ER & ER
[2007] FMCAfam 399
•28 June 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ER & ER | [2007] FMCAfam 399 |
| FAMILY LAW – Property settlement – 25 year marriage – early contributions eroded – parties on pensions and low incomes – husband retained some funds for personal purposes – husband made minimal contribution to care of house and family – adjustment of property 60% in wife’s favour. FAMILY LAW – Spousal maintenance – wife has need – husband has no capacity – application dismissed. |
| Family Law Act 1975, ss.74(1), 75(2), 75(3), 79(2), 79(4) |
| Hickey v Hickey (2003) FLC 93-143 |
| Applicant: | NER |
| Respondent: | TER |
| File Number: | MLM 8191 of 2006 |
| Judgment of: | Riley FM |
| Hearing dates: | 31 May 2007 & 1 June 2007 |
| Date of Last Submission: | 31 May 2007 & 1 June 2007 |
| Delivered at: | Melbourne |
| Delivered on: | 28 June 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr Fatouros |
| Solicitors for the Applicant: | Merhi & Associates |
| Counsel for the Respondent: | Ms Baczyinski |
| Solicitors for the Respondent: | Balot Reilly & Associates |
ORDERS
As and by way of property settlement, within 60 days the wife pay or cause to be paid to the husband the sum of $156,648.53 (“the payment”).
Contemporaneously with the payment, the husband do all things and sign all documents necessary to transfer to the wife, at the expense of the wife:
(a)all of his right title and interest in the property situate at and known as 17 H Grove, C (“the property”); and
(b)the plot in which NER is buried.
In default of the payment being made within 60 days, the property be sold out of court and the proceeds of the sale be disbursed:
(a)first, to pay all of the costs, commissions and expenses of the sale;
(b)secondly, 40 percent of the balance less $2,400 to the husband; and
(c)thirdly, 60 percent of the balance plus $2,400 to the wife.
Pending the payment and transfer or sale of the property:
(a)the wife have the sole right to occupy the property and during such right of occupation the wife continue to pay all rates, taxes and other outgoings with respect to the property as they fall due;
(b)the parties hold their respective interests on trust pursuant to these orders; and
(c)neither party encumber the property without the consent in writing of the other party.
The wife be solely responsible for CER’s school fees.
The wife indemnify the husband and keep him indemnified in relation to CER’s outstanding school fees and any liability he may have in respect of future school fees.
Unless otherwise specified in these orders and save for the purpose of enforcing any moneys 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 in action) in the possession of such party as at the date of these orders, including the husband’s 1996 EL Ford Fairmont, bank accounts, furniture, personal possessions and like chattels;
(b)insurance policies remain the sole property of the owner named therein; and
(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;
(d)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
All extant applications, including the wife’s application for spousal maintenance, be otherwise dismissed and the proceedings removed from the list of cases awaiting hearing.
Pursuant to rule 21.15 of the Federal Magistrates Court Rules 2001, it is certified that it was reasonable for the parties to employ an advocate.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLM 8191 of 2006
| NER |
Applicant
And
| TER |
Respondent
REASONS FOR JUDGMENT
Applications
This is an application by the husband for property orders. The husband asks that the matrimonial home, its contents and certain items of jewellery be sold and the proceeds of sale be divided 50% to the husband and 50% to the wife and, in the alternative, that the wife pay the husband 50% of the value of the matrimonial property within eight weeks. The husband also seeks orders that various items of property be returned to him by the wife and that she pays him $150 per week rent from the date of separation until payment of his share of the matrimonial property.
The wife in her amended response seeks orders that the husband transfer his interest in the matrimonial home to the wife and that she pay him 35% of the value of the matrimonial home. The wife also seeks orders that the husband sell his 1996 EL Ford Fairmont and that the proceeds be divided 65% to the wife and 35% to the husband and that the wife retain the chattels in the matrimonial home. Additionally, the wife seeks spousal maintenance of $200 per week. The wife also sought orders in her amended response that the husband pay half of the costs of the orthodontic treatment of one of the children of the marriage and a half of his school fees. Finally, the wife sought orders that the husband transfer to the wife the burial plot in which their daughter N is buried.
The wife produced very little by way of documentary evidence and the husband nothing at all. The case was largely a matter of one person's word against the other. Having observed the parties give evidence, I am not satisfied that either party was entirely truthful. However, overall, I found the wife to be more credible than the husband.
Background
The wife was born in 1947 and is now 60 years old. The husband was born in 1955 and is now 51 years old. The parties met in Lebanon and married there in 1980. They had five children, N, who was born in 1982, A, who was born in 1983 and who is now 23 years old, C, who was born in 1985 and who is now 22 years old, L, who was born in 1987 and is now 19 years old and C, who was born in 1990 and is now 17 years old. N had Downs Syndrome. She died on 21 September 2003.
