F & F
[2005] FMCAfam 403
•25 August 2005
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| F & F | [2005] FMCAfam 403 |
| FAMILY LAW – Property – marriage of approximately ten years – two children aged ten and eleven – assessment of initial contributions including husband’s compensation for injuries sustained in motor vehicle accident prior to marriage – assessment of s.75(2) factors – husband significantly disabled and low-income earner – wife tertiary qualified and in secure employment – wife has principle responsibility for care of children – just and equitable. |
| Family Law Act 1975, ss.75(2), 79 |
| Lee Steere v Lee Steere (1998) FLC 91-626 Ferraro v Ferraro (1993) FLC 92-335 Clauson v Clauson (1995) FLC 92-595 Pierce & Pierce (1999) FLC92-844 Russell v Russell (1999) FamCA 187 Townsend and Townsend (1995) FLC 92-569 Norbis v Norbis (1986) FLC 91-712 McMahon & McMahon (1995) FLC 92-606 Quaresimini & Quaresimini (1999) Fam CA 1314 Mallet v Mallet (1984) 156CLR 605 Danielian & Danielian [2003] FamCA473 |
| Applicant: | M F |
| Respondent: | D R F |
| File No: | DNM103 of 2004 |
| Delivered on: | 25 August 2005 |
| Delivered at: | Darwin |
| Hearing dates: | 4 & 5 August 2005 |
| Judgment of: | Brown FM |
REPRESENTATION
| Counsel for the Applicant: | Ms A |
| Solicitors for the Applicant: | M M A |
| Counsel for the Respondent: | Mr B |
| Solicitors for the Respondent: | C B F L |
ORDERS
That within sixty days of the date of these orders the wife pay to the husband the sum of $80,000.00.
That contemporaneously with the payment referred to in order 1 hereof the husband transfer to the wife, at the wife’s expense, the whole of his right, title and interest in the property known as and situate at L A R, H D being the land contained in Certificate of Title Volume Folio and the wife transfer to the husband, at the husband’s expense, the whole of her right, title and interest in the property known as and situate at L G R, H D being the land contained in Certificate of Title Volume Folio.
In the event that the wife is unable to comply with order 1 hereof within the time specified the property known as and situate at L A R, H D be sold and the proceeds of sale be divided between the parties in accordance with these reasons for judgment and to this end the parties have liberty to re-list the matter to apply for any necessary consequential orders required to effect such sale and calculate the division of the proceeds.
That unless specified in these orders and except for the purpose of enforcing any payment of money due under these or any subsequent orders, each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of each party and superannuation standing in the name of each party as at this date.
That the application and response herein be otherwise dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT DARWIN |
DNM103 of 2004
| M F |
Applicant
And
| D R F |
Respondent
REASONS FOR JUDGMENT
Introduction
These are property proceedings. The applicant is M F. She began these proceedings on 23 March 2004. The respondent is D R F. He responded to the application on 14 May 2004. The parties began to live together in April of 1991. They married on 25 January 1992 and finally separated in early 2002.
The parties are also the parents of two children – K, who was born on 16 October 1993 and K, who was born on 16 July 1995. Recently, in fact during the final hearing of these proceedings, the parties were able to agree that the two children should continue to live predominantly with Ms F, the situation which has prevailed since the parties separated. They have not been able to agree how their marital property should be divided. Accordingly, it falls to the court to make the decision.
The legal principles to be applied and the issues in the case
The process to be followed for the division of the parties’ property is well established by law.[1] The relevant legal principles are primarily contained in ss.79 and 75(2) of the Family Law Act 1975. I am required to follow a number of specific steps.
[1] See Lee Steere v Lee Steere (1998) FLC 91-626; Ferraro v Ferraro (1993) FLC 92-335;
Firstly, I must ascertain what are the parties’ assets and liabilities at the date of trial. This issue created controversy between the parties, some of which was resolved during the course of the hearing.
·
The parties’ two most significant assets are the homes in which they each respectively live, In the wife’s case, L A R, H D “the
A R property”. In the husband’s case L, G R, H D “the G R property”. Both properties are jointly owned. Property prices in the rural areas of D have risen dramatically over the last year or so. Both parties retained expert valuers to value the properties concerned. In the wife’s case, her valuer was Mr L. In the husband’s case, it was Mr T. At the start of the proceedings, Mr L believed that the two properties were worth $445,000.00 together and Mr T believed that the two properties were worth a total of $645,000.00. This was a difference of thirty-two percent. During the course of the hearing, Mr L was prepared to increase his values to a total of $550,000.00. The husband was unable to produce Mr T for cross-examination. As a result, he agreed to Mr L’s valuations.
·The parties were able to agree in respect of the value of the motor vehicles currently in their respective possessions and the value of the plant and equipment of a business previously operated by the husband – I G.
·The parties were in paid employment during the course of their marriage. The wife is a p s t. As a result she is a member of the N T G E S S. In the past, the husband has been employed by the D C C and is a member of the L G S S. The parties agree as to the value of their respective entitlements to superannuation in these funds. In addition, in the period prior to the parties’ marriage, the wife was employed by a merchant bank in the U K. As a result, she holds some superannuation in the U K, which is held in pounds sterling. She also has a bank account in the U K, the amount of which is also agreed between the parties.
·The husband has withdrawn significant sums from his superannuation entitlements in the period since the parties separated. It is the wife’s position that these sums should be “added back”, as should other large sums which appear to have been withdrawn from Mr F’s bank account without proper explanation.
·During the course of the parties’ marriage, the wife pursued tertiary studies. Initially, she completed a Bachelor of Arts degree, specialising in fine arts. Later, she obtained a graduate diploma in primary education. As a result of her studies, she incurred a liability under the HECS scheme. After the parties separated, she paid off this debt at a discounted rate. It is her position that the debt should be included as a joint liability of the parties.
Secondly, I must ascertain the contributions, which each party has made towards those assets. Contributions fall into two broad categories. The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property. The second kind is contributions to the welfare of the family: in the words of the section, “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 home maker or parent”. It is clear from the authorities that this second kind of contribution must be given appropriate weight and not treated as a token matter or inherently less valuable or important than contributions to property.
