F and F
[2000] FMCAfam 54
•27 October 2000
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| F & F | [2000] FMCA fam 54 |
| PROPERTY ORDER – Section 78, section 79 FLA |
| Applicant: | M G F |
| Respondent: | C C F |
| File No: | CA1099 of 2000 |
| Delivered on: | 27 October 2000 |
| Delivered at: | Canberra |
| Hearing Date: | 25 October 2000 |
| Judgment of: | Brewster FM |
REPRESENTATION
| The Applicant in person |
| Counsel for the Respondent: | No appearance |
ORDERS
I declare that each party is a one half owner in law and equity of the property situated at 50 M Drive T H (“the home”).
That pursuant to Section 78(2) I order that the parties forthwith take all steps necessary to sell the home.
That the husband have the carriage of the sale.
That the proceeds of sale be paid as follows:
(a)To discharge the mortgage on the property to the Commonwealth Bank (“the mortgage”);
(b)To pay outstanding rates;
(c)To pay agent’s commission and other costs of sale;
(d)To the husband one half of the balance;
(e)To the wife one half of the balance.
That for so long as the wife continues to occupy the home she is to be responsible for the payment of the instalments due with respect to the mortgage.
For the purposes of Order 5 if the wife vacates the property in circumstances where the husband may be unaware of that fact she is to notify him forthwith when she vacates and in this respect will continue to be responsible for the mortgage instalments until such notice is given.
That if the wife fails to comply with Order 5 then an amount equal to any arrears on the mortgage referable to that non compliance shall be paid to the husband upon completion of the sale before the division of monies as per Order 4(d) and (e).
If the loan referred to in the wife’s Form 17 as a mortgage assistance loan is a loan from the Commonwealth Bank secured by the home then any amount taken by the bank in repayment of that loan from the proceeds of sale shall be paid to the husband upon completion of the sale before the division of monies as per Order 4(d) and (e).
That each party retain all chattels currently in his or her possession and as against the other be entitled to all bank and other accounts currently in his or her name.
That there be liberty to apply in relation to the implementation of these orders.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT CANBERRA |
CA 1099 of 2000
| M G F |
Applicant
And
| C C F |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter concerns a Form 7 filed by the husband in the Family Court on 21 June 2000 in which he sought the following orders:
(1)That within thirty (30) days of the date of these Orders the husband and wife do all such acts and sign all such documents and pay such monies as are necessary to offer the for sale of the property situated at and known as 50 H M Drive, T H in the state of New South Wales (“the property”) and by way of consequential arrangements the parties do all things necessary for the purpose of affecting a sale upon the following terms:
(a)The listing price for the property shall be as agreed between the parties and if there is no agreement, the listing price shall be as advised by a valuer nominated by the President of the Read Estate Institute of New South Wales;
(b)The property shall be listed for sale by private treaty with the Real Estate agent agreed by the parties and in default of agreement, nominated by the husband;
(c)
In the event that the property has not sold within three
(3) months from the date on which it was first offered for sale, then the husband and wife shall make all such arrangements and do all such acts and sign all such documents to procure a sale by public auction of the property. In the event that the property is not sold by auction or by private negotiations within fourteen (14) days of the auction, then the parties will arrange for further auctions to be held at eight (8) weekly intervals;
(d)That upon completion of the sale of the property, the proceeds of the property will be applied as follows:
(i)To pay all costs, commissions and expenses of the sale and pay any council and water rates and maintenance levies outstanding respect of the property;
(ii)To discharge the mortgage, and the balance (if any) to be paid to the wife, subject to paragraph (f).
This application was personally served on 29 June 2000.
The return date of the Form 3 was 7 August 2000. On that day the husband appeared through his solicitor. There was no appearance by or on behalf of the wife. The matter was set down for an undefended hearing on a date to be fixed.