The wife lived in Australia prior to meeting her husband in Lebanon. She claimed that she had savings from working in Australia for three years at the time they met. The parties disputed who paid for their wedding and for their tickets to Australia. The husband maintained that he had worked as a policeman in Lebanon prior to the marriage and funded a lavish wedding. He also said that he paid for his own ticket to Australia from his own funds. The wife maintained that the husband was unemployed when she met him and that she paid for his airfare to Australia. Having observed the parties give evidence, I am satisfied that the husband did work in Lebanon as a policeman prior to the marriage and did fund the wedding and his own airfare to Australia.
The parties came to Australia shortly after their wedding. The husband said that the wife did not work after returning to Australia in early 1981. The wife said that she worked until she was about seven months pregnant with N. That would have been in about April 1982. The parties agreed that the wife has not worked since then as she needed to care for her disabled daughter and later the other children. I find that the wife worked outside the home until, but not since, about April 1982.
The husband obtained a job in a factory doing process work a short time after the parties arrived in Australia in 1981. He continued working in that job until about 1985 when he was injured in a motor vehicle accident that occurred on his way home from work. He was initially given workers compensation payments by way of wages and was then given a $20,000 lump sum payment. The husband at that time began receiving social security benefits in the form of a disability pension.
The parties initially rented a house at 17 H Grove, C and subsequently bought it. A contract of sale tendered in evidence shows that the parties bought the house in 1983 for $43,000. It is common ground that the purchase was facilitated by a bank loan. The loan was paid off in 1997. The wife claimed in her affidavit that she provided $8,000 to $10,000 from her own savings and from the sale of some jewellery for the deposit. The husband said that the deposit of approximately $3,000 was provided by a friend. No evidence was called from the friend. The contract of sale shows that the deposit was $4,000. When this evidence came to light, the wife maintained that she had provided that $4,000 from her own savings and used the balance of the $8,000 to $10,000 to buy furniture and such things.
Having observed the parties give evidence, I accept that the wife provided the $4,000 deposit from her own savings. I also accept that she paid an additional amount, though not as much as $4,000 to $6,000, for the purchase of furniture and such things. The parties had already been living in the house for a couple of years at the time they bought it. I expect that they would have furnished the house by then from their combined earnings and the wife’s savings.
The wife said that she made all of the mortgage repayments which were approximately $300 per fortnight except that the husband's $20,000 lump sum payment was used to effect a substantial reduction in the mortgage. The wife maintained that the husband kept all of his wages when he was working and kept all of his disability pension when he began to receive it. The wife maintained that she used her own money to pay the mortgage, pay all of the bills and pay for all of the family’s food and clothing needs. She said that the husband used his money to pay for overseas trips and to send to his relatives overseas.
The wife initially said that her total fortnightly income was $300 in the period of about 1982 to 1985. She said that this money was “for the children” and alternatively unemployment benefits which she received even though her husband was working. However, she later said that it was in the nature of a carer's pension for which she was eligible because of her need to care for N. It was pointed out to the wife that she had said that the mortgage alone was $300 per fortnight. After a short break in her evidence, the wife said that, actually, she received $500 per fortnight in the period 1982 to 1985.
The wife’s counsel interrupted the cross examination at that point and said that the wife meant that she received the $300 per fortnight in addition to the $500. The wife then said that in addition to the amount she received as a carer’s pension for herself, she also received various amounts at various times for her children. These were perhaps in the nature of family allowance. She said these amounts varied from about $28 per fortnight up to $100 per fortnight for each of her children. She said that at times she received at least $700 to $800 per fortnight in government benefits for herself and her children, being the $300 plus the $500. However, later again, the wife conceded that she had not really received $300 as a carer’s pension in about 1982. She said that at that time, it was more like $150 to $200 and only became $300 after about 1990.
The wife also said that all of the children except N obtained part time jobs as soon as they turned 15 and contributed to the family income. The second child turned 15 in 1999. That is the earliest date from which the children could have contributed to the family income.
The wife said that the husband worked as a taxi driver earning cash in hand while in receipt of the disability pension. The wife maintained that the husband did not share with the family any of his earnings. He, on the other hand, said that he gave money to the family whenever he was asked. He also said that the wife looked after the money because she spoke much better English than he did. The husband said in oral evidence that he had only worked as a taxi driver for about five months. That is, he maintained that he began working as a taxi driver at about the beginning of 2007. However, in his affidavit he said that he began working as a casual taxi driver on 12 May 2006, that is, about 12 months ago. I excluded from evidence a statement that purports to be from the husband's employer saying that he commenced employment on 12 May 2006 on the basis that it was not supported by evidence on oath from the employer and on the basis that it was not intended to make the alleged employer available for cross examination. The husband admitted that he obtained a taxi drivers licence over 10 years ago. In the light of all the evidence, I find that the husband began working as a casual taxi driver in or around 1997.
