unsure as to whether there were living restrictions associated with the unit at the Village.
The Wife says she also performed domestic duties while residing with the Husband at the Village, performing basic chores such as washing dishes, ironing the Husband’s clothes, cleaning the kitchen and bathroom, although she also indicated that the Husband hired a cleaner who did the heavier work.
The Wife says that she was also involved hosting family functions and other social events at the Husband’s residence including Christmas 2001, which was spent with her son and daughter and the Husband and also a function for the Husband’s 80th birthday [date omitted] 2002 where a large number of his friends and family attended. Her children and their partners also attended.
The Wife says that the purchase of the unit at [A] was at the instigation of the Husband who wished her to be living closer to him. From the time she commenced living with her son at [A] until approximately May 2003, the Wife paid a weekly sum to the Husband, she says as a contribution to the upkeep of the property and he says as rent.
In about the middle of 2003, on the Wife’s evidence, the Husband indicated that he no longer wished her to pay him any money by way of rent on the property at [A] and that in fact it was his desire that the two of them should find a property to live in together on a permanent basis. After considering other properties they eventually signed a contract to purchase off the plan a property in Property D, [D]. However the property was not completed until some time in 2006 when the two of them moved into the [D] property together on a full-time basis.
Essentially from the commencement of the relationship the Husband paid for all of the expenses, although the Wife, while she continued to work (she worked on a part-time basis until 2007) made small financial contributions, buying small household items and purchasing food.
Between 2001 and 2006, the Wife also received a partial Centrelink pension associated with a disability arising from her osteoarthritis. She agreed that she did not disclose to Centrelink that she was living, as far as she was concerned, in a de facto relationship. Her explanation for this was that she understood from Centrelink that they defined a de facto relationship as people living together on a 24/7 basis.
Apart from the trip to Canada in 2001, the Wife and the Husband also travelled overseas on a number of other occasions, including a trip to [omitted] in 2002 for the wedding of the Wife’s godson. On that trip they also visited Russia.
In 2002, as well, the Husband paid for some surgery that the Wife required but was unable to fund herself.
The Husband also developed a close relationship with Mr E, who spent time with both of the parties at the Husband’s retirement village, while he was otherwise living with his mother in [A].
The Husband paid, or contributed to the cost, of a 21st birthday party for Mr E in 2002 at [omitted]. He also paid for the Wife’s daughter’s wedding in January 2005. The Wife also had the benefit of the Husband paying out some of her debts in the early part of 2001 and he made a contribution of $4,000.00 towards her superannuation, which resulted in a Government co-contribution of $6,000.00 increasing her superannuation overall by at least $10,000.00.
In 2010, the Husband allowed the [D] property to be used as security for a loan to Mr E in order for him to purchase the property in which the Wife is currently residing.
At the Husband’s encouragement, the Wife left her employment in 2007. In or about 2009, she accessed her superannuation, which at that stage was approximately $23,000.00 and lent $15,000.00 of that to
Mr E. From the time of her retirement until the separation, the Husband paid the Wife the sum of $1,000.00 per month, from which she purchased personal items and also paid for her own private health insurance.
The Wife says throughout the relationship she attempted to foster the relationship between the Husband and his own children, which at the beginning of the relationship was quite distant. She often spent family events with the Husband, his children and her children during the life of the relationship. The Wife was also responsible for arranging and purchasing presents for the Husband to give to his son, grandchildren, daughter-in-law and other members of the family.
The Wife says that the Husband would frequently refer to her in public as his wife at least from 2003 on. The Wife also says she supported the Husband through health issues that he had during the life of the relationship, including an incidence of prostate cancer and shingles. The Wife also says she assisted him in administering medication and in other ways looking after his health.
The Wife’s own health has not been good. She has had several operations during the life of the relationship and was hospitalised on approximately four occasions. In 2007 she had a double knee replacement and a left shoulder replacement in January 2011. She says that she continues to suffer from regular migraines and needs specialist treatment.