On 6 September 2000 the wife, through a solicitor, filed a Response, Form 17 and an affidavit. The affidavit said that whilst she was to have filed those documents before 7 August that the previous month “I was not well and as a consequence the documents were not signed and forwarded to the Family Court in Canberra for filing by my solicitor prior to the return date.” The affidavit did not explain the nature of the illness nor why no appearance was made on her behalf on 7 August.
The matter was then set down before Faulks J on 15 September 2000. Again the husband appeared through his solicitor. Again there was no appearance by or on behalf of the wife. His Honour transferred the matter to this court. It came before me the same day and I set it down for hearing on 25 October 2000. I also made directions in relation to the filing of affidavits. It was directed that the husband file and serve any affidavits upon which he intended to rely by 13 October and that the wife do likewise by 20 October. I directed the husband’s solicitor to notify the wife’s solicitor of the orders.
On 20 October 2000 the wife filed an affidavit in support of her response. That affidavit sworn on 18 October. It was very brief, being of less than 2 pages. I will return to matters in it later in this judgment.
When the matter came before me on 25 October the husband was present with his solicitor but again there was no appearance by or on behalf of the wife. My attention was drawn to a letter from her solicitor sent to the court on 18 October. This letter enclosed a medical report from a Doctor C and went on to say:
“There will be no attendance by the respondent wife on
25 October 2000. I look forward to hearing from the Court following 25 October 2000.”
The medical certificate from Dr C was extremely sparing in the information it disclosed. It read as follows:
“This patient has an acute medical condition which precludes her from travelling to Canberra on the 25 October 2000. Many thanks for your consideration.”
It should be noted that the letter did not seek any adjournment.
The husband filed a further affidavit on 18 October. This was after the date fixed by the directions made on 15 September. The husband’s solicitor satisfied me that this had been sent by facsimile to the wife’s solicitor the following day. Had an application been made on behalf of the wife for an adjournment to respond to the matters contained in that affidavit I would have had little alternative than to grant the application. However as no application was made on behalf of the wife subsequent to the receipt of this affidavit I allowed the husband to rely on it.
I proceeded to hear the matter in the absence of the wife.
Background
The husband is 62 years of age having been born on 28 April 1938. The wife is 47 having been born on 5 March 1953. They were married on 18 April 1981. There were no children of the marriage.
Except as will be mentioned later in this judgment both parties worked throughout the marriage. It is unnecessary to recite the history of the marriage in detail. Suffice to say that in 1993 they moved from Canberra to the South Coast. At about this time the husband received a payment of $18,406.00 as a termination payment from his employer in Canberra. At about the same time they purchased a home at 50 H M Drive T H. None of the termination monies were used to fund the purchase although an amount of just under $5,000.00 of these monies was used on improvements to the home. The home was bought with the assistance of a mortgage loan from the Commonwealth Bank. The amount the parties applied towards the purchase, or indeed the purchase price, does not appear to be in evidence.
In September 1994 the wife was dismissed from her employment with the E P Nursing Home. The reason for this was that she had misappropriated some $17,000.00 from her employer. She was subsequently charged in relation to this. Following a trial in the Local Court she was convicted.
The husband gave evidence that the parties maintained separate bank accounts during the marriage, or at least during this period. He says that from her earnings the wife bought the groceries, her clothes and occasionally clothes for him and bought petrol for the car she drove. He says that his income was used to pay the mortgage, rates and other outgoings on the home, to pay his petrol and registration and other costs of the parties’ 2 motor vehicles and the bulk of his clothes. He says that he does not know what the wife did with the money she took but says that it was not used for the benefit of the family.
The husband says that following the wife’s dismissal from her employment and the laying of charges he paid about $10,000.00 in legal fees on her behalf.
The parties separated in May 1996 when the husband left the home. The wife has resided there since.
The husband in his first affidavit complained that the wife had not kept up the mortgage instalments on the home. However at the present it appears that the arrears are not extensive and there is no absolute rule that a party occupying the home should be responsible for paying any mortgage (Lalor (1990) FLC 92-164) For this and other reasons that will become apparent I do not propose to take this into account.