I do not accept that the government benefits paid for the children can be described as the wife's personal money. To my mind, those benefits were family money and were just as much the husband's money as the wife's, even if she controlled it. Accordingly, I consider that any family expenses paid from that money were paid jointly by the husband and the wife. Similarly, any money contributed by the children from their part time jobs cannot be regarded as the wife's money alone. Rather, it should be seen as the children’s contribution for the benefit of the family generally.
The amount that the wife received from the government in the nature of a carer's pension could be characterised as her own wages and in a sense her own money. I do not doubt that the wife contributed all of her available financial resources to the family. However, I do not accept that it was more than $150 per fortnight in the early 1980’s. The wife did not provide any records indicating how much the carer’s pension was at that time. However, she did tender a letter from Centrelink dated 30 January 2006 addressed to her which showed that her disability support pension at that time was $408 per fortnight. I would be surprised if a carer's pension was more than $150 per fortnight 20 to 25 years earlier. In the absence of any substantiating evidence, I am not prepared to accept that the carer's pension was more than $150 per fortnight in the early 1980’s. (This conclusion is borne out by an examination of the historical figures for carer’s pensions which are available on the web.)
The wife maintained that the mortgage was $300 per fortnight. As I have found that her carer’s allowance was no more than $150 per fortnight, and as the family allowance was joint funds, it cannot be accepted that the wife paid for all of the mortgage and the utilities and food and clothing from her own funds. The family allowance at that time cannot have been much. Accordingly, the husband must have contributed to the household expenses to a considerable extent in the early 1980’s.
On the other hand, the husband had a number of trips overseas when he stayed in Lebanon for months at a time. He went to Lebanon in 1986 and took the second daughter, A, with him. He went again in 2000, 2003 and 2005. He said that he paid for the trips in 1986 and 2005. He said he was a member of the committee of his church and the church paid for his trip in 2000. He said that the trip in 2003 was to attend the wedding of his brother and his brother paid for that trip.
The husband did not explain what he lived on when he was in Lebanon except to say that some friends lent him money. He did not disclose any corresponding liabilities in his financial statement. He said that he stayed at a house owned by his mother in which he denied having any equitable interest. The husband said that his disability pension was cancelled in 2005 when he was in Lebanon, so it may be taken that he was not living on that. The wife’s counsel put to the husband that he worked the family land in Lebanon and lived on the proceeds. The husband denied that.
Having observed the parties give evidence, I am satisfied that the husband spent a substantial part of the money that was available to him for overseas trips and other personal uses rather than for the benefit of his family. I am not persuaded that the church paid for the trip in 2000 as this claim was made late in the piece and had the hallmarks of recent invention. Moreover, the claim was not substantiated by any documentary or oral evidence from the Church. However, I do accept that the trip in 2003 was funded at least in part by the husband's brother. It strikes me as being inherently plausible that the husband's brother would have paid for the airfares of his close relatives to attend his wedding.
I accept that the husband stayed in Lebanon in a house owned by his mother. I find that his living expenses were modest and were funded from his disability pension or from savings from working in Australia. I do not accept that he worked the land when he was in Lebanon.
One of the husband's trips included A, and may be regarded as a contribution to the family. Additionally, the wife acknowledged that the husband bought for the benefit of the family a Pentium III computer. Also, there was mention of a video camera that he had bought. While the wife might not have chosen to buy such items, I nevertheless regard them as contributions for the benefit of the family funded by the husband.
Additionally, I accept the husband's claim that the bought a 1999 Toyota Seca in 2000 for one of his children for $18,000. He says he contributed only $3000 and his family contributed the other $15,000. No financial records were produced to indicate who paid for the vehicle or how much it cost. The wife said he actually bought the vehicle from the wreckers for $8,500. The husband agreed that he did buy cheap cars from time to time for various people and had them done up. In the circumstances, I accept that the wife’s evidence about the cost of the Toyota Seca. I am not persuaded that the husband’s family contributed to the purchase price.
The wife said the husband bought the car for A but had it registered in N’s name because the registration was cheaper. The husband says he bought it for N and wants it back. The wife says that N could not drive so it could not have been bought for her. The husband says that his intention was that other family members would drive N to her various medical appointments. The car is presently driven by A, who sat in court beside her mother throughout the hearing.
I find that the husband bought the car for A but registered it in N’s name because it was cheaper. Accordingly, N held the car on trust for A. Since N’s death, her personal representatives under her will or the laws of intestacy would be able to exercise to any power N had as a trustee. Those powers might include transferring the car to A. One way or another, A’s car is not matrimonial property. A dispute between a father and an adult daughter about the ownership of a car is not a matrimonial proceeding. I do not see how the court could make orders compelling A, who is not a party to the proceeding, to transfer the car to her father. Accordingly, no such orders will be made.