This second step also occasions a great deal of controversy between the parties in a number of areas.
·Mr F was involved in a very serious motor vehicle accident in 1985. As a result, a portion of his leg was amputated. He pursued an action for damages and received a net award of $241,000.00 between March and September of 1991. It is his position that this award of compensation formed the basis on which the parties subsequently built their wealth, largely in the form of the A R and G R properties. As such, this is a contribution which merits “special recognition” at this part of the court’s deliberations.[2]
[2] See Pierce & Pierce (1999) FLC92-844
·The wife does not dispute that there was a disparity between the parties’ initial contributions of capital at the beginning of their relationship. However, she asserts that the disparity was not as great as the husband believes. It is Ms F’s position that she joined the workforce at an early stage and had a lucrative career both in S and the U K before she met Mr F. In particular, she worked for a merchant bank in L and was able to save significant sums of money. At the time she and Mr F began to live together, it is agreed that she owned a residential property at S A, near L. This property was sold, after the parties married, netting the wife approximately forty two thousand pounds, which was invested into the parties’ real property. In addition, Ms F asserts that she had other significant savings amounting to approximately A$50,000.00 in cash, which sum was also contributed to martial purposes. Mr F does not accept this to be the case.
·Ms F was engaged in her tertiary studies between 1991 and 1998. During this time, Mr F was employed as a car park attendant by the D C C. He was the family’s primary bread winner. It is also his position that he performed many parenting and homemaking duties during the marriage.
·Ms F concedes that she was not in paid employment between 1991 and 1998 but asserts that she performed the vast majority of the parenting and homemaking duties. It is her position that the parties’ contributions, during the marriage, both financial and non-financial, are essentially equal.
·
It is Mr F’s position that he has increased the value of both the
A R and G R properties through improvements he has made to them, both in the gardens of both properties, through the planting of trees, particularly mangoes and other works, as well as to the dwellings on the two blocks.
·Ms F began work as a primary school teacher in late 1998. This coincided with Mr F’s decision to resign from the D C C and to purchase a mowing and gardening business – I G. It is Ms F’s position that this business was not particularly successful and as a result, her financial contributions outweighed those of Mr F in this period.
·Since the parties separated, K and K have lived with Ms F. It is her position that she has received very little child support from Mr F in the period from separation until now. In such circumstances, she argues that she is entitled to some credit for this contribution.
The third step involves the assessment of the parties’ prospective needs, by reference to the factors set out in section 75(2) of the Family Law Act. Pursuant to section 75(2)(o), the Court is entitled to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”. In the main, section 75(2) deals with the prospective needs of the parties. This area too, occasions controversy between the parties.
·Mr F has wound up the business of I G. He is currently working as a casual and part-time disability and youth support worker. His salary for the last financial year was about $30,000.00. On the other hand, Ms F is a qualified p s tr. Her salary is about $60,000.00 per annum. Mr F points to this disparity in income earning capacity as a factor which calls for a further distribution of marital property in his favour at this point.
·In addition, Mr F left school at fifteen years of age. He has no formal qualifications. In addition, he suffers a significant disability because of the loss of his leg. He has a prosthesis. These are also factors, which he asserts call for some weighting in his favour.
·On the other hand, Ms F points to her responsibility to provide financially for K and K, as their residence providing parent, as being a major factor which now calls for a further distribution of property in her favour. It is her position that Mr F’s history in respect of providing financial support for the children to date has been poor. Therefore, it is only fair that she should receive a substantial proportion of the parties’ marital assets at this point.
Finally in determining what order the Court should make under section 79, the Court must be satisfied that in all the circumstances, it is just and equitable to make the relevant orders. Overall, it is the justice and equity of the actual orders that the Court must consider.[3] This is the so-called fourth step.
[3] See Russell v Russell (1999) FamCA 187
The most valuable of the parties’ assets is the A R property. It is Ms F’s wish to retain the property. It has been her and the children’s home for many years and they are well settled in it. Mr F is content to remain living in the G property. It is his position that it is run-down and needs considerable funds spent on it to preserve it from further decline. At the end of the day, he seeks a significant payment from Ms F, in exchange for the transfer of his interest in the A R property to Ms F. Ms F does not believe that this would be an appropriate outcome.
Ms F has been represented by skilled counsel throughout the proceedings. It is her position that at the end of the second stage, the court should assess the parties various contributions as being essentially equal. Thereafter, Ms F’s responsibilities for the two children call for an additional adjustment of property in her favour of twenty percent. As has already been indicated, she wishes to retain the A R property.
Mr F has acted on his own behalf during these proceedings. Although clearly an intelligent person, he is not a trained lawyer and has only a lay person’s understanding of the provisions of the Family Law Act 1975. He asserts that his initial injection of funds, in the form of his compensation payment, must lead the court to the view that his contributions during the marriage have been greater than those of the wife. He has not put a specific percentage to the court in this regard. However, it is his position that, when his likely difficulties in obtaining employment are considered and set against the wife’s obvious income earning superiority, the court will reach the conclusion that the parties’ martial property should be divided so that he receives seventy percent of it and Ms F receives the remaining thirty percent. Accordingly, the positions of the parties are diametrically opposed.
At the end of the day, it is Mr F’s position that justice and equity dictate that he should retain the G R property and receive a substantial cash sum from the wife. If this means that the A R property should be sold, so be it. Mrs F believes that she should be able to retain A R, her and the children’s home, without any payment to Mr F. She is distressed at the prospect of a sale.
At the outset, I am at pains to point out to the parties that the task I must undertake, as I have just outlined it, it is not a simple accounting or arithmetical exercise. In the jargon of the times, I cannot “crunch the numbers” to come up with an exact division of their property, which is not open to challenge or incapable of different interpretation. The task set for me, in this case, requires me to balance and compare contributions which are by their nature different. The discretion I have is a wide one.
The parties’ competing applications
At the outset of the proceedings, through her counsel, Ms F submitted a minute of the orders she seeks from the court in these proceedings. Essentially she seeks orders that would see her retain the A R property and Mr F retaining the G R property and that otherwise the parties should keep all other assets either in their possession or standing in their respective names. Specifically, she does not seek any orders which would result in a split of any of the parties’ superannuation entitlements.
