Essex and Essex

[2017] FCCA 415

FEDERAL CIRCUIT COURT OF AUSTRALIA

ESSEX & ESSEX [2017] FCCA 415

Catchwords:
FAMILY LAW – Alteration of property interests – assessing contribution and future needs.

Legislation:

Family Law Act 1975, ss.75(2), 79

Cases cited:

Bevan & Bevan [2013] FamCAFC 116

Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA 395
Pierce v Pierce (1998) FLC 92-844
Stanford & Stanford [2012] HCA 52
Williams & Williams [2007] FamCA 313

Applicant: MR ESSEX

Respondent: MS ESSEX

File Number: HBC 293 of 2014

Judgment of: Judge Altobelli

Hearing dates: 19-21 April 2016

Date of Last Submission: 27 February 2017

Delivered at: Hobart

Delivered on: 9 March 2017

REPRESENTATION

Counsel for the Applicant: Mr Munro

Solicitors for the Applicant: Ogilvie Jennings

Counsel for the Respondent: Ms Ryan

Solicitors for the Respondent: PWB Lawyers

ORDERS

1. That the parties forthwith do all things and sign all documents necessary to effect the sale of the property known as Property D (“the property”).

2. In order to implement Order 1 above:

   (a)The parties are to forthwith instruct the firm Tierney Law to undertake the conveyance of the property and to cause the eviction of the present tenants in the property;

   (b)The parties are to list the property for sale with such agent as the President for the time being of the Real Estate Institute of Tasmania shall appoint (“the agent”);

   (c)Once vacant possession of the property has been achieved, the parties are to instruct the agent to manage the tenanting of the property;

   (d)The listing price for the property shall be offers over $550,000 or as is otherwise agreed between the parties from time to time.

3. On settlement of the sale of the property, the proceeds of sale shall be applied in the following manner and priority:

   (a)To discharge the mortgage secured against the property in favour of the (omitted) Bank;

   (b)To pay the agent’s commission and expenses payable in respect of the sale of the property;

   (c)To pay the legal costs and disbursements of the sale to Tierney Law;

   (d)To pay outstanding municipal rates, water, land tax and any other charges outstanding with respect to the property;

   (e)To pay to the Husband 52.5 per cent of the remaining net sale proceeds, less the sum of $13,061.60;

   (f)To pay to the Wife the remaining sale proceeds.

4. That the base amount allocated to the Husband out of the superannuation interest held by the Wife in the Retirement Benefits Fund (“the fund”) member number (omitted) is $16,705.12 pursuant to s.90MT(1)(a) of the Family Law Act 1975.

5. Whenever the Trustee of the fund makes a splittable payment from the interest held by the Wife, the Trustee shall:

   (a)pay to the Husband or his legal personal representative an amount calculated in accordance with Part VI of the Family Law (Superannuation) Regulations 2001 using the base amount specified in Order 4 of these Orders; and

   (b)There shall be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for this order.

6. Order 5 of these Orders has effect from the operative time and the operative time is four (4) business days from the date this Order is served upon the Trustee of the fund.

7. That the Wife otherwise retain ownership of her Mazda (omitted) motor vehicle, her superannuation and any other property in her possession or control and be solely responsible for her HECS and Centrelink debt.

8. That the Husband otherwise retain ownership of his Toyota (omitted), his superannuation and any other property in his possession or control, and be solely responsible for his family loan.

9. That to the extent that any commission is payable to (omitted) Real Estate or Mr L with respect to the invoice number (omitted) dated 8 August 2016 ("the potential commission liability") arising from the failed sale of Property D in Tasmania ("'the property") by either or both parties up to the sum of $20,947.50, the Husband will be wholly responsible for the sum equivalent to 80 per cent of such liability and the Wife no greater than 20 per cent of such liability and the Husband will indemnify the Wife for any liability with respect to his 80 per cent of the potential commission liability.

10. That the Husband will be solely responsible for and indemnify the Wife in relation to any interest payable on the potential commission liability, in the event that with such interest the sum payable on the potential commission liability is in excess of $20,947.50.