I accept that the husband retained a substantial part of his earnings for his own purposes but also made some contributions to the family. I do not consider that those contributions were confined to taking A overseas and buying a computer, a video camera and the Seca. Rather, I consider that the husband contributed a good part but by no means all of his earnings for the benefit of the family.
I am reinforced in this conclusion by the husband’s evidence that he gave the family whatever they asked for. This, to me, means that the husband retained control of all of his money and gave limited amounts to the family as and when he saw fit. The husband clearly used a good deal of his own money for his overseas trips. I find that the husband funded both the airfares and the living expenses of the trips in 1996, 2000 and 2005 and the living expenses of the trip in 2003. I do not consider that the living expenses of these trips would have been very large, because the husband was staying with relatives. No figure for the total cost of these trips was put to the husband. I am unable to estimate their cost.
I also note that the husband did not claim to have paid for any part of the children’s school fees, except the $500 that he gave to C recently that the husband claimed was provided for that purpose. I do not accept that it was for school fees. Rather, it was given by the father as a reward for C going to see him. It was not paid directly to the school or to the wife for her to pay school fees. Accordingly, I am satisfied that the mother has been responsible for the payment of all of the children’s school fees, although the husband accepted that they would be educated at some cost through the Catholic education system.
The husband alleged that he borrowed $20,000 from his sister A on 14 February 1990 to renovate the house. He did not call evidence from A and did not provide any bank or other records to substantiate this alleged loan or the alleged renovations. He exhibited to his own affidavit what purports to be a note from his sister verifying the loan. He also exhibited another note purporting to be from his sister stating that she also lent the husband $1,200 on 1 June 2006 and $1,500 on 7 June 2006. These documents were not admitted into evidence on the basis that they were not supported by sworn evidence from the sister and she was not going to be called for cross examination. The alleged borrowing was not included in the husband's financial statement filed on the first day of the hearing, although there was a mention of a loan from the sister of $2,700.
The husband was asked by his own counsel a number of times to state the form in which the money was advanced by the sister. However, the husband did not provide a straight answer. Enquiries were made of the interpreter and she assured the court that she had correctly interpreted the questions.
The husband said that he had a passbook account and the last passbook was finished about one year ago and he did not keep it. There was, accordingly, apparently no way of verifying that the sister advanced $20,000 to the husband in 1990. The wife disputed this alleged loan. I consider that the evidence concerning the alleged loan from the husband's sister is entirely inadequate. Additionally, in view of the husband's indirect answers, I am not persuaded that the husband borrowed $22,700 or any other sum from his sister.
The husband also alleged that in the late 1980s he borrowed $10,000 from his brother to add a room to the house. There was no documentary evidence in support of this claim. The wife disputed it. She said the brother was in no position to lend money at that time because he had been in jail for a long time. I am not persuaded that the husband borrowed $10,000 or any lesser sum from his brother.
The wife said that in 2000, she received an inheritance from her mother of $14,000. The wife says that she used this money to renovate the property by adding a verandah at the back of the house, having it painted inside and out and changing the light fittings. The wife later said that she also used part of the inheritance to contribute to the funeral expenses for N in 2003. The parties agreed that a verandah was built at the back of the house in about 2002. No documentary evidence was provided of its cost. Nor was there any documentary evidence that any other renovations were done at about that time. The husband said he knew nothing of the wife’s alleged inheritance of $14,000.
Nevertheless, having observed the wife giving evidence, I accept that the wife did receive an inheritance of about $14,000. I also accept that the inheritance was spent on the house. I do not accept that part of it was spent on Ns funeral. This claim was made later in the wife’s affidavit and did not ring true.
The wife agreed that she had had one trip to Lebanon, in about 1998. Apart from that trip, I accept that the wife contributed all of her available resources to the family.
During the marriage, the wife maintained that she did all of the house work and childcare and the husband did none. When asked about what household chores he did, the husband was derisive and said, "What do you mean? You want me to wash the dishes?” He also said that he was unable to cook. He said that he was unable to do very much around the house because of his injury.
The parties agreed that they hired outside assistance. The wife said that some was at a nominal expense as it was provided through the local council but that she paid for it. The husband said that it was paid for with their joint funds. Additionally, the wife said that for about the last 10 years she has paid a man to do work in the garden every two months and he is paid $100 per visit. When asked about this matter, the husband said, "If she wants to have a rest and play lazy person, it’s her problem.”
I accept that the council assistance was at a low cost to the parties and was paid for jointly. I also accept that the wife engaged gardening assistance at the cost of $100 per visit and that it was paid for from family funds and from her own carer's pension but not from the husband's funds.
The wife agreed that each of her children was born by caesarean section and she spent one to two weeks in hospital on each occasion. The husband maintained that while she was in hospital he and his mother looked after the other children and the house. The father also said that he sometimes took the children on trips including fishing trips to B.