It is not disputed that the parties separated on 27 June 2011 when the Wife moved out of the residence at [D], where the two of them had been living since 2006.
The respondent Husband
The Husband is 90 years of age, having been born [in] 1922. He has been retired since 1992 and has been able to live off investments and pension entitlements since retirement. The Husband does not deny that he commenced a relationship with the Wife in March 2001. He denies, however, that it was a de facto relationship until they commenced living in the property at [D] in 2006.
The Husband described the relationship between 2001 and February 2006 as based on companionship with benefits. He agreed that the Wife meant a lot to him emotionally and that she had formed with him a family-like unit. He also agreed that he developed a close relationship with Mr E, particularly after they had moved into the property in [A]. The Husband agreed that there was a mutual expectation that she would be his lifetime partner and she his. He agreed that he treated her as his companion for the rest of his life.
The Husband also agreed that the Wife had provided moral support to him when he was ill and, in particular, he referred to his diagnosis with prostate cancer in 2002. He agreed, that by 2003, there was a mutual agreement that they would jointly look for a particular premises that was satisfactory for both of them to live in together. He agreed that once they had made that decision, the timing of when the two of them moved in was really dependent on when they found a place they were able to occupy.
Other evidence
The only other evidence given in the proceedings was that of Mr E. He gave evidence of living with his mother in a unit at [P] prior to the time that they moved into the unit in [A], which had been purchased by the Husband. He indicated that the Husband had been very generous to himself and to his mother and treated him as his own son. He referred to him hosting his 21st birthday party at [omitted]. He described his relationship to the Husband as a close one. He stated that from 2001 onwards he regularly visited the Husband at his retirement village and would have dinner with the Husband and the Wife, at least once a fortnight, there.
He also indicated that the Husband would also visit the [A] property a couple of times per week. He also referred to celebrating Christmas, Easter and birthday functions with the Husband. He described his mother as being regularly away for three or four nights per week, usually on the weekend, plus random week nights and she would often tell him that she would be staying with the Husband at [W].
Mr E also gave evidence that he would also hear the Husband refer to his mother as his wife on occasions when making appointments or reservations and would also see mail addressed to ‘Mr and Mrs Fisher’.
Mr E gave evidence of the arrangements that were made between himself and the Husband when he purchased the unit in Property N, [N] in July 2010. He obtained a significant First Home Owners Grant and the Husband provided the rest of the finance for the purchase. He has since been making repayments to the Husband directly.
The period of the de facto relationship
The meaning of de facto is governed by s.4AA of the Family Law Act 1975 (Cth) (“the Act”) which provides:
1. A person is in a de facto relationship with another person if :
(a) the persons are not legally married to each other; and
(b) the persons are not related by family (see subsection (6)); and
(c) having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.
Paragraph (c) has effect subject to subsection (5).
Working out if persons have a relationship as a couple
2. Those circumstances may include any or all of the following:
(a) the duration of the relationship;
(b) the nature and extent of their common residence;
(c) whether a sexual relationship exists;
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e) the ownership, use and acquisition of their property;
(f) the degree of mutual commitment to a shared life;
(g) whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h) the care and support of children;
(i) the reputation and public aspects of the relationship.
3. No particular finding in relation to any circumstance is to be regarded as necessary in deciding whether the persons have a de facto relationship.
4. A court determining whether a de facto relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.
5. For the purposes of this Act:
(a) a de facto relationship can exist between 2 persons of different sexes and between 2 persons of the same sex; and
(b) a de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship.
The requirements of s.4AA of the Act require a decision as to whether the parties have a relationship as a couple living together on a genuine domestic basis. In coming to that decision the Court must have regard to all of the circumstances of the relationship and importantly no finding as to any particular aspect of the relationship appears to be determinative, nor does the section prescribe the particular weight to be attached to any particular factor.