At separation the property of the parties comprised the home, a motor vehicle retained by the wife which she valued at about $5,000.00, a motor vehicle taken by the husband which the wife values at about $1,200.00, a boat left at the home which was bought by the husband at least 2 years earlier for $2,300.00 and furniture and effects of unknown value. The husband took with him some of the furniture and effects.
The husband also had savings of about $17,000.00 the bulk of which represented his termination payment.
In addition the wife had a superannuation policy which she later cashed in for $5,000.00.
After separation the wife sold the boat for $1,300.00. The husband claims this was at an undervalue. I do not need to make a finding as to this.
The $17,000.00 no longer exists. The husband says he used this in living expenses whilst he was unemployed following separation.
The husband is now employed as a bus driver. He earns a little under $58,000.00 per annum from this employment. He has acquired a small amount of superannuation in this position. He will have to retire by April 2003. He has to pass an annual medical test to retain this job but there is no evidence that he is at any particular risk in this respect. Nevertheless at his age the possibility of failing such a test cannot be ignored.
He owns a mobile home which he values at $15,000.00 and a car which he values at $12,000.00. At the date he filed his Form 17 he had savings of $1,000.00. He has a car loan of $8,000.00 and what is called a private loan, the purposes of which and the circumstances of which are not in evidence, of $8,000.00.
The wife in her Form 17 says that her only income is a pension. She has a car she values at $5,000.00. She has a debt that she describes as “mortgage assistance” of $7,654.00. What this relates to is unknown.
The wife does not give any specific evidence as to why she is not working although one can infer that she would claim it is due to poor health. She refers to ill heath in her affidavit and says she suffers from “severe depression.” No medical evidence has been furnished on her behalf.
The husband says that after she was dismissed from her employment in 1994 the wife established 2 small businesses, one called “P P” and the other a stained glass business. As she could not be cross examined about these their present status is unknown.
The home is valued at between $80,000.00 and $85,000.00. The mortgage stands at a little over $65,000.00. The wife in her Form
17 says that an amount of $1,500.00 is owing for rates.
The law
The Family Law Act contains 2 sections in relation to property division. The first is Section 78 which reads
“78(1) In proceedings between the parties to a marriage with respect to existing title or rights in respect of property, the court may declare the title or rights, if any, that the party has in respect of the property.
78(2)Where a court makes a declaration under sub-section (1), it may make consequential orders to give effect to the declaration, including orders as to sale or partition and interim or permanent orders as to possession.”
It is to be noted that Section 78 simply allows the court to decide what the existing legal and beneficial interests of each party is in property and to make orders consequential on this. It does not permit the court to effect any change in those interests. This power is given to the court by Section 79. In summary Section 79 permits a court to alter the existing interests the parties may have in property. Subsection 79(4) sets out the matters the court is to take into account in making any such alteration. Subsection 79(2) provides that the court shall not make an order altering interests in property unless it is satisfied that, in all the circumstances, it is just and equitable to do so.
Put simply the section for the purposes of this case requires the court to take account of 2 things. The first is contributions made by the parties to property or the welfare of the family. The second requires a consideration of what are sometimes called (not always accurately) the “needs factors” set out in Section 75(2).
Applying the law to the facts
There is no evidence that contributions overall during the marriage were other than equal. The events surrounding the wife’s criminal conviction might be looked at under the heading of contributions but instead I will deal with it under Section 75(2)(o).
In her affidavit the wife claimed that during the marriage she was the victim of violence at the hands of the husband. However apart from one incident no particulars are given and no attempt was made to bring the case within the principles set out in Kennon (1997) FLC 92-757. In any event in the absence of the opportunity to test her evidence I can have no regard to this.
Post separation the wife has maintained the home and paid mortgage instalments and rates but as she has had the benefit of occupying it I do propose to take this into account as a post separation contribution.