I accept that the husband did sometimes take the children on trips with him. I accept the husband's evidence that he and his mother looked after the children and the house when the wife was in hospital. I find that on those occasions the bulk of the work was done by the husband's mother. I find that overall the husband contributed virtually nothing to the running of the household and very little to the care of the children. I also accept the wife's evidence that the husband sometimes left her alone with the children for months on end while he was in Lebanon.
In 2003, the husband was in Lebanon when N became very ill and was hospitalised. The husband remained in Lebanon for his brother's wedding until Nadine died in 2003. The wife organised N’s funeral in the husband's absence. However, he was back in time for the burial. The parties disputed who paid for her funeral. The husband maintained that he paid for the funeral and N’s gravestone. The wife acknowledged that the husband paid for the gravestone, but said that the funeral was paid for with donations from friends and family and from part of her inheritance received in 2000.
I find that the husband paid for N’s gravestone and contributed to the cost of the funeral although there were also donation from friends and family. I do not accept that the wife used part of her inheritance to pay for the funeral. I do not accept that she had anything left from the inheritance at that time.
The wife said that she bought a two-person burial plot for N and herself. The wife says that she wishes to be buried in it with N. However, the title to the burial plot was in the name of the daughter, A. She was persuaded by the husband to transfer it to him. The wife now wants it to be transferred to her and the husband refuses. The burial plot cannot be sold and, as such, it had a cost but no realisable value. The wife said that the husband does not want to be buried in it because he has always said that he wants to be buried in Lebanon. I find that the wife paid for the burial plot.
There was a dispute as to the date on which the parties separated. The wife said that they separated on 8 May 2005 when the husband went to Lebanon. The husband says that they separated on about 1 February 2006 when he returned from that trip. The parties were divorced on
10 October 2006. I accept that the separation occurred on 8 May 2005.
The wife said that the husband was violent towards her during the relationship. She said that on one occasion she needed stitches in her arm. The husband denied being violent towards the wife. However, he did admit that an intervention order was sought against him after separation which was resolved with an undertaking on his part. Having observed the parties giving evidence, I accept that the husband has been violent towards the wife.
As noted above, the wife tendered a letter from Centrelink dated
30 January 2006 which indicated that as at that date she was on a disability support pension. I accept that evidence. The wife said that she was on a disability pension because she had some health problems which started an unspecified time ago. She provided no medical evidence of what those health problems were but she reported pain in her lower back and hips and stress.
The husband's counsel accepted that the wife at the age of 60 was not capable of working but said that the husband was in the same position. The husband did not provide any medical evidence of his health situation and also reported back pain and other problems. He said that due to pain, he was unable to drive a taxi for more than two or three hours at a time. He said that he only worked two or three hours per day and earned about $170 per week.
The husband said that his disability pension was cancelled when he was last overseas because he failed to fill in a form for three months and they refused to reinstate it. He provided no documentary evidence from Centrelink about the reason for the cancellation of his pension or even confirming that it had in fact been cancelled. I consider that Centrelink would readily provide such documents on request. It may be that his pension was cancelled or not reinstated because it was considered that he did not have a disability.
The wife did not accept that the husband is not capable of working. Indeed, the wife maintains that the husband has the capacity to earn significant amounts of income and should pay her spousal maintenance of $200 per week.
As conceded by counsel for the husband, I accept that the wife has no real capacity for work. However, I do not accept that the husband is only able to work two to three hours per day as a taxi driver. There was no medical evidence to that effect and no records from Centrelink about the reason for the cancellation of the husband's disability pension if in fact it was and remains cancelled.
The wife maintained that after separation she spent money on the matrimonial home in that she had the house painted and she paid for two new fences, one on each side of the property. She said one cost $400 or $500 and the other cost about $300. In support of this claim, she produced a tax invoice from Sicily Fencing and another from Jim's Fencing. They are both for $485.65, they are both dated 11 June 2005, they both bear invoice number 566, they both have the same ABN number, and they provide an identical description of the work, being "erection of 1.95m paling fence 14.6m in length demolition and removal of the old fence”.
The wife also produced a photograph of a fence on one side of the house that appeared to be new. The husband agreed that part of the fence looked new, being the palings, but that the posts were old. Based on the photographs and the description of the work in the invoices, I accept that an entirely new fence was erected on one side of the house. I do not accept that the old posts were retained. I do not accept that two fences were built. The invoices are identical, including in their dates, invoice numbers and ABN numbers. I consider that notwithstanding the different business names, one invoice is a copy of the other. Accordingly, I accept that the wife in about June 2005, while the husband was in Lebanon, paid for the construction of one new fence which cost $485.65.
I also accept that the wife arranged for the painting of the house. However, the wife’s initial claim about this was that it was done during the marriage and paid for from her inheritance from her mother. I find that the painting was done during the marriage and paid for from the inheritance.