The meaning of the term as expressed in s.4AA has been discussed extensively by Riethmuller FM in Baker & Landon[1] and also by Mushin J in Moby & Schulter.[2] Riethmuller FM, in particular, gave consideration as to the way the term had been dealt with in state legislation and also in other federal legislation, such as the Fair Work Act 2009 (Cth), Bankruptcy Act 1966 (Cth), the Migration Act 1958 (Cth) and the Social Security Act 1991 (Cth). He pointed out at paragraph 22 that:
[I]t is likely that there will be differences in the relationships covered by the term ‘de facto’ as it appears in various enactments, as a result not only of differences in wording, but the different purposes of the statutory schemes. It may well be that a person is in a relationship sufficient to satisfy s.4AA of the Family Law Act, yet not satisfy the relevant provision of the Social Security Act 1991.[3]
[1] Baker & Landon [2010] FMCAfam 280.
[2] Moby & Schulter [2010] FamCA 748.
[3] Baker & Landon [2010] FMCAfam 280.
Mushin J, after referring to the decision of Powell J in Roy v Sturgeon[4] and Kearney J in Simonis v Perpetual Trustee Co. Limited,[5] agreed that it was not helpful to attempt to dissect the phrase living together as husband and wife on a bona fide domestic basis or living together as a couple on a bona fide domestic basis and that the expression should be considered as a single composite expression of a comprehensive notice, notion or concept. Mushin J, however, did consider that there were two specific elements of the definition which required individual consideration. The first of those was the concept of a couple. For the purposes of the definition, a couple is constituted of two persons whether they are of the same or opposite sex.
[4] Roy v Sturgeon (1986) DFC 95-031.
[5] Simonis v Perpetual Trustee Co. Limited (1987) DFC 95-052.
The second specific element is the concept of ‘living together’ and with respect to that his Honour said:
In my view, if a couple do not live together at any time, they cannot be seen as being in a de facto relationship. However, the concept of “living together” does not import any concept of proportion of time. In particular, it does not require that a couple live together on a full-time basis. On the basis that one or both members of the couple may also be legally married or in another de facto relationship at the same time as they are in the subject relationship, it must follow that it is feasible that the subject relationship might involve the parties living together for no more than half of the time of that relationship. Further, there is nothing to suggest that it must be even as much as half of the time.
Subject to the above, the question of whether the parties were in a de facto relationship must be considered on a case-by-case basis without circumscribing any particular factor.[6]
[6] Moby & Schulter [2010] FamCA 748 at paragraphs 140 – 141.
I now turn to those factors. The first of these is the duration of the relationship. Clearly the parties were in some form of relationship from early in 2001 until the middle of 2011. I accept that the relationship developed during the course of that time, although I also accept the Wife’s evidence that it developed fairly quickly and that by the end of 2001 it could be described as a relationship with commitment. The purchase of the unit at [A] and the agreement of the Wife to move into that unit, so that she would be closer to the Husband, is indicative to me that the relationship had become more than a casual one.
I further accept, that the Wife, while continuing to maintain a separate residence spent an extensive period of time with the Husband, at his residence at the Village and that at least one of the reasons why she did not move into the accommodation with him there was the size of the premises and some consideration as to whether there were particular regulations which might affect her capacity to reside there.
This leads me to ss.2(b) – the nature and extent of their common residence. Clearly from February 2006, the parties lived together on a “24/7 basis” as the Wife put it. I am satisfied, however, that after the end of 2001, when the Wife moved into the premises at [A], she was spending something like three or even four nights per week at the Husband’s residence engaging in domestic tasks there, preparing the meals there and hosting visitors there.
Sub-section 2(c) deals with whether there was a sexual relationship. Clearly, from the very beginning there was a sexual relationship between the parties. That is not denied by either.
Sub-section 2(d) deals with the financial dependence or financial interdependence in the arrangements for financial support made between them. It is clear from the very beginning the Husband provided significant financial support to the Wife. She was at the time and continued until some time in 2007 in part-time employment and also in receipt of a partial disability benefit. She therefore had some income of her own. It was obviously significantly less however than the income to which the Husband had access. It is clear that from very early on the Husband paid not only for the trips that the couple took, both within Australia and outside, but also paid for the social entertainment that they engaged in.