Although he has acted on his own behalf in the proceedings, Mr F had some professional help in drawing his affidavit material. In his principle affidavit of evidence, he set out the orders he seeks in these proceedings.[4] These orders have been overtaken by events. In particular, they are posited on the basis that the court would accept Mr T’s valuations of the two properties concerned. As a result, Mr F, in consideration of the wife retaining A R and he retaining G R, seeks a payment from Ms F of $228,890.00. Mr F also seeks that there should be a split of $41,570.00, in his favour, out of the wife’s entitlement to superannuation in the various N T G E schemes, of which she is a member.
[4] See husband’s affidavit of evidence filed 27 July 2005 at paragraph 28
The evidence
The wife relied on the following documents filed on her behalf:
i)An affidavit of herself filed on 29 July 2005;
ii)A statement of her financial circumstances filed on 23 March 2004;
iii)An affidavit of a valuer, W J L filed 29 July 2005.
Ms F gave additional oral evidence in these proceedings and was extensively cross-examined by Mr F. Mr L also gave additional oral evidence. He conducted his initial valuation of the A R property in January 2003 and his initial valuation of the G R property in September of 2003. Later, he updated his valuations by way of a “curb side” inspection in November of 2004. As has previously been indicated, the property market in the rural areas of D between early 2003 and now has been a rising one. Mr L was prepared to increase his “curb side” valuations of November of 2004 in the course of his additional oral evidence.
The husband relied on the following affidavits of evidence:
i)An affidavit of himself filed on 27 July 2005;
ii)A statement of his financial circumstances filed 18 May 2004;
iii)An affidavit of a valuer, L T filed 3 August 2005.
Mr F was extensively cross-examined by counsel for the wife, Ms A. Given the disparity in the valuations provided by Mr L and Mr T, Ms A required Mr T for cross-examination. Mr T has been employed as a valuer in D between June of 2003 and July of 2005. He has recently left D to take up employment elsewhere. A short time before the hearing, he left D by car and travelled south. It was Mr F’s understanding that Mr T would be able to contacted so that he could give evidence to the court by way of telephone. When I became aware of the marked discrepancy between the various valuations, I directed that Mr L and Mr T should confer with one another, so that they could attempt to resolve their difference of opinion. Such a conference apparently took place and some concessions were made but no consensus was reached.
It subsequently transpired that Mr F was unable to contact Mr T, whilst he was in transit. I requested of him whether he wished to seek an adjournment of the proceedings so that Mr T could be found. Mr F told me that he did not want to seek such an adjournment and wished the proceedings to be completed as quickly as possible. In those circumstances, I advised Mr F that the court would have no option other than to accept Mr L’s evidence in respect of the value of the two properties concerned. Mr F accepted that this was so. He chose not to cross-examine Mr L, although I myself asked Mr L a number of questions.
This is not a case which turns on credit. I found both parties to be painfully honest witnesses. In particular, Mr F often gave answers to questions which were undoubtedly of no assistance to his case. He presented as a simple person, without guile. He was visibly upset at various stages of the proceedings. He was invariably courteous to the court and all involved in the case.
Ms F too seemed disturbed by the proceedings and regretful that the parties had been compelled to seek the court’s adjudication. It was a sad case. In my estimation, both the husband and wife are decent and hard working citizens, whose integrity is beyond reproach. They both attempted to tell the truth about their marriage and what occurred during it, as they each saw it from their own particular perspective. To their mutual credit, both parties acknowledged the contributions of the other.
Inevitably however, there are some significant disputes of fact between them. I do not think there is anything sinister in these differences, which relate to incidents now many years ago. Where there were differences in their respective accounts of events, it had more to do with difficulties of recollection than any suggestion of deceit. Each displayed the common human tendency to recall their own contributions with more clarity than they recalled the contributions of the other.
It is not hard for me to reach the conclusion that the marriage between the parties was one of equals, in which they each pooled their full financial resources and contributed, in different ways, to the full extent of their respective capacities. Ms F, prior to the parties’ marriage, acquired considerable financial expertise whilst she was employed in L by the well-known brokerage and merchant banking firm of G S. As a result, it seems that she attended to many of the parties’ financial affairs during their marriage. On a day to day basis, she is likely to be more aware of the parties’ general financial affairs than Mr F, who seems to be more lacsidaisical in financial matters than she.
However, the overwhelming impression I have of the parties financial affairs, in the first seven or eight years of their marriage, is that, with access to relatively large amounts of money, they did not give close regard to how they spent their funds or account for them. Significant renovations and improvements were conducted on the A R property in particular. In addition, the parties took holidays. During this period, Mr F was not earning a particularly large wage and Ms F was a student. Inevitably, the parties’ expenses outstripped Mr F’s wage and they were compelled to have to recourse to capital. At this point, many years later, neither is able to account with any particular accuracy as to how these various sums were spent. It is a common experience for such expenditure to be greater than is calculated at a later stage. As a result of these considerations, I do not discount Ms F’s assertion that she had considerable savings, other than the proceeds of the sale of the S A property, at the start of the parties’ relationship.
In these reasons for judgement, finding of fact are made on the balance of probabilities, following my observations of the witnesses concerned. In what follows, statements of fact constitute findings of fact.
Chronology and finding of fact
The husband was born in S on 3 September 1957. He has lived in A since he was two years of age. The wife was born in E on 21 June 1959. She apparently obtained secretarial skills as a young person and joined the B D S. She was posted to S. In S she was involved in a serious car accident. She suffered a severe leg injury; a dislocated shoulder; and a broken jaw. A steel rod was inserted into one of her legs. She continues to suffer health problems to this day. These include migraines and arthritis. She takes medication. The steel rod may have to be surgically removed in future. Ms F received no financial compensation for the injuries she sustained in the accident.
I accept it was impractical for her to pursue an action in regards to the accident.
Mr F left school at fifteen. Although an intelligent person, he is not academically inclined. After leaving school, he had a variety of labouring and factory jobs. He acquired skills as a scaffolder, which was work he enjoyed and which was well remunerated. In 1985, he too was involved in a serious motor vehicle accident. As a result, a portion of his leg was amputated. He now has a prothetic limb. His level of disability made it impossible for him to be a scaffolder. He cannot climb ladders. Mr F was able to pursue a claim for compensation for his very significant injuries.