The second child, A, is 23 years old. She works and also studies at Latrobe University. She lives at home with her mother. The third child, C, he is 22 years old and is presently living with an uncle in Queensland where his mother says he is gaining management experience. He has deferred his tertiary place. The fourth child, L, is 19 years old and living with her mother. She is also engaged in tertiary studies. The youngest child, C, is 17 years old and doing Year 12 this year. He lives at home with the wife.
The wife produced to the court a statement dated 11 May 2007 from the local Catholic high school stating that an amount of $8,378.66 was owing in respect of school fees for C. The statement shows an opening balance as at 1 February 2007 of $6,558.66. The wife says that the whole amount remains outstanding. I accept that evidence. The parties were in agreement that all of the children had been educated at Catholic schools and that their education was at a cost.
The wife also produced some invoices in respect of dental work for C. The first showed a payment of $130 on 26 July 2006, the second a payment of $500 on 5 April 2007, the third a payment of $210 on 17 October 2006, the fourth a payment of $301 on 20 November 2006, the fifth an account balance of $596 on 20 November 2006, the sixth a credit of $300 on 29 November 2006 which resulted in a closing balance of zero, the seventh a payment of $1,000 on 7 December 2006 and the eighth a statement dated 7 December 2006 which showed that a total of $5,500 was to be paid between 7 December 2006 and 7 March 2009 for orthodontic treatment. The wife gave evidence that the treatment had begun. I accept that evidence.
The parties were in agreement that the children are estranged from their father. The wife denies that she has alienated them from their father and says that even if she had told them to have nothing to do with him they would not act on her instructions. The wife says that the husband's own actions have caused the children to be estranged from him, those actions being his violence towards the mother and being generally selfish.
When asked whether he had ever contributed to the children's school fees, the husband said that he gave C $500 because C went to visit him. The husband did not mention any other contributions to the children's school fees. When asked whether he would contribute to the cost of C’s orthodontic treatment, the husband said that he would take him to the dental hospital and pay any extra amount that was payable.
The husband has been assessed to pay the minimum amount of child support for C, being about $5 per week. He has paid about $150 but is about $150 in arrears.
The property application
The legislation
Section 79 of the Family Law Act1975 (“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 matters to be taken into account under ss.75(2) of the Act are as follows:
(a)the age and state of health of each of the parties;
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
(e)the responsibilities of either party to support any other person;
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party;
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
(l)the need to protect a party who wishes to continue that party’s role as a parent;
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation;
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party;
(na) 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; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties.
The four step approach
In Hickey v Hickey (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 ….
STEP 1: The assets and resources
The parties agreed that their assets of monetary value consisted of the matrimonial home and the husband's 1996 Ford. There were various items of jewellery which were of sentimental value. Orders were made by consent at the hearing in respect of some of these. There were other items which belonged to the husband which the wife said she had already given him or which were lost. I do not propose to make any orders about these matters as I am not satisfied that the wife still has them. Finally, there is the burial plot which is of great sentimental value but no monetary worth.
The parties agreed that the matrimonial home has a value of $400,000 and that it has no mortgage over it. The husband said that his unencumbered car was worth $4,000 and the wife said it was worth $8,000. No valuation evidence was provided by either party. There was evidence that it was bought for $7,500 a few years ago. In the circumstances, I attribute a value of $6,000 to car. Nothing was said by counsel about the value of the contents of the matrimonial home. I take it that the $400,000 includes the contents. Accordingly, the asset pool has a monetary value of $406,000.
There is an outstanding account dated 11 May 2007 from C’s school totalling $8,378.66. It is addressed to both parties. I take it to be a joint debt. It shows an outstanding balance as at 1 February 2007 of $6,558.66 without stating the period over which it accrued. However, the account then says there are two instalments of $910 due on 28 February 2007 and 11 May 2007. I infer from this that the school fees are about $3,640 per year and that the fees for 2005, 2006 and 2007 are outstanding. The outstanding school fees are a joint debt that has accrued largely since separation. I do not accept that the husband’s payment of $500 to C was referable to school fees. The fees need to be paid and deducted from the asset pool. Accordingly, the asset pool is $397,621.34.
The dental accounts for C have been paid. There is an outstanding orthodontic account for $1,000 for an initial deposit and an invoice with two amounts of $500 which have become payable. The accounts are addressed to C’s older brother, C, also known as C. I am not satisfied that the outstanding orthodontic fees are a debt of the parties. It could be that C has undertaken to pay for the dental work. There is nothing to suggest that the husband has had any involvement with the orthodontic treatment or has in any way incurred a liability for it. I do not consider that the outstanding $2,000 should be deducted from the asset pool as a debt of either or both of the parties.
The wife is in receipt of a disability pension of a little over $400 per fortnight. The husband claims to earn about $170 per week as a taxi driver. I suspect that he earns more than that. However, there is insufficient evidence before the court for any finding to be made about the husband’s earnings except that he earns at least $340 per fortnight.