There is also evidence that the Husband paid some debts for the Wife and contributed to her medical expenses. Prior to the purchase of the [D] property, he also paid or contributed to the cost of her son’s 21st birthday and paid for her daughter’s wedding. The Husband also contributed to the Wife’s superannuation and after she ceased employment, paid her an allowance in the sum of $1,000.00 per month. From that time she was essentially entirely dependent upon him financially.
Sub-section 2(e) refers to the ownership, use and acquisition of property. All property during the period of the relationship was in the sole ownership of the Husband. The Wife had use of the premises at [A] and indeed from mid-2003 until the early part of 2006 she had the use of that property on a rent-free basis. The Wife also clearly had use of the [D] property from February 2006 until the time of the separation.
While the Husband was responsible in a financial sense for the acquisition of both the [A] property and the [D] property, the Wife certainly did contribute to the selection of the properties and was completely involved in the choice of the property to purchase and was also involved on the basis of the evidence in the decoration and the décor of those properties.
Sub-section 2(f) refers to the commitment to a mutual shared life. Both the Wife and the Husband gave evidence that they regarded themselves as being their partners for life. They socialised together, they spent time with family together and they supported each other’s family relationships. They also provided each other with mutual emotional support and companionship.
Sub-section 2(g) refers to whether the relationship is or was registered under a prescribed law of a state of territory as a prescribed kind of relationship. That is not applicable in this case.
Sub-section 2(h) refers to the care and support of children. In this case all of the children of both the Wife and the Husband were and are adults, however, it is clear that the parties were quite involved in the lives of each other’s children and that the Husband provided significant financial support to the Wife’s son and also, to a certain extent, to the Wife’s daughter.
The Wife for her part attempted to foster the relationship between the Husband and his own children which had become strained over the years and participated with him in family events and was responsible for gestures such as the selection of gifts for them on appropriate occasions.
Sub-section 2(i) refers to the reputation and public aspects of the relationship. Very little evidence was given in relation to this, apart from the evidence of the parties themselves and the evidence of the Wife’s son, Mr E. The Wife says that from very early on in the relationship, they regarded themselves and were regarded by others as a couple, although she says she first recalls the Husband referring to her as his Wife in 2003. On the limited evidence before me, I am satisfied that the Wife and Husband were regarded by others as a couple, probably from the end of 2001 or the beginning of 2002 at least.
Taking into account those factors and the relevant evidence I am satisfied that the parties were in a de facto relationship within the meaning of the Act, at least from the time the Husband purchased the unit at [A] for the Wife’s use and with his support and encouragement she moved into that unit.
I am satisfied that the parties would have cohabited on a 24/7 basis at an earlier time than they did, had there been suitable accommodation for them to do so, at least from the middle of 2003. Further, I do not consider the fact that the Wife continued to receive some financial support through Centrelink until the beginning of 2006, would disqualify her from claiming that she was in a de facto relationship with the Husband prior to that date.
The legislative provisions
There is no dispute in this matter that the parties were in a de facto relationship for a period of at least two years and that both of them were ordinarily resident in the State of Victoria during that time.
Matters which the Court is required to take into account under the provisions of s.90SM(4) of the Act in considering what order if any should be made in property settlement proceedings involving de facto parties are in essence the same as those that apply under s.79 of the Act. It is therefore appropriate to adopt the four-step approach set out in the matter of Hickey & Hickey and Attorney-General for the Commonwealth of Australia (Intervener)[7] which includes:
a)Identifying the property, liabilities and financial resources of the parties at the date of the hearing;
b)Identifying and assessing the contributions of the parties within the meaning of ss.90SM(4)(a), (b) and (c);
c)Identifying and assessing the relevant matters in ss.90SM(4)(d), (e), (f) and (g) and ss.90SF(3) in so far that is relevant; and
d)Considering the effects of those findings in order to resolve what order is just and equitable in all the circumstances of the case.
[7] Hickey & Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143.