The wife is a resourceful and capable person. Certainly, when she was younger, she seems to have had a love of travel. She spent five years with the d s in S. Later, she worked in N Z for about two years. She was able to save from her earnings. She used her savings prudently and in the early 1980’s purchased her first real property in the U K. She renovated this property and a subsequent property, which were both sold at a profit.
At some time in the early to mid 1980’s, Ms F was able to obtain work as a financial futures broker at G S. She obtained qualifications which enabled her to advise investors regarding the purchase of stocks and derivatives. I accept that this position was well remunerated, particularly as Ms F was entitled to a large annual bonus. Whilst she was employed at G S, Ms F purchased a third residential property situated at C R, S A. The property was subject to a mortgage.
In early 1990, Ms F became disenchanted with her employment at G S. She decided to emigrate to A and begin a new life. She arrived in P in March of 1990, after a period of time travelling in A. She bought a car in P and decided to travel to D. She had no intention of staying in the town for any lengthy period of time. Soon after her arrival in D, she met Mr F and a friendship developed between the two of them. She decided to stay on in D and obtained a six month contract in the A-G’s D.
At this time, Mr F was working as a car park attendant at the W L car park in D. His employer was the D C C. This employment was suitable for him because it did not require much walking or standing, being largely sedentary. I gather that Mr F did not find it particularly amenable because he found it boring.
After spending time together in the latter half of 1990, the parties decided to live together from Easter of 1991 onwards. They both agree that this date marks the start of their financial relationship together.
The first significant issue, which arises between the parties, is their respective financial positions at the time. Obviously, it is many years ago now and all the parties’ financial records, which relate to this time are not to hand. In particular, Ms F asserts that she had a considerable sum of money in accounts with B’s Bank and the A N Building Society. She no longer has any records from B’s Bank. Given the period of time that has elapsed since the parties met, I do not think there is anything necessarily sinister in this absence of records. It is Mr F’s position that he has no knowledge of the B’s Bank account.
There is however no doubt that in the early part of 1991, Mr F was able to settle his claim for compensation, arising out of his motor vehicle accident. The amount of the judgment was $276,699.85. A sum of $15,653.24 had to be refunded to the D of S S. On 15 March 1991, Mr F received a cheque for $225,109.40. After the issue of costs had been resolved, he received a further sum of $16,769.35. In total he received a net amount of compensation of $241,878.79. On any view, it was a significant sum of money.
The parties collaborated as to how Mr F’s compensation money was to be invested. They were interested in living together in a rural setting on the outskirts of D. As a result, the G R property was purchased in 1991 for $66,000.00. It was registered in Mr F’s sole name in recognition of the provenance of the purchase monies. Mr F also purchased a vacant block of land at D B for $34,400.00. As well as the land, Mr F purchased a Toyota ute motor vehicle for his own use for the sum of $10,000.00; a Suzuki four wheel drive motor vehicle for Ms F’s use for $11,000.00; and a tractor and other implements for use on the G R property.
The G R property was undeveloped. Significant sums were spent on improving it. Land was cleared to enable a mango orchard to be established. A roof was installed over the demountable, in which the parties lived. Firebreaks were cut around the property. Mr F believes that at least $15,000.00 of his compensation monies was spent in these improvements. This is likely to be a conservative estimate.
In addition, in spite of his disability, he did much of the work himself, with the assistance of friends. The improvements on the property were a “labour of love”. The parties both committed themselves to their rural lifestyle. I suspect that they did not keep a close account of the monies which were spent. They hoped that they would be able to operate a commercially successful mango orchard on the property. In addition, at least $5,000.00 was spent in improvements on the D B block.
Mr F also spent some of his compensation monies in having a prothetic limb fitted. This was a difficult process. It was necessary for him to travel interstate to have access to the best technicians available. This also consumed some of his funds. Nonetheless, a considerable sum of money remained. This was invested in short-term deposits and bonds. About $90,000.00 remained.
Mr F began working for the D C C in 1987. It was at this time that he joined the L G E’s S S. Ms F also had entitlements to superannuation from her period of employment with G S. On arriving in A and commencing her relationship with Mr F, she wished to take a significant career change. Ms F wished to fulfil a long held ambition to study fine arts and have a family with Mr F. As a result, with Mr F’s blessing, she enrolled in a bachelor of arts course at the N T U. Mr F was the family’s sole breadwinner.
During 1992, the parties travelled to E for a holiday, in part to realise Ms F’s assets there. The S A property was sold and there is no doubt that in August of 1992, Ms F received the sum of forty-two thousand pounds. This equated to a sum of approximately A$91,300.00.
A further sum of A$1,200.00 was sent to her in April of 1993. This sum related to a foreign exchange error made by the forwarding bank.
As has already been indicated, there exists considerable controversy between the parties as to the exact extent of other cash monies, which Ms F held at the time she came to A. She asserts that she had approximately twenty thousand pounds in B’s Bank in December of 1989 and a further three to four thousand pounds in the A N Building Society. She believes that at least A$5,000.00 of this sum was translated into a term deposit at some stage during the parties’ marriage. I accept that Ms F did indeed have some considerable savings. It is not possible for those savings to be adequately quantified at this stage. Ms F was not working during the initial years of the parties’ relationship. The parties had a trip to E, which was in part a honeymoon. Monies were expended on the G R improvements, in which Ms F was involved. The parties opened a joint bank account. Over the course of time, their various savings diminished. Mr F’s was the only income. It was not a particularly great income.
This consumption of funds was accelerated by the parties’ decision to purchase another property on the rural outskirts of D. This was the A R property. This was purchased in 1993 for $117,000.00. Its purchase coincided with the birth of K. The parties wished to live in a house rather than a demountable. The A R property was attractive because it had a house on it. However, the house was small and the parties wished to renovate it substantially.
In order to recognise Ms F’s substantial financial contributions towards the marriage, particularly in the form of the proceeds of sale of her S A property and also to acknowledge their marital status, the A R property was jointly purchased and the G R property was transferred into joint names. The parties borrowed the sum of $50,000.00, which was secured by way of a first mortgage on the A R property.