11. That the Husband will be wholly responsible for the payment of any legal costs incurred, costs of and incidental and any costs order in defending a claim with respect to the potential commission liability brought by (omitted) Real Estate and or Mr L AND the Husband will indemnify the Wife against any responsibility for these legal fees, costs of and incidental and costs orders.

12. That following completion of the settlement of the sale of the property the following will occur:

    (a)The parties' cash entitlements under final Orders will be paid directly to the parties' respective solicitors in the first instance;

    (b)From the funds disbursed to the Wife, the sum of $4,189.50 be retained in the trust account of the Wife's solicitors for a period of six months and after six (6) months if not required  with respect to the potential commission liability will then be released to the Wife;

    (c)The sum of $16,758.00 be retained in the trust account of the Husband's solicitors and after six (6) months if not required with respect to the potential commission liability, will then be released to the Husband.

13. That the Husband will be wholly responsible for payment of the legal fees incurred in instructing Tierney Law, together with any process service fees, to have the tenants Ms J and Mr W vacate the property.

14. In the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to s.106A of the Family Law Act 1975, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.

IT IS NOTED that publication of this judgment under the pseudonym Essex & Essex is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT HOBART

HBC 293 of 2014

MR ESSEX

Applicant

And

MS ESSEX

Respondent

REASONS FOR JUDGMENT

Introduction

1. These Reasons for Judgment explain the Orders for property settlement made in this matter.

Background

1. Unless expressly indicated to the contrary, the Court finds the facts of this case to be as set out below, based on the evidence before it.

2. The Applicant Husband is 60 years old and is a (occupation omitted).  The Respondent Wife is 36 years old and is a (occupation omitted).  Their relationship commenced in late 1999 while they were living in Victoria.  They married on (omitted) 2002 in Victoria.  In September that year they relocated to Tasmania.  They have two children, X, who is nearly 13, and Y, who is 10.  The relationship ended in separation in October 2013.  The parties therefore cohabited almost 14 years.

3. On 21 April 2016, the Court made consent Orders in relation to parenting matters.  The children will live with their mother and spend limited time with their father.  On the same day, the Court also made consent Orders in relation to chattels and personal property.

4. By the time of closing submissions on 21 April, the parties had agreed on a balance sheet which is reproduced below.  The balance sheet was provisional on the day that it was tendered, in the sense that the former matrimonial home had been sold, but not settled, so the final balance sheet would depend on the net amount actually received on settlement following the usual adjustments and deduction for expenses of sale and the mortgage.  In addition, the final balance sheet would need to reflect an adjustment in relation to rentals derived from the property.  As it turns out, nearly one year later, the home has still not been sold.  The original sale fell through in controversial circumstances.

5. At the time of cohabitation, the Wife had minimal assets.  The Husband owned a property in Victoria, which will be known as the Property C property.  The Husband had been divorced from his previous Wife for about five years at the time of cohabitation, and it was the asset that he brought out of that relationship.  The Husband says that the property in question was subject to a mortgage of about $20,000 at that time.  The Court accepts this evidence.

6. The Property C property was sold in 2002, probably after the parties married.  The Husband deposed that he received about $85,000 from the net sale proceeds.  Whilst he could not produce documents to substantiate this, there is no reason to doubt his evidence in this regard.  The Court accepts that his knowledge of his own financial affairs at the time was more reliable than that of the Wife’s.  The sale proceeds of the Property C property was applied towards the purchase of six acres of land in Property S in Tasmania.  The purchase price was $44,000.  The sum of $10,000 was spent excavating the site, installing a septic tank, and preparing plans to build.  Also using the sale proceeds of the Property C property, a six-berth caravan was purchased and placed on the land at Property S.  An annexe was added.  The Husband and Wife moved in.  He brought with him the furniture that he had at the time.  No doubt, the Wife did likewise.  A shed with toilet and shower was constructed.  The source of funds for this was the sale proceeds of the Property C property.  When the Husband was not working on the property, he was working as a (occupation omitted).  The Wife was studying and working part time.