The only issue that is in dispute in relation to the asset pool was how the issue of the loan to Mr E, should be treated. In other respects it was agreed that the asset pool consisted essentially of the Property D apartment at the [D] valued at $575,000.00 and various shares and investments held by the Husband coming to a total value of $2,938,898.00.
The Husband says that the amount of $198,500.00 should be deducted from the total asset pool representing the loan secured by a mortgage to the ANZ bank for the purchase of the property situate at Property N, [N], in the name of Mr E. The Wife submits that if that amount should be regarded as a liability, the debt should also be regarded as an asset in the hands of the Husband.
The Wife says that any obligation that exists, any agreement or contract, written or otherwise between Mr E and the Husband is somehow separate from any entitlement of the Wife. From the time that the loan was taken out it was an arrangement between Mr E and the Husband. All the repayments to date are current. There are no arrears. If the Husband does die, then there is a debt to the estate and that is a matter for the estate and Mr E. On that basis, in the absence of any other evidence, that amount should be regarded as neutral.
The Husband submits that the Court should look at the reality. The loan is up for review in 2015. Until then and not necessarily after then, Mr E is not in a position to borrow that amount of money because he does not have an asset base sufficient to support it. The Husband submits that it is unlikely that Mr E will be able to pay off the loan during the Husband’s life time. Either on the Husband’s death, or earlier should he have to go into a nursing home, the [D] unit will have to be sold and it will be subject to that mortgage currently being serviced by Mr E. It cannot therefore be said that there is an offsetting asset, given the fact that the real chance of that asset ever being achieved is unlikely.
I am satisfied that the arrangement between the Husband and Mr E with respect to the loan for the property in Property N should be treated as a separate matter and not be used to discount from the total assets held by the Husband at the time of these proceedings.
It is abundantly clear that, apart from some personal possessions and small items, and the motor vehicle in the possession of the Wife, all other assets are held in the possession of the Husband.
Contributions
At the commencement of the relationship the Wife indicates that she had personal effects, art works and antiques estimated at a value of $20,000.00 and some limited superannuation. She had a credit card liability of about $3,000.00.
At the time of the commencement of the relationship the Husband had the unit at the Village in [W], a significant share portfolio, an entitlement to annuities, a Department of Veterans Affairs pension, antiques, a motor vehicle and normal household items.
In essence, the Husband’s position has remained essentially the same during the course of the relationship. He currently has a share portfolio valued at about $2,300,000.00 and an apartment in [D] recently valued at $575,000.00.
The Wife has the Celica motor vehicle valued at around $3,000.00, some household contents, and an amount of $15,000.00 owed to her by her son, which came from the cashing in of her superannuation entitlements. Both parties have credit card debts of not significant sums and legal fees which they owe to their respective solicitors.
It would be fair to say that from a financial viewpoint the pool of assets has varied little during the course of the relationship.
The Wife’s financial contribution, admittedly, has not been of great substance. For a period of some 18 months she paid the Husband an amount of $600.00 per month with respect to her and Mr E’s residence in the property at [A]. She also gave evidence of purchasing various items for the property at [A] and also the property in the [D] and to have contributed to the household income from her salary, while she was working, with respect to the purchase of food and other items.
The Wife also claimed an indirect contribution to the acquisition, conservation and improvement of the property by her participation in the selection of the properties, both at [A] and [D], for the decoration of those properties, the layout of those properties and her general involvement in the maintenance of those properties.
The Wife also referred to the contribution that she made to the Husband in the care for his physical health, cooking, looking after him when he was sick and helping to reintroduce him to his family. She agreed that that was not over and above the sort of duties that you would expect from a wife although she did say that she felt that she put a bit of extra effort into the relationship between the Husband and his son, his son’s wife and his grandchildren and in trying to get him back in touch with his daughter.
While the Wife’s contribution as a homemaker and partner to the Husband may not be regarded as out of the ordinary, they should not on the other hand be underestimated. Clearly the Husband benefitted from the support, both emotional and practical, that she gave him and her concern for his health and well being.