The parties also wished to plant the A R property with fruit trees. Their intention was to run both properties as an organic fruit producing business. Again, this enterprise entailed significant work. Forty mango trees were planted. Mr F irrigated the trees. He also laid paving and railway sleepers in the garden and created a water feature on the property. It was yet again a “labour of love”.
The mortgage monies were used primarily to add two bedrooms, a bathroom, a study and a carport to the A R property. A swimming pool was also installed. The cost of the pool installation was between $13,000.00 and $15,000.00. Mr F saved the parties a considerable amount of money by installing the required fence around the pool.
The parties are in some dispute as to their various activities during the initial period of the marriage. I think the evidence is clear that both were very busy and fully engaged in the marriage, performing different tasks. Mr F was closely involved in the exotic fruit tree orchards, which required much maintenance and care. He also conducted significant garden improvements and helped with the extensions at
A R. At the same time, he went to work and provided the family with their major source of recurrent income. In addition, I do not believe that it can be said that he was a passenger, so far as the care of the children was concerned. His work hours were flexible and he assisted Ms F with the care of the children from time to time, when she was involved in her university studies.
However, I am satisfied that a greater share of the responsibility for parenting first K and then K fell onto Ms F. She is clearly a caring and accomplished parent. She was also involved in some of the activities involved in renovating A R. She did some painting and laid some tiles. The exotic fruit production did not turn out to be financially viable. However, Ms F did the necessary bookwork in order to ensure the parties would gain tax recognition as primary producers. At the same time, over a number of years, Ms F pursued her fine arts degree. The degree was interrupted by her two pregnancies. She pursued the degree with Mr F’s blessing. From time to time, both children attended crèche.
After completing her fine arts degree, Ms F decided to embark on a graduate diploma in primary school teaching. She completed this diploma in October of 1998 and was able to obtain full-time employment soon after. Mr F seems to have become increasingly dissatisfied with his employment at the D C C. He had begun his position on a part-time basis but had gradually built up his hours to a full-time level.
Mr F wanted to be his own boss. As a result, he looked around for a business to purchase, which suited him because of his level of disabilities. He settled on a lawn mowing business and purchased I G for the sum of $22,000.00. The purchase was financed by way of a withdrawal from his superannuation entitlements, which had accrued whilst he was employed by the D C C. In December of 1998, Mr F had access to a cash component in respect of his superannuation in a sum of about $61,500.00. He was able to withdraw from this sum. A further sum of about $13,500.00 was preserved. In December of 1998, Mr F withdrew $30,000.00 from this superannuation.
Around about this time – the parties are not certain exactly when – the D B property was sold for $68,000.00. A large proportion of this money was used to discharge the mortgage on the A R property. The remainder was used to purchase a new motor vehicle. It also seems there were other cash expenses relating to the establishment of the I G business.
As part of the purchase price of I G, Mr F received a list of regular customers. He was fully engaged in running the business from early mornings until late afternoons from the Monday to Friday of each week. Unfortunately, the business was not as successful as he would have wished. Ms F also generously concedes that, once she had begun full-time employment as a teacher, Mr F shouldered a larger burden of responsibility for household tasks. In particular, he regularly cooked. Ms F also acknowledges that the garden at the A R property was “immaculate” due to Mr F’s labours in it.
The parties largely lived in the A R property during their marriage. Ms F and the children continue to live there. Initially, the G R property was let but the parties were unlucky with their tenants and, as a result, they decided to keep it vacant. The main focus of their respective activities seems to have been the A R property.
As a result of her tertiary studies, Ms F was left with a debt pursuant to the HECS scheme. She began to repay this debt from her salary, once she began work. After the parties separated, she paid off her HECS liability in full so that she could obtain a discount. The sum she re-paid was about $7,000.00. It is her position that this debt should be added back into the parties’ joint liabilities, as it is a debt of the marriage.
I do not accept that this is so. The debt was incurred so that Ms F could obtain tertiary qualifications. In part, those qualifications have enabled Ms F to become a p s t. She will have the benefit of the qualifications for the remainder of her life. In essence, she alone has the benefit of those qualifications. In such circumstances, it does not appear just that Mr F should share in the liability related to that benefit.
The parties initially separated, under the one roof, in early 2001. Mr F left the A R property at Easter time of 2001. He moved into the vacant G R property and has remained living there ever since. The two properties are about a ten minute drive apart. Initially the parties wished to have a flexible regime in respect of care arrangements for the children. This has not proved to be possible due to a continued and high level of tension between them. Subsequently, an arrangement came about whereby the children would spend Tuesday and Thursday evenings with Mr F and a period of twenty-four hours on each Saturday. The parties have now agreed that this arrangement should continue. This would not have been Mr F’s preference. However, to his great credit, he conceded that the continuation of this arrangement was what K and K wanted and they were well settled in it. Accordingly, he abandoned his application for shared care.
After separation, Mr F believes that the I G business was providing him with an income in the high $20,000.00 per annum. He decided that he wished to change the nature of the business so that it included more work in the rural rather than the suburban areas of D. This did not prove to be successful and less and less work was available. It was necessary for him to seek other sources of income. After the parties separated, Mr F was also confronted with a number of unexpected expenses with regards to repairs to his motor vehicle and other equipment used in the gardening business. As a result, he began work, on a part-time basis, as a disability and youth support worker at A.
When Mr F moved into it, the G R property had not been occupied for some time. It was necessary for Mr F to do some repairs there and also fit out the property with some whitegoods. Once again, he had recourse to his available superannuation. Mr F deposes that he withdrew between $30,000.00 and $35,000.00 from his L G E’s S F in the period following separation. Ms F does not dispute this sum. However, it is her position that this sum too should be added back into the parties’ pool of assets.
I accept that Mr F used the sum in order to replace the engine in the Toyota motor vehicle, which he continues to own. I also accept that he spent about $4,000.00 and $3,500.00 in regard to repairs to the G R property and the purchase of household goods respectively. It was also necessary for him to repair and replace some of his mowing equipment and a tractor and trailer. These expenses consumed about $6,500.00. All in all, I accept that he expended approximately $20,000.00 to $22,000.00 in respect of items of property, which remain in his possession. The remaining monies were utilised in his current living expenses. I accept his evidence that he was finding it difficult to make ends meet.