In addition, the wife has the benefit of at least part of the earnings of her children and the family allowance that she receives. No figures were provided to the court about these amounts. The husband lives with his mother and a brother. It is rent free at present but it was suggested that he might have to pay rent in the future in the event of a property settlement.
STEP 2: Contributions
Initial contributions
I accept that the husband paid for the wedding and his own airfare to Australia. I also accept that the wife contributed $4,000 from her savings for the deposit on the house and contributed at the commencement of the marriage a motor vehicle of modest value. The value of all of these contributions has been eroded, so to speak, over the course of the 25 year marriage.
Contributions during the marriage
As indicated above, I do not consider that any money paid by the government by way of child endowment or family allowance should be treated as the wife's personal contribution. I consider that any such money should be treated as a joint contribution by both parties. Similarly, I do not consider that any monies contributed from the children's part-time earnings should be attributed to either the wife or the husband. The children’s contribution is best characterised as board. That is, as a partial offsetting of the cost of food, utilities and accommodation.
In 1985, the husband contributed his $20,000 lump sum payment in reduction of the mortgage. This had the effect of greatly reducing the interest payable on the loan. It was an amount that was nearly half of the initial purchase price of the home, which was purchased only two years earlier. However, this contribution was made over 20 years ago. In the circumstances, and in accordance with the submissions of the husband’s counsel, I consider that the value of this very significant contribution has eroded over time to a point where it is now of negligible significance.
I accept that the wife made a financial contribution to the family of all that she received in the form of government social security benefits, except that she did have one trip to Lebanon during the course of the marriage. The husband on the other hand contributed some of what he received in social security benefits and from driving taxis. He paid for the computer, a video camera, a part of the Toyota Seca and no doubt a number of other day to day expenses. However, the husband also retained a significant proportion of the moneys available to him for his own personal use, including for the purposes of three overseas trips. Only one of those trips included another member of the family, namely, A. I do not accept that the husband made any financial contribution in the form of monies lent to him by his family. Overall, I consider that the husband contributed less in total than the wife from his income.
I accept that in about 2000, the wife contributed for the benefit of the family her inheritance from her mother. The wife had only one overseas trip during the marriage.
I consider that the wife made a very substantial contribution to the well-being of the family in the form of a homemaker role and caring for the children. I consider that the husband contributed virtually nothing to the running of the household and very little to the care of the children, although I accept that he did take them occasionally on fishing and other trips. The husband’s minimal contribution to the family may have been a result of his injury or it may have been for cultural reasons. However, the fact remains that the husband did almost nothing around the house and did very little child care.
Contributions post separation
I accept that the wife paid for a fence worth $495 after separation. I do not consider that the fence has added significantly to the value of the property. The wife initially said that she had paid for the verandah after separation but later withdrew that claim and conceded that it was built before the separation. The value of the painting was not quantified. I doubt that it would have appreciably increased the value of the house. The wife also said that she had paid the outgoings on the property since separation. As the mortgage was discharged in 1997, the outgoings amounted to rates. These are more than offset by the benefit to the wife of living in the home rent-free. I do not consider that the wife has made any appreciable post-separation contributions. There was no suggestion that the husband had made any post-separation contributions.
Contribution based entitlements
All in all, I consider that the contribution based entitlements of the parties are 60% in favour of the wife and 40% in favour of the husband. This is based on the wife’s contribution to the care of the home and the children being much greater than the husband’s, and the wife contributing more financially than the husband, including the $14,000 inheritance in about 2000. In relation to the financial contributions, the husband retained much of his pension and other earnings while the wife contributed virtually all of hers, and based on the fact that the husband’s $20,000 lump sum contribution in 1985 was eroded, so to speak, over the ensuing 20 years.
Step 3
The next step requires a consideration of what are sometimes described as the future factors. I note that the wife is 60 years old and the husband is 51 years old. Neither of them is in perfect health. It was conceded that the wife is unable to work. However, she is in receipt of a disability pension of just over $400 per fortnight. The husband admits to earning $340 per fortnight as a taxi driver. He says that he is unable to work more than that. I do not consider that there is any evidence before the court which would justify a finding that the husband could earn more than $340 per fortnight. The only known property of the parties is that described above as part of the property pool. While the husband has some relatives who appear to have some money, those relatives cannot properly be described as providing a financial resource for the husband. The parties have no known financial resources other than those described above.
The wife has the responsibility of supporting one child under 18 years of age. He is 17 years and four months old. The wife claimed that the husband should contribute to the cost of C’s orthodontic treatment. It will not be completed until 2009. There was nothing to suggest that the work is to be undertaken for other than cosmetic reasons. The husband said that he would take C to the dental hospital and pay any extra. I take this to mean that he is unwilling to share in the cost. I do not consider that he should be required to pay for C’s orthodontic treatment. It seems to me that it is a luxury that the husband can ill afford. I do not propose to require the husband to contribute to the orthodontic treatment by way of a future contributions adjustment or otherwise.