Section 90SF(3) factors
The Wife in this matter is aged 66 and the Husband is 90. Neither of them could be described as being in a good state of health although generally speaking the Husband’s appearance would belie his age.
The Wife has no income apart from the benefits she might be entitled to through Centrelink. She has no property or other financial resources.
The Husband has assets in the vicinity of slightly less than $3,000,000.00 capable of generating him an income of some $77,000.00 per year, providing him with a suitable residence in [D] and a share portfolio in addition to the annuities from which he derives his income.
Neither the Wife nor the Husband could be held to be physically or mentally capable of engaging in gainful employment.
There are no children who have not attained the age of 18 years.
Neither the Wife nor the Husband have any commitments to other persons although the Wife’s son owes her some money as a result of a loan advanced to him and he also owes money to the Husband in relation to the loan advanced by the Husband to him.
As indicated the Wife is eligible and in receipt of Centrelink benefits and the Husband has also been in receipt of some Department of Veterans Affairs benefits. The Husband is quite capable of sustaining a reasonable standard of living on the basis of the assets and financial resources he has available to him.
The Wife is currently living in the student apartment, which Mr E purchased as an investment property, and has little capacity to sustain herself in a reasonable standard of living.
I am satisfied that the parties were in a de facto relationship for almost nine years.
There are two aspects to the length of that relationship and the extent to which it may have affected the capacity of the Wife to earn and to accrue assets. The first of these is that with the Husband’s encouragement she retired at the age of 61. In other circumstances she may well have continued in her employment until the age of 65 and to have therefore acquired some income and superannuation of her own during that period of time.
The second is that had the Wife not been in the de facto relationship with the Husband at the time, she may not have cashed in her superannuation and lent a significant part of that money to her son, therefore not being able to avail herself of it now.
The Husband put his case on the basis that this was a short period of cohabitation where the Husband had large assets. He referred the court in particular to the case of Kennon,[8] to the case of Figgins[9] and to the case of D & D.[10] On the basis of the percentage awarded to the wife in those cases, the Husband argues that the Wife’s claim in this case for 25% of the asset pool for her needs-based entitlements is clearly outside any proper discretion that the Court could exercise. On the Husband’s submission, the highest that had been awarded in any of those cases in relation to s.75(2) factors was some 7.5%.
[8] In the Marriage of C K and I W Kennon (1997) 22 Fam LR 1.
[9] Figgins & Figgins (2002) FLC 93-122.
[10] D & D [2006] Fam CA 245.
The Wife submits that it is of consequence as to whether the relationship was one of five years or 10 years. Anything under five years has been regarded by the Courts as being a relationship of short duration. Certainly by the time you get to a 10-year relationship it is in fact in the category of medium and starting to get into a longer-term relationship.
The Wife submits that there is an element of artificiality with respect to the determination of a percentage contribution in the context of a 10-year relationship. In final submissions, the Wife suggested that as the evidence stood that contribution both direct and indirect was probably greater than 5%. The Wife submitted that you need to look at the age of the persons under consideration when taking into account s.90SF(3) and determining what property adjustment the Court should make. The Wife submits that her state of health was in fact very poor and that in her current circumstances she could not afford to remain in private health cover, which affected her capacity to deal with her own ill health.
The Wife submits that she should receive something that gives her the capacity to purchase a home at least comparable to that of the Husband so that she could live with some dignity. The percentages are only there as a guide and an adjustment of what is ultimately just and equitable in the overall circumstances of the case. There is not some formula set by case law.
When you look at the cases cited by the Husband, it is not sufficient to look at the percentage of what is a significant pool but the actual amounts involved. What the Wife is seeking in her case is a redistribution of the property of the parties so that it is just and equitable. The Wife’s case is that in order to purchase a residential property she would need up to $500,000.00. What would her situation be if she were to receive $250,000.00? Even if she were to invest that amount, what would that produce for her? About $12,500.00 per year. That is the money on which she would be required to live and pay rent and in her submission that would barely cover rental on a reasonable property.