In all these circumstances, I do not believe that it is appropriate nominally to add back this sum into the parties’ pool of assets. In my view, it would not be appropriate to add back this sum of approximately $35,000.00. This is not a case where the evidence indicated unequivocally that the husband has wasted assets through excessive expenditure on himself. Nor do I think that Mr F’s use of the monies to repair his motor vehicle; make the G R property habitable; and finance the repairs to his plant and equipment; can be regarded as a “premature distribution” of martial assets in the sense used by Nicholson CJ in Townsend and Townsend.[5]
[5] Townsend and Townsend (1995) FLC 92-569 at page 81,654
I G cease to trade in early 2004. The business made a loss of $6,000.00 in the financial year ending 30 June 2003 and a profit of a similar amount in the preceding year. Mr F has attempted to sell the business of I G, but has received little interest in respect of it.
Since early 2004, Mr F’s main source of income has been from his employment at A. He is a causal employee, who is called into work at short notice in respect of either A’s disability support or youth support programs. The positions are not particularly well-paid and there is much competition for them. He does not work fixed hours but is reliant on a client of A needing his services to be called in. As a result, his income is not particularly great. In the last financial year he earned just over $30,000.00. He is currently assessed to pay child support in the sum of $68.76 per week. This is a bone of contention between him and Ms F. In future, Mr F would like to obtain some formal qualifications as a youth worker. It is work he enjoys.
Ms F plans to continue to work as a p s t for the foreseeable future. She is earning approximately $60,000.00 per annum. She wishes to remain as a c t. As such, she is unlikely to pursue promotion, which would involve her leaving face-to-face t and taking up a more managerial position.
In their affidavit material, both parties assert that they continue to suffer significant medical problems, as a result of their separate car accidents. However, neither party provided any detailed medical evidence in this regard. It seems that Ms F is able to continue to t notwithstanding her migraines and arthritis. Given his lack of skills, on any view Mr F’s level of disability is significant. I accept that he finds it difficult to stand for any lengthy periods of time as his prothesis causes him pain. In many ways, he is a remarkable person who has not let his disability prevent him undertaking many activities. I was impressed at the work he had completed at both the G R and A R properties. He will need to replace his prothesis shortly. At best, the prothesis should be replaced every two or three years or so. The cost is between $5,000.00 and $6,000.00. This amount was factored into the calculation of the compensation monies he received in 1991.
The first step – the parties’ pool of assets
Given the resolution of the issue concerning the value of the A R and G R properties, this exercise is considerably simplified and is largely based on agreement between the parties. I find that assets of the parties available to be divided between them is as follows:
A R
$ 350,000.00
G R
$ 200,000.00
Wife’s car
$ 13,700.00
Husband’s care
$ 4,700.00
Wife’s E bank account 1661.39Pounds
Plant and equipment of I G
$ 3,880.00
$ 7,740.00
Total:
$ 580,020.00
Superannuation
NTGPASS (wife)
$ 38,088.00
NTSSS (wife)
$ 5,675.00
G S superannuation (wife)
$ 10,161.00
L G S (husband)
$ 41,121.00
ARF (husband)
$ 5,067.00
Total superannuation assets:
$ 100,112.00
TOTAL:
$ 680,132.00
The household contents of A R and the ride-on lawn mower located there, have not been included in this table of assets. No formal valuation evidence was provided in respect of them and apparently no agreement was reached in regards to this issue. It is Ms F’s position that the contents of the A R property have been effectively divided between the parties. I am not able to resolve this issue.
In her evidence, Ms F raised what she believed were irregularities in the husband’s bank accounts and in particular in regards to sums he had received from W M and some monies which were remitted overseas. I accept that the cheque from W M related to Mr F’s withdrawal from his superannuation scheme. The evidence in regards to the other sum is too nebulous for the sum to be added into the parties’ table of assets.
The various sums in regards to the parties’ superannuation entitlements came about as a result of agreement between the parties and was reflected in a table which was submitted to the court by Ms A, counsel for Ms F. Mr F indicated his acquiescence to those valuations. I have myself performed the necessary conversion of the pounds sterling sums into Australian dollars, as at the date of these reasons for judgment. Neither party had performed this task.
The second step – assessment of contributions – section 79(4)(a) to (c)
I now turn to the second of the steps in the exercise under section 79, namely an assessment of the parties’ contributions within the context of section 79(4)(a) to (c). These provisions are as follows:
“Section 79(4) In considering what order (if any) should be made under this section in proceedings with respect to any property of the parties to a marriage or either of them, 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;
(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;
(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 home maker or parent.”
Section 79(4) requires that the court look at the entirety of the contributions, both financial and non-financial, to the welfare of the family, as well as to the acquisition, conservation and improvement of those assets. Contributions are not required to be tied to the acquisition, conservation or improvement of a particular asset and are to be taken into account generally as contributions in a total sense. The task required of me pursuant to section 79(4) of the Family Law Act thus is to weigh and assess the disparate contributions of the parties to arrive at an outcome, which is both appropriate and just and equitable in all the circumstances.[6] Contributions, which are different in quality and nature, must be compared. The exercise is not purely an arithmetical or accounting one.
[6] See Pierce &Pierce (1999) FLC 92-844
In assessing the parties’ contributions towards the acquisition of the assets of their marriage, it is necessary to consider whether the court should adopt a global approach or an asset by asset approach. In the former, the court assesses the parties’ contributions to their assets in a total or comprehensive manner. In the latter, the court assesses the parties’ contributions to individual items of property. Both approaches are legitimate, however the High Court has held that the global approach is generally more convenient, particularly when it is necessary for the court to assess contributions, which are different in nature. In Norbis v Norbis[7] it was said as follows:
“Although it is natural to assess financial contributions under sec. 79(4)(a) by reference to individual assets, it is also natural to assess the contribution of a spouse as home maker and parent either by reference to the whole of the parties’ property or to some part of that property. For ease of comparison and calculation it will be convenient in assessing the overall contributions of the parties at some stage to place the two types of contribution on the same basis, i.e. on a global or, alternatively, on an “asset-by-asset” basis. Which of the two approaches is the more convenient will depend on the circumstances of the particular case. However, there is much to be said for the view that in most cases the global approach is the more convenient.”