Section 75(2) factors are difficult to evaluate. I make the following comments:
b)The husband is earning a significant salary. However he is significantly older that the wife and will have to retire in less than 3 years. He will then be reliant on a pension;
c)The wife is apparently not in receipt of any income except social security. However I am unable to conclude that this is for medical reasons as her affidavit implies. She could not be cross examined and she produced no medical reports to indicate firstly that she is unable to work for medical reasons and secondly for how long this might be expected to continue. She is younger than the husband and it may be that her long term prospects are better than his.
In all the circumstances I do not believe it would be just and equitable to adjust the interests of the parties in the home by reason of the matters referred to in Section 75(2).
The issue arises as to the $17,000.00 taken by the husband at separation. This is described as a redundancy payment. It related to employment confined within the period of the marriage. I will not treat it differently to other earnings of the parties and do not consider that a contribution based adjustment should be made in favour of the husband with respect to it. See in this respect Burke (1993) FLC 92-356.
Normally I would be required to notionally add this money to the pool of divisible property (Townsend (1995) FLC 92-569) However I do not propose to do so for the following reasons:
a)The fact that in the order of $10,000.00 was spent on legal fees arising out of the wife’s dishonesty should in my opinion be taken into account under Section 75(2)(o). Had the husband benefited from the stolen money it might be otherwise but I accept his evidence in this respect;
b)The wife cashed in her superannuation policy receiving $5,000.00;
c)The wife sold the boat and kept the proceeds.
The amounts set out above are approximately equal to the monies taken by the husband.
Conclusion
As indicated above Section 79(2) states that the court should only make an order altering the interests of parties in property if it is satisfied that in all the circumstances it is just and equitable to do so. For the reasons indicated above I am not so satisfied.
The parties are joint proprietors of the home. There is nothing to indicate that their beneficial interests in the home differ from their legal interests. I therefor propose to make a declaration under Section 78 that the parties’ interests in the home are equal and to make ancillary orders for sale to give effect to this declaration.
The husband’s application sought the return of certain chattels. No evidence was adduced in support of this part of the application and I do not propose to make any order other than that each party retain what they presently have.
The issue arises as to the arrears of rates and mortgage instalments. Whilst my decision in this respect is somewhat arbitrary, having regard to the wife’s apparent financial position I will not make any allowance in the husband’s favour by reason of her failure to keep the rates and mortgage up to date. However I believe that from the date of these orders and for so long as the wife continues to occupy the home she should be responsible for the mortgage instalments and I propose to make orders to this effect.
Orders
I propose to make the following orders:
(1)I declare that each party is a one half owner in law and equity of the property situated at 50 M drive T H (“the home”).
(2)That pursuant to Section 78(2) I order that the parties forthwith take all steps necessary to sell the home.
(3)That the husband have the carriage of the sale.
(4)That the proceeds of sale be paid as follows:
(a)To discharge the mortgage on the property to the Commonwealth Bank (“the mortgage”);
(b)To pay outstanding rates;
(c)To pay agent’s commission and other costs of sale;
(d)To the husband one half of the balance;
(e)To the wife one half of the balance.
(5)That for so long as the wife continues to occupy the home she is to be responsible for the payment of the instalments due with respect to the mortgage.
(6)For the purposes of Order 5 if the wife vacates the property in circumstances where the husband may be unaware of that fact she is to notify him forthwith when she vacates and in this respect will continue to be responsible for the mortgage instalments until such notice is given.
(7)That if the wife fails to comply with Order 5 then an amount equal to any arrears on the mortgage referable to that non compliance shall be paid to the husband upon completion of the sale before the division of monies as per Order 4(d) and (e).
(8)If the loan referred to in the wife’s Form 17 as a mortgage assistance loan is a loan from the Commonwealth Bank secured by the home then any amount taken by the bank in repayment of that loan from the proceeds of sale shall be paid to the husband upon completion of the sale before the division of monies as per Order 4(d) and (e).
(9)That each party retain all chattels currently in his or her possession and as against the other be entitled to all bank and other accounts currently in his or her name.
(10)That there be liberty to apply in relation to the implementation of these orders.
I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of Brewster FM
Associate:
Date:
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