7. X was born in 2003.  Y was born in 2005.  The family was living on the Property S property at the time.

8. Some time at or after Y’s birth, the Property S property was sold for about $122,500.  Those funds were used to purchase the property at Property D.  A self-contained pickers hut was located on the property.  The parties moved their caravan onto the property, and eventually moved into the pickers hut after some substantial work was effected to make it habitable.

9. Whilst they were working on the Property D property, the parties also purchased at property at Property W and renovated it.  The deposit was provided from the remaining sale proceeds of the Property S property.  A financial institution must have provided the balance.  The property was renovated.  The Husband did most of the renovations, but this did not exclude the Wife assisting from time to time, but of course they had by this time, two young children.  The property of Property W was then sold at a substantial profit in 2006.  The Husband says that the surplus funds amounted to $80,000.  The Court accepts his evidence in this regard.  The funds were used towards the construction of the home at Property D.

10. The construction of the home on the Property D property probably commenced in late 2009.  The Court finds the Husband did most of the work.  The Court does not accept his contention that “I built about 98 per cent of that house and from time to time, Ms Essex assisted me.”  It is not possible to state with precision precisely what percentage of the building work was undertaken by the Wife.  It was more than the Husband asserts.  It was less than the Wife asserts.  Her contribution to the Property D property is, in any event, measured by reference to multiple factors, only one of which is her direct physical contribution to its construction.

11. The cost of constructing the Property D home was substantial.  They borrowed from the (omitted) Bank in order to do so.  The bank took a mortgage over the property.  The income of the Husband and the Wife during this period was minimal.  In all likelihood, their living expenses and outgoings exceeded their combined income.  The mortgage fell into arrears.  Credit cards were used to subsidise living expenses.  The parties had a young family, and were engaged in a significant construction task which, unsurprisingly, drained their financial resources.  Whilst the Husband was primarily focussed on construction work, the Wife was working part-time, was primarily responsible for the care of the young children, and was assisting with the home as and when she could.  The Husband was also working as a (occupation omitted) at times to generate cash for living expenses and construction costs.  By about 2011, the Wife’s income began to exceed that of the Husband and, indeed, in the 2013 financial year immediately prior to separation in October 2013, the Wife’s income significantly outstripped that of the Husband. 

12. When the Wife’s income started to increase in the later years of the marriage, the Husband’s role as homemaker and parent gradually increased.  The Husband probably overstates his role as homemaker and parent during this period.  The Wife understates what he did in this period. 

13. The parties’ separation was a very unhappy and indeed tumultuous one.  Eventually the Wife and children left the former matrimonial home.  For whatever reason the mortgage fell into arrears and the house came close to being repossessed by the bank.  The Husband managed to borrow funds from family members in order to clear the arrears, thus allowing for a more orderly sale of the property.  The sale of the property did not, in fact, go through.  Both parties were clearly disappointed.  Each blamed the other for this.  It is a sterile, futile exercise to rehash these concerns, and ultimately nothing turns on it.  The property was rented out.  Orders were made by consent in relation to meeting potential losses arising from the failed sale, and accounting for the receipt and application of rentals for the purposes of paying the mortgage and outgoings. 

The agreed balance sheet

1. The balance sheet is as follows:

Balance Sheet Note: This document can be sent by electronic means between the parties prior to it being filed at court.	Article I.	Name
	File No
	Date	Time
	Before

ASSETS
Ownership		Description				Wife/de facto partner's value	Husband/de facto partner's value
1	J	Property D				525,000	525,000
2	H	Toyota (omitted)				4,000	4,000
3	W	Mazda (omitted)				4,000	4,000
Total		$          533,000	$         533,000

ADDBACKS
Ownership		Description				Wife/de facto partner's value	Husband/de facto partner's value
4
Total		$	$

LIABILITIES
Ownership		Description				Wife/de facto partner's value	Husband/de facto partner's value
5	J	Mortgage to (omitted) Bank				293,000	293,000
6	W	HECS debt				23,784	23,784
7	H	Family loan				5,000	5,000
8	W	Centrelink				6,000	6,000
Total		$          327,784	$         327,784

SUPERANNUATION
Member		Name of Fund			Type of Interest		Wife/de facto partner's value	Husband/de facto partner's value
9	H	Superannuation fund			Accumulation interest		2,397	2,397
10	W	Retirement Benefits Fund			Accumulation interest		33,988	33,988
Total		$            36,385	$           36,385