On the Wife’s case if the Court was to make an order in favour of the Wife in the sum of around $880,000.00 it would still leave the Husband about $1,500,000.00 in investment, his annuities untouched and the accommodation that he currently has.
The Court has to consider that the Wife is 66 years old. She has significant needs and an order in the vicinity of $250,000.00 could barely be just and equitable or make an appropriate adjustment.
Conclusions
The parties in these proceedings are aged 66 and 90. They were in a de facto relationship for almost nine years. At the commencement of the relationship, the Husband had considerable resources including property, shares, an annuity and access to a Department of Veterans Affairs pension. The Wife had limited financial resources, no property, a small amount of superannuation and the income she derived from part-time employment and a part-disability pension.
At the time of the separation the Husband’s position had changed little in relation to his assets. The Wife’s position likewise after separation was little different to her position when the relationship commenced, apart from the fact that she was no longer in part-time employment and had been totally financially dependent upon the Husband for some years.
There is no doubt that her financial contribution to the acquisition of the property of the relationship was limited, if any, and to the conservation of and improvement of that property was likewise of minimal significance. Her contribution, however, to the welfare of the family should not in my view be underestimated. It is indicative of the value that the Husband placed on her contribution as a companion and a support to him that he expressed such extreme anger at the fact that she had left him. Clearly the value of her support and of her contribution to his health and well being was significant.
There is no magic formula in assessing the amount that should be considered an appropriate representation of justice and equity in the settlement of property matters either under s.79 of the Act or under the sections relevant to these proceedings. While assessing the parties in percentage terms is the generally accepted procedure, s.79 and s.90SM of the Act do not preclude the Court from determining the relevant entitlements of the parties in monetary terms rather than in percentage terms.[11]
[11] In the Marriage of C K and I W Kennon (1997) 22 Fam LR 1, majority decision at page 20.
While s.90SM(4) of the Act sets out the factors that the Court needs to take into account, there is no mathematical formula. There are no points scored for the number of years that the parties spend together. There are no points scored for the number of children they have. There are no points scored because of their relative capacity to find income and maintain themselves economically after separation.
I am satisfied that like the wife in Kennon’s case, the Wife in this case made a major contribution to the welfare and well being of the Husband and the maintenance of the relationship. The fact that the Husband may have made equivalent contributions and certainly more contributions in a financial sense does not negate this. As the majority judgment in Kennon points out:
Marriage involves a myriad of matters, large and small, which go to make up that union and differentiate it from more casual, transitory relationships. It involves sharing the minutiae of daily life, support during good and bad times, care and intimacy. These and other matters are intended to be encompassed by the matters in s79, the actual balance of those components varying from marriage to marriage. Essentially it is an intimate sharing of mutual but diverse talents for their joint benefit.[12]
[12] In the Marriage of C K and I W Kennon (1997) 22 Fam LR 1 at page 22.
In my view the same can be said of a de facto relationship of the length of which we are dealing in this matter. While the Husband sought to rely on the outcome in Kennon as indicative of the percentage of the total pool which may be awarded to the Wife in circumstances similar to the Wife in this case, it should be pointed out that the majority in that matter agreed with the trial Judge that it was a rather artificial exercise to approach the case on the basis of a percentage of the total property pool and that it was better to award a monetary figure which appeared to be appropriate.[13]
[13] In the Marriage of C K and I W Kennon (1997) 22 Fam LR 1 at page 27.
In that case, the contributions of the Wife under s.79(4)(a) of the Act were virtually non-existent and under s.79(4)(b) were very limited, but her contributions under s.79(4)(c) were significant. She carried out her responsibilities as wife and homemaker in ways that were required of her given the particular circumstances of the parties. The Court also found that there were some compelling factors under s.75(2), the most obvious being the disparity in the financial position of the parties and their future financial prospects. In that case, the majority of the Appeal Court considered a figure of $700,000.00 to be an appropriate amount to be awarded to the wife. Of course $700,000.00 in 1997 was worth considerably more than it is today. Moreover, the wife in that matter was in a substantially different position to the wife in this case. First of all, she was 36 years of age, was responsible for no children and had an income earning capacity. In addition she already had assets to the value of some $54,000.00 at the time of separation. It was a relatively short marriage with no children and the wife was able to continue in employment of the type which she had prior to cohabitation.