As to the school fees, I accept that C is in the middle of year 12. It is obviously a virtual necessity that he remains at that school for the rest of the year. The father apparently acquiesced in the children attending Catholic schools at a cost to the parties. The outstanding school fees are a debt of the parties that is to be deducted from the asset pool. The balance of school fees for the remainder of C’s schooling will amount to a maximum of about $1,820. It may even be less if payments are made a term in advance, or if a deposit of one term’s fees was paid when C was originally enrolled. In any event, the husband argues that school fees are properly a matter to be dealt with under the child support regime. That is correct, although there is also an express statutory authority in property proceedings to adjust proprietary interests in the light of the commitments of a party in relation to a child who there is a duty to maintain. Nevertheless, in view of the small amount in issue, I do not consider it appropriate to make any property adjustment based on the prospective school fees for C.
The other children are grown up and independent, although two still live at home with the wife. They have part-time jobs. Neither party has any significant commitments. The mortgage over the matrimonial property has been discharged. The husband is living with relatives. There is no suggestion that either party has a responsibility to support any other person. The wife is entitled to a disability pension. I accept that the husband has no entitlement to a pension. Neither party has an entitlement to a superannuation pension.
The parties have always had a modest standard of living. There is no suggestion of either party undertaking a course of study and no suggestion that either party has creditors. I consider that the wife has contributed somewhat more to the assets of the parties than the husband, at least in recent years. The marriage lasted about 25 years. I do not consider that the marriage reduced either party’s capacity for gainful employment, except to the extent that a child of the marriage was disabled and needed a parent to give her full time care. Neither party is cohabiting with another person in the sense of having a new partner. The relatives with whom each party lives do not appear to have substantial earnings or assets. The husband is assessed to pay the minimum amount of child support for the youngest child and has arrears of about $150. The proposed property order would result in the wife having a substantial debt and the husband having a corresponding lump sum. There are no other known orders under the Act.
I do not consider that the factors to be considered under step 3 suggest that there should be any change to the contribution based entitlements of the parties. I consider that both parties are in a similar position. They are both on low incomes and have health problems, though the wife is a little older and appears to have a slightly higher income.
Step 4
The fourth step is to consider what order is just and equitable in the light of the findings and considerations set out above. In my view, it is just and equitable that there is an adjustment such that the wife receives 60% of the property pool. She should be given the opportunity to buy out her husband within 60 days. If she does not do so, the matrimonial home should be sold. The husband should be permitted to retain the Ford, with the appropriate adjustment from his share of the pool.
The value of the asset pool is $397,621.34. Forty percent of that is $159,048.53. The husband’s 1996 EL Ford Fairmont is valued at $6,000. Forty percent of that is $2,400. $159,048.53 minus $2,400 is $156,648.53. This is the amount that should be paid by the wife to the husband in the event she is able to buy the husband out.
As to the burial plot, I consider that it should be transferred by the husband to the wife without payment. The wife bought it when the husband was overseas. It was she who decided to buy a two person burial plot. I accept the wife’s evidence that the husband had previously said that he wished to be buried in Lebanon. Orders will be made accordingly.
The spousal maintenance application
Section 72(1) of the Family Law Act 1975 (“the Act”) provides that:
(1)A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
The matters to referred to in sub-s.75(2) of the Act are set out above and were considered above in the context of the property application. I rely on that consideration for the purposes of the spousal maintenance application as well.
By virtue of s.75(3) of the Act, the court is required to disregard the wife’s entitlement to Centrelink benefits. The court is required under s.74(1) of the Act to take into account the specified matters and then make such order as it thinks proper.
I accept that the wife is unable to work, having been out of the workforce for about 25 years and having a sufficient physical incapacity to entitle her to a disability pension. That pension and other government allowances must be disregarded for present purposes. Her only other means of support are contributions from her children. These were unspecified but I accept that they would be quite small. In the circumstances, I accept that the wife has a need for spousal maintenance.
However, I am not satisfied that the husband has a capacity to pay any spousal maintenance. He is living in modest circumstances with his mother and brother. He drives a 10 year old car. Upon settlement, he will presumably wish to buy a place to live. While I accept that the husband is earning an income from driving taxis, I am not satisfied that his income is very much more than $170 per week. Records from his employer were not subpoenaed. In the circumstances, I am unable to be satisfied that the husband has any capacity to pay spousal maintenance. The application for spousal maintenance will be dismissed.
I certify that the preceding ninety-one (91) paragraphs are a true copy of the reasons for judgment of Riley FM
Associate: Melissa Gangemi
Date: 28 June 2007
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