FINANCIAL RESOURCES
Ownership		Description				Wife/de facto partner's value	Husband/de facto partner's value
11
12
13
14
Total		$                  0	$                 0

NETT TOTAL NON-SUPERANNUATION ASSETS	$          205,216	$         205,216
NETT TOTAL ASSETS	$          241,601	$         241,601

The parties’ contentions

1. Mr Munro appeared as Counsel for the Husband. In closing submissions he contended that there should be a final adjustment in the Husband’s favour as to 60 per cent, which reflected a s.75(2) adjustment in the Wife’s favour. He submitted that the Husband made a significantly greater contribution as compared with the Wife which might be assessed in the range of 65-75 per cent. He submitted that on a close analysis of the relevant s.75(2) factors, there would be a 5 per cent adjustment in favour of the Wife, thus leading to a net result of 60:40 in favour of the Husband, on a worst case scenario.

2. Ms Ryan appeared as Counsel for the Wife. She submitted that, on a careful analysis of the different types of contribution that each of the Husband and the Wife made, contribution would be assessed as be equal, i.e. 50:50. She submitted that the s.75(2) factors operated in favour of the Wife in a range of between 5-10 per cent. Thus, she submitted that the range of outcomes for the Wife was 55-60 per cent.

The evidence

1. In the Husband’s case he relied on his Affidavit of 8 April 2016 and Financial Statement of the same date.

2. In the Wife’s case, her Financial Statement was sworn 11 April, and she relied on Affidavits filed 27 October 2015 and 30 April 2015.

3. Both parties’ Counsels provided very helpful case outline documents.

4. A number of documents were tendered in evidence, and if relevant they will be referred to below.

5. The Husband, the Wife and the Wife’s partner, Mr M, all gave oral evidence and were cross-examined.  Indeed, the Wife relied on her partner’s Affidavit filed 18 April 2016.

6. No issues of credit arise in this case.  All the witnesses gave the relevant evidence in a matter-of-fact and clear manner.  To the extent that the Husband and the Wife each sought to present a perspective of the evidence that maximised their contribution, but minimised the other’s contribution, this simply reflects human nature in the context of adversarial litigation.  It does not reflect on their credit.  The Court generally preferred the Husband’s evidence in relation to financial matters, but the Wife’s evidence in relation to non-financial matters. 

The applicable law

1. This is an application under s.79 of the Family Law Act 1975 which relevantly provides:

   Alteration of property interests

   (1)  In property settlement proceedings, the court may make such order as it considers appropriate:

   (a)  in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or

   (b)  in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage--altering the interests of the bankruptcy trustee in the vested bankruptcy property;

   including:

   (c)  an order for a settlement of property in substitution for any interest in the property; and

   (d)  an order requiring:

   (i)  either or both of the parties to the marriage; or

   (ii)  the relevant bankruptcy trustee (if any);

   to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.

   (2)    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.

   (4)    In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:

   (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.

1. Section 79(4) incorporates the provisions contained in s.75(2) of the Act, which states:

   (2)  The matters to be so taken into account are:

   (a)  the age and state of health of each of the parties; and

   (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; and

   (c)  whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and

   (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; and

   (e)  the responsibilities of either party to support any other person; and

   (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; and

   (g)  where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and

   (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; and

   (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; and

   (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; and

   (l)  the need to protect a party who wishes to continue that party's role as a parent; and

   (m)  if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and

   (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; and

   (naa)  the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:

   (i)  a party to the marriage; or

   (ii)  a person who is a party to a de facto relationship with a party to the marriage; or

   (iii)  the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or

   (iv)  vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and

   (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 to the marriage; and

   (q)  the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.

2. In Bevan & Bevan [2013] FamCAFC 116, the Full Court of the Family Court of Australia considered the High Court’s decision in Stanford & Stanford [2012] HCA 52, which provided guidance on how s.79 was to be interpreted and implemented. Bevan endorsed the continuing application of the four-step approach articulated by the Full Court in Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA 395, but on the basis that it is a shorthand distillation of the words of s.79, as opposed to being a statutory edict. The four steps articulated in Hickey at paragraph 39 are:

   a)Identify and value the property, liabilities and financial resources of the parties; and

   b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and

   c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and

   d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.