Similarly, in the matter of D&D[14] at the time of separation the wife who was aged 52 had a house with a mortgage, a small car, jewellery, furniture and superannuation totalling almost $300,000.00. She had given up her employment on marriage and had been almost totally financially dependent on her husband until the separation. Like the Wife in this matter she had been well provided for and enjoyed a comfortable lifestyle in the marriage. In that case his Honour Carmody J expressed the opinion:
Intention, contribution, reliance, compensation and need are all recognised justifications for the power to adjust the property interests of spouses because of the circumstances of the marriage or its breakdown.[15]
[14] D & D [2006] Fam CA 245.
[15] D & D [2006] Fam CA 245 at paragraph 47.
His Honour went on to say:
Each party expects the other to contribute as much as they can in their chosen or allocated sphere. They do not keep a running record or account of who does what for the overall benefit of the family. What each partner gives or gives up is not assessed in purely monetary terms or to the extent that they have financial consequences. To paraphrase the contemporary American poet, E. E. Cummings, what is done by one alone is done for the other. The degree of effort counts for more than the actual results achieved. What matters most is whether each of them pulled their weight and shouldered their fair share of the burden.[16]
[16] D & D [2006] Fam CA 245 at paragraph 51.
His Honour went on at paragraph 54 to say:
Economic justice is not a fixed standard. Every case depends on its own unique facts. What is important is to somehow give a reasonable value to all the elements that go to making up the entirety of the marriage relationship. As the Full Court recognised in Ferraro making a crucial comparison between contributions through fundamentally different activities is a difficult undertaking. So too is trying to objectively assess the value of contributions to the welfare as distinct from the wealth, of the family. The former are vulnerable to undisclosed subjective value judgments and are not readily susceptible to measurement in dollar terms. Care must therefore be taken not to undervalue the indirect and homemaker contribution of a wife in a marriage of short duration.
I accept the argument, however, put by the Husband that an exercise such as this one is not to be conducted by the type of approach which arrives at a figure which is sought to satisfy the needs of the homemaker and gives the balance to the breadwinner. As his Honour pointed out in D & D by reference to the judgment of Thorpe LJ:
The relevant statutory provision required a much more sophisticated evaluation of the extent of the wife’s commitment to an investment in the marriage both emotionally and psychologically.[17]
[17] D & D [2006] Fam CA 245 at paragraph 102.
Taking into account all of the matters in this case, in particular, the matters concerning the Wife’s contribution to the welfare and well being of the Husband and to those particular matters contained in s.90SF(3) of the Act, in particular her age and state of health, the income, property and financial resources that she now has (essentially nil) and her capacity for gainful employment which I also assess as nil and the fact that I am satisfied that the Wife is entitled to a reasonable standard of living under all the circumstances, an adjustment of the property relationship between the two parties is clearly justified.
Further, I am satisfied that the Wife’s position may potentially, and I do not put it any higher than that, have been better had she not made decisions which were associated with her expectation that the Husband would continue to maintain her in particular, her decision to retire at age 61 and her decision to loan more than half of her superannuation to her son.
I have decided that a just and equitable settlement in this matter would require the Husband to pay the Wife the sum of $600,000.00. This would require the Husband to sell some of his shares, which would attract some level of capital gains tax. He would, however, retain the property in which he lives and there would be no impact on his annuity or his pension which are his primary sources of income.
That amount would enable the Wife to purchase a unit and furnish it and also have some small amount left over to invest.
While I have not looked at the issue from the point of view of setting a percentage of the pool, on my calculations that sum would come somewhere in the vicinity of 20-25% of the total pool.
I certify that the preceding one hundred and three (103) paragraphs are a true copy of the reasons for judgment of Whelan FM
Date: 9 May 2012
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