[7] Norbis v Norbis (1986) FLC 91-712 at page 75, 268 per Mason C J & Deane J
The asset by asset approach has been adopted in those matters where the marriage concerned has been of short duration and during which the parties have strictly divided and kept their own assets separate from one another.[8] In this case, the relationship and marriage between the parties was one of about ten years. Throughout their marriage, the parties intermingled their funds and regarded their marriage as a joint enterprise between them. As a result, I believe that it is appropriate to adopt a global approach to the assessment of the parties’ contributions towards the pool of assets, as I have found them.
[8] See McMahon & McMahon (1995) FLC 92-606
It is now necessary to examine the most significant contributions, made during the marriage, on which the parties each rely. In general terms, these contributions fall into three categories.
a) The capital contributed by the parties at the commencement of the relationship
There is no dispute that Mr F contributed the sum of $241,878.75 by way of his personal injuries damages. It also seems that he had a modest amount of superannuation and a car. The compensation monies were largely utilised for family purposes and were instrumental in enabling the parties to be able to purchase firstly the G R property and then the A R property and fund improvements on both properties.
There is also no doubt that Ms F contributed the full proceeds of the sale of her S As property to joint family purposes. This sum represents approximately $91,500.00. Of more uncertainty is the extent of her savings at the time the parties began their relationship. At best, Ms F had a sum of about A$48,000.00 to A$50,000.00. She also owned a car and some furniture in the U K. The value of these items is uncertain. She also had her existing superannuation in the G S scheme. Ms F did bring property of significant value into the relationship. However, there was a significant discrepancy between the amounts brought in by Mr F on the one hand and Ms F on the other. Counsel for the wife asserts that it is about $60,000.00. I find the discrepancy to be more significant, being in the range of $80,000.00 to $100,000.00. Clearly, this is a significant factor, which favours Mr F.
However, many years have passed since the parties began their relationship together. The savings of both parties have been largely expended during their marriage. The question of the weight to be given to an initial contribution of capital at the outset of a long marriage has been subject to some judicial controversy. In this regard, I bear in mind what has been said in the Full Court of the Family Court in a number of cases. In Quaresimini & Quaresimini[9] the Full Court said as follows:
“The section 79 exercise is not a pure accounting exercise. It is an exercise in identifying the various matters to be considered under section 79 and weighing them up against the other before reaching what is an appropriate order to be made, which order may not be made unless it is just and equitable. The manner in which disparate contributions have to be measured, especially initial capital contributions, has been the subject of much discussion.”
[9] Quaresimini & Quaresimini (1999) Fam CA 1314
In Pierce & Pierce,[10] Ellis, Baker & O’Ryan JJ made reference to several of the authorities. Their Honours said as follows:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight should be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions both of the husband and the wife. In considering the weight to be attached to the initial contribution, in this case the husband, regard must be had to the use made by the parties of that contribution.”
“…there is no principle that the length of the marriage leads to a likelihood that other contributions will outweigh or weigh equally with ‘a particular contribution’. It is a matter of assessing the contributions of all relevant kinds in each case to arrive at an outcome, which is both appropriate and just and equitable. In some cases particular contributions may be outweighed or equalled by other ones. In other cases particular contributions may be so disproportionate to other contributions as to merit special recognition.”
[10] Pierce & Pierce (1999) FLC 92-844 at page 85,811
Mr F’s damages payment is significant for a number of reasons. In my view, it has a special significance in this case. In large part, the payment was to compensate Mr F for the significant level of disability he would have over the remainder of his lifetime. In my view, this quality and its disproportion to Ms F’s financial contributions at the outset of the marriage are such that this contribution does warrant some degree of special recognition.
b) The parties’ contributions during the marriage
I have little difficulty in reaching the conclusion that during the parties’ marriage their various contributions, both financial and non-financial, should be regarded as being essentially equal.
c) Contributions after separation
The parties have been separated now for over three years. This is a significant period. During this period, Ms F has borne the larger proportion of the burden of financially supporting K and K. Due to his limited income, firstly as the proprietor of I G and more recently as an employee of A, Mr F’s income has not been great. On the other hand, Ms F has had the benefit of living in the parties’ most substantial asset, the former matrimonial home at A R. Mr F has lived in the less comfortable accommodation provided by the property at G R. However, overall, I believe that considerations of contributions following separation favour Ms F.
d) Conclusions on contributions
The task required of me pursuant to section 79(4) of the Family Law Act is to weigh and assess the disparate contribution of the parties to arrive at an outcome, which is both appropriate and just and equitable in all the circumstances. Contributions, which are by their nature and quality different, must nonetheless be compared. A corporation or government department is able to ascribe value to the efforts of its servants by the amount of salary it attributes to them for the performance of those efforts. Such a task is not so easy to perform in respect of an exemplary parent or homemaker, who receives no actual salary for the labours he or she performs. Yet, very often, the court is called upon to compare and contrast those roles, when performing its responsibilities pursuant to section 79(4). In addition, the task must be performed when members of society hold very different views as to the nature of marriage and the economic consequences of divorce.[11] Accordingly, the task set for the court pursuant to section 79(4) cannot be regarded purely as an arithmetical or accounting exercise. Section 79(4) carries with it an extremely broad discretion. The parameters of the discretion are that the orders made pursuant to section 79(4) must be appropriate and must not be made unless it is just and equitable to do so.
[11] See Mallet v Mallet (1984) 156CLR 605 at 607-8
The marriage between the parties was a significant period of time. During the marriage the parties raised two children. Both contributed their not insignificant life savings to the common good. In Mr F’s case, this sum represented monetary compensation for the loss of his leg. In addition, he supported the family whilst Ms F pursued her life long ambition of studying fine arts. Both worked long and hard in improving their interests in their two pieces of real property. Ms F is an exemplary parent but Mr F himself cannot be regarded as an absentee one.