3. The decisions in Stanford and Bevan also emphasise the importance of making findings that any order is just and equitable for the purposes of s.79(2), independent of the s.79(4) process. In most cases, such as the present one, it makes no difference to the outcome of the alteration of property interests exercise. Even if the just and equitable consideration were treated as a threshold issue in this case the parties have, by their actions (separation, and re-ordering of their financial lives since then), and claims (divergent claims about their property under s.79 of the Act), indicated that they themselves consider it just and equitable that some order be made under s.79 adjusting their property interests as presently held. It is clearly just and equitable in this case to make an order.

4. Both decisions also emphasise the importance of identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.  This is not inconsistent with step one in Hickey. 

5. Another issue in this case is how, precisely, I should weigh and assess the initial contribution made by the parties. In this regard, I need to consider the decision of the Full Court in Pierce v Pierce (1998) FLC 92-844. A useful recent decision of the Full Court examines its earlier decision in Pierce v Pierce together with a later case. In Williams & Williams [2007] FamCA 313 the Full Court states as follows at paragraphs 26, 27, 28, 29 and 32:

   26. We think there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution between the parties Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing of the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in doing so it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.

   27. In Pierce v Pierce when speaking of the relevance to be paid to initial contributions the Full Court (Ellis, Baker and O’Ryan JJ) referred to Fogarty J in Money v Money (1994) FLC 92-485 at 81,054; (1994) 17 Fam LR 814 at 816:

   …respective contributions of the parties over a long period of marriage “offset” the significance which might otherwise be attached to a greater initial contribution by one party…ultimately, when it comes to the trial such a contribution is one of a number of factors to be considered.  The longer the marriage the more likely it is that there will be latter factors of significance and in the ultimate the exercise is to weigh the original contribution with all other, later, factors and those later factors, whether equal or not, may in the circumstances of the individual case reduce the significance of the original contribution.

   28. The Full Court (Ellis, Baker and O’Ryan JJ) then said at [28]:

   In our opinion it is … a question of what weight is to be attached, in all the circumstances, to the initial contributions.  It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife.  In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.

   29. Pierce v Pierce was a case in which the husband brought in $200,000 cash into the relationship.  He applied that money towards the purchase of a matrimonial home.  He was employed throughout the marriage and supported the wife who, whilst in some paid employment primarily attended to domestic tasks and taking care of the children.  The Full Court assessed the parties’ respective contributions to a pool of $320,000 as 70 per cent in favour of the husband and 30 per cent in favour of the wife at the end of a 10 year relationship.

   32. In Hunt v Zuryn (2005) FLC 93-226; (2005) 34 Fam LR 169 the Full Court (Kay, May and Boland JJ) allowed an appeal in a property case where a pool of assets of $1.12million had been assessed for contribution purposes as 75 per cent in favour of the husband and 25 per cent in favour of the wife.  The Court in allowing the appeal indicated that an assessment of 75:25 fell outside the realms of an acceptable range saying at 79,730; 170:

   Such an assessment ought adequately recognise that much of the parties’ wealth can be attributed to the capital growth in the assets introduced by the husband at the commencement of the marriage but at the same time bringing into consideration a myriad of other contributions each made in the course of their relationship.

6. Accordingly, I must not only identify the contributions of each party, but also assess the weight to be attributed to these contributions having regard to many factors including what has occurred afterwards.

The re-opening of the evidence

1. Very shortly after judgment was reserved on 21 April 2016, the Court was informed that the settlement of the sale of the former matrimonial home had fallen through in controversial circumstances.  The Court was asked to postpone delivering Reasons for Judgment and making Orders.

2. On 17 August 2016, the Wife filed an Application in a Case formally seeking leave to re-open the evidence.  Without going into detail (which is unnecessary), on 27 February 2017, the following Orders were made by consent:

   1.     THAT the wife’s application in a case is hereby dismissed.

   2.     THAT to the extent that any commission is payable to (omitted) or Mr L with respect to the invoice number (omitted) dated 8 August 2016 ("the potential commission liability") arising from the failed sale of Property D, in Tasmania ("'the property") by either or both parties up to the sum of $20,947.50, the husband will be wholly responsible for the sum equivalent to 80 per cent of such liability and the wife no greater than 20% of such liability and the Husband will indemnify the wife for any liability with respect to his 80% of the potential commission liability.

   3.     THAT the husband will be solely responsible for and indemnify the wife in relation to any interest payable on the potential commission liability, in the event that with such interest  the  sum  payable  on  the  potential  commission  liability  is in  excess  of $20,947.50.

   4.     THAT the husband will be wholly responsible for the payment of any legal costs incurred, costs of and incidental and any costs order in defending a claim with respect to the potential commission liability brought by (omitted) Real Estate and or Mr L AND the husband will indemnify the wife against any responsibility for these legal fees, costs of and incidental and costs orders.

   5.     THAT following completion of the settlement of the sale of the property the following will occur:

   (a)     The parties' cash entitlements under final Orders will be paid directly to the parties' respective solicitors in the first instance;

   (b)     From the funds disbursed to the wife, the sum of $4,189.50 be retained in the trust account of the wife's solicitors for a period of six months and after six (6) months if not required  with respect to the potential  commission  liability will then be released to the wife;

   (c) The sum of $16,758.00 be retained in the trust account of the husband's solicitors and after six (6) months if not required with respect to the potential commission liability, will then be released to the husband.

   6.     THAT the husband will be wholly responsible for payment of the legal fees incurred in instructing Tierney Law, together with any process service fees, to have the tenants Ms J and Mr W vacate the property.

3. These Orders will, of course, need to be reflected in the final Orders the Court makes.

Assessing contribution

1. The submissions made by both Counsel indicated that a global approach to the assessment of contribution was appropriate.  The Court agrees. 

2. The parties agreed that once the Court had made a finding about contribution and future needs, that percentage would be applied to the superannuation assets, and the non-superannuation assets, as two distinct pools.  In other words, the superannuation pool was to be adjusted by way of a splitting order, inevitably in favour of the Husband, given the disparity in superannuation holdings, rather than being an adjustment across both pools.  Again, that is both sensible, and appropriate.

3. What becomes apparent from an examination of the findings made by the Court as set out earlier in these reasons is that both the Husband and the Wife made different types of contribution at different times.  Whereas the Wife’s case is that disparate and diverse contributions should ultimately be assessed, at the end of a relationship lasting almost 14 years, in equality, the Husband’s case is that his financial contribution at the commencement of the relationship was so much greater, that it would be unjust and inequitable for him to be simply assessed as having made an equal contribution overall.

4. The reality of this case is that after 14 years of hard work (in many different ways, and at different times) the pool of assets available to distribution is not a significant one.  It is, of course, very important for the parties.  It reflects years of hard work.  It is all that they will have with which to start again.  The fact that it is a small pool, however, means that the impact of even small adjustments is magnified.  Moreover, a particular feature of this case is to recognise the value to the parties of what, in effect, the Husband brought into this relationship, as compared to what they have now.  The Court has accepted that he had $85,000 from the sale of the Property C property in 2002.  This was the cornerstone on which the parties then acquired their remaining assets.  It represents a disproportionately high proportion of the current net assets available to the parties.  Its significance cannot be ignored.

5. Of course, the Court cannot ignore the diverse contributions that each of the Husband and the Wife made after the Property C property was sold, and the funds applied in the manner set out in these reasons.  The Husband’s later contributions, direct and indirect, financial and non-financial, and as homemaker and parent can neither be understated, nor overstated.  The same proposition applies to the Wife.  It must be recognised that in the early years of the relationship her contribution as homemaker and parent was substantial, and in the later years her financial contribution was also substantial.  But it could not be just and equitable to conclude that after a 14 year relationship in which the Husband introduced $85,000, which reflects a significant proportion of the current assets currently available to the parties, that his contribution should be assessed as being equal to hers.  That would be to inappropriately minimise the contribution he has made whilst attaching disproportionate weight to the contribution she has made.  The Court is well aware, and has taken into account, that financial contributions should not be weighed as being more significant than non-financial contributions, whether as homemaker and parent or otherwise.  The diversity of the contributions that each party has made throughout the course of their relationship is a feature of this case.  Even taking all of that into account, however, the fact remains that the value to the parties of the financial contribution that the Husband made at the commencement of the relationship was a very significant one.