It is not possible for me to consider all the data available to me and arrive at a definitive assessment of the parties’ respective contributions, particularly over the ten years of their marriage. The task I have is not a purely arithmetical one. In this regard, I bear in mind what was said by the Full Court in Danielian & Danielian[12] as follows:
“The task of the court in proceedings under s 79 is not akin to an accounting exercise. The task is to examine the facts of each case carefully to decide what is appropriate and just and equitable in the circumstances. There cannot be expected to be a universal answer to that question on any given set of facts. It is of the essence of judicial discretion that different minds may comfortably arrive at different conclusions. By and large, marriage is a joint venture where parties can expect to buffer each other from the winds of misfortune that blow during the course of their relationship. The degree of the buffer may depend on how much individual sailing they do without consultation or indeed contrary to the wishes of the other. But there can be no certain answer to how much that should be when applying s 79 principles.”
[12] Danielian & Danielian [2003] FamCA473 at paragraph 49
Bearing in mind the separate and disparate contributions of the parties in this case, both before and after separation, I have come to the conclusion that I should regard their contributions as being 55/45% in favour of the husband.
The third step – section 75(2) factors – the prospective needs of the parties
I am now required to consider the various matters set out in section 75(2) and in particular to consider whether any further adjustment should be made in favour of either party. The section 75(2) factors 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 to obtain meaningful and gainful employment;
c)whether either party has the care or control of a child of the marriage who is not attained the age of 18 years;
d)the commitments of each of the parties that are necessary to enable the party to support:
i) himself or herself;
ii) and 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)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,
(iii)and the rate of any such pension, allowance or benefit being paid to either party;
g)where the parties have separated or the marriage has been dissolved, a standard of living, which 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;
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 the property of the parties;
na) any child support under the Child Support (Assessment) Act that a party to the marriage has provide, is to provide, or might be liable to provide in the future, for a child of the marriage;
o)any other fact or circumstance;
p)the terms of any financial agreement that is binding on the parties.
Sub-section (a)
– Ms F is forty-six years of age. Mr F is forty-seven. I accept Ms F suffers from migraines and arthritis from time to time. However, these health problems do not seem to have affected her ability to complete tertiary study or work full-time. In addition, there is no medical evidence to document the extent of her disabilities.
I have no reason to think anything other than she has many years of productive life before her.
Mr F has a very significant disability. It precludes him from easily completing many physical activities. He cannot stand for long periods of time. He cannot climb a ladder. Much heavy physical labour is beyond him. However, he is a determined and resourceful person, who has not let his disabilities stand in the way of a productive life. The garden particularly the water feature, at A R is a tribute to his determination. Similarly, I have no reason to believe anything other than that Mr F also has many years of productive life before him. However, given the obvious severity of his disability, this is a factor which overall favours him.
Sub-section (b) – Ms F has had a varied and rewarding career. She has secretarial skills, which are now likely to be somewhat out-dated. She has worked in the B D S. She has been the personal assistant to the heads of two large organisations. She has experience in the finance industry at a high level. She now has tertiary qualifications and a graduate diploma in p t. Clearly she is a person with many talents, who can set her hand to many tasks successfully.
At the present time Ms F is working as a p s t. She enjoys this work which, for obvious reasons neatly dove-tails with her responsibilities for K and K. Her most recent pay slip indicates that her annual salary is $60,694.00, with a N T allowance of $960.00 per annum. Ms F has been a t for about seven years. I accept that she has reached the top band of payment, so far as c t are concerned and she herself has no wish to move out of the c into a more managerial role. Accordingly her salary is likely to remain at about the same level and she herself is unlikely to consider other employment, until at least K and K have completed their secondary education.
Mr F left school at an early age. He has no specific qualifications to speak of. Prior to his accident, he did manual work in factories; was a sheet metal worker; and more recently a scaffolder. His level of disability makes it difficult for him to do heavy manual work. Certainly, it is impossible for him to be a scaffolder again. His most lengthy period of employment was with the D C C as a car park attendant. This position suited him physically, as it was largely sedentary, apart from the opening and closing of the car park’s roller doors. However, Mr F found it a somewhat tedious occupation. I can understand why this would be so.
Clearly, Mr F has a love of gardening and the outdoors. Ms F is somewhat critical of him for not seeking to be transferred within the
D C C. Regardless of the substance or otherwise of these criticisms, it is not now open to Mr F to return to the D C C. I also suspect that Mr F’s personality does not make him amenable to working in a hierarchical organisation.Being a self-employed lawn mower and gardener suited Mr F’s personality. He was his own boss, doing what he liked. However, it is clear that Mr F does not have any great entrepreneurial abilities. Over time the business diminished in profitability and is now something of a liability.
More recently Mr F has obtained casual work at A. A administer a number of programs for persons with disabilities and disadvantaged youth. For example, A run a number of houses, where children who have come to the notice of the welfare authorities live. House parents are required from time to time. Other people with disabilities may need support to go on outings or shopping. Mr F performs these roles, often at short notice. He works irregular hours.
The positions do not seem to require any special skills other than patience and commonsense. They are not particularly well remunerated and I accept Mr F’s evidence that there is much competition for them and if he is not willing to take up the offer of a shift he is likely to fall into disfavour with A. Mr F enjoys the work. He would like to obtain formal qualifications, which would allow him to become a professional youth worker. He has not put these plans into effect as yet.
Mr F’s most recent group certificate shows that he earned the sum of $31,350.00 in the financial year ending 30 June 2005. This equates to a salary of about $600.00 per week. I accept that Mr F’s income is unlikely to increase much in the foreseeable future and his employment prospects are severely restricted, because of his level of disability and lack of skills. On any view, Ms F is better placed to support herself financially than Mr F. The matters for consideration under this criterion favour Mr F.
Sub-section (c) – Ms F has primary responsibility for the care of K now aged eleven years and K now aged ten years. Both children are attending H S P S. Ms F wishes K to attend a private secondary school, K C, next year. Mr F has some reservations about this school and its suitability for K but accepts that it is likely to provide him with a better standard of education. Both children are approaching their teenage years and their care is likely to involve significant expense.
Ms F, of course, does not bear the financial responsibility for maintaining K and