6. In all of the circumstances, and taking into account all of the matters referred to above, an assessment of contribution in the Husband’s favour at 60 per cent is considered to be just and equitable.

Assessing future needs?

1. It is common ground between Counsel that a s.75(2) adjustment should be made in favour of the Wife. Mr Munro concedes 5 per cent and Ms Ryan submits the range is 5-10 per cent. The Court assesses the adjustment to be made in the Wife’s favour to be 7.5 per cent. Her responsibility to care for the children with what is, in effect, minimal financial support from the Husband, is probably the most significant factor. Moreover, despite the age disparity that is clearly present in this case, the Husband’s financial circumstances, as reflected for example in his Financial Statement filed 11 April 2016, as well as in the outcome of this case, suggests that he is in a significantly better financial position than she is, not just on a weekly basis, but in terms of the overall outcome of this case. In all of the circumstances, a 7.5 per cent adjustment in favour of the Wife is considered appropriate.

Conclusion

1. If contribution is assessed in favour of the Husband at 60 per cent, and s.75(2) factors in favour of the Wife at 7.5 per cent, this means the final adjustment is 52.5 per cent in favour of the Husband. Given the relatively small size of the pool of assets, this is considered as just and equitable as the circumstances of the case allow.

2. Implementing the outcome intended by these Reasons for Judgment may well be complex, given the uncertainty as to when, and for how much, the home will sell for.  There are also the adjustments agreed to by the parties in the Consent Orders made 27 February 2017.

3. The total superannuation available to the parties is:

Husband	$2,397
Wife	$33,988
TOTAL	$36,385

1. In order for the Husband to receive 52.5 per cent, or $19,102.12, there will need to be a superannuation split in his favour from the Wife’s fund in the sum of $16,705.12.

2. In relation to the non-superannuation assets, what is clear is that on settlement of the sale of the former family home, the expenses of the sale will be paid, the mortgage to the (omitted) Bank discharged, and what is left is to be divided between the parties taking into account what they each already have or owe, and then applied in accordance with their Consent Orders.

3. The Orders will reflect this.  Regrettably, the Minutes of Orders postulated by the parties at the hearing do not reflect the difficulties encountered by the parties in the last year.  The Court will do the best it can to give effect to the intentions behind such Orders, some of which are evident from Consent Orders made since the conclusion of the evidence.

4. If the value of the former family home is quarantined, the focus turns to the adjustment necessary to the parties other property and debts which consists of:

H	Toyota (omitted)	$4,000
W	Mazda (omitted)	$4,000
W	HECS debt	($23,784)
H	Family loan	($5,000)
W	Centrelink debt	($6,000)
TOTAL		($26,784)

1. The effect of these Orders is that the Husband bears 52.5 per cent of this liability, or $14,061.60.  The Husband’s net position before adjustment is $4,000 – $5,000 = ($1,000).  He would therefore need to assume a further $13,061.60 in debt, which can be adjusted out of the sale proceeds.  Conversely, the Wife’s net position before adjustment is $4,000 – ($23,784 + $6,000) = ($25,784).  She should bear 47.5 per cent of the total liability of $26,784, or $12,722.40.  The adjustment of debt in her favour in the sum of $13,061.60 achieves this desired outcome.  The simplest way to achieve this is to take $13,061.60 out of the Husband’s share of the net sale proceeds of the home.  The Orders will give effect to this.

1. The Court notes that Orders were sought in relation to personal property but no evidence was led in this regard so no Orders can be made.  Thus personal property was, quite properly, not the focus of the evidence in this case.  At least some of the personal property was covered by an interim order made 21 April 2016.

I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Judge Altobelli

Date:       9 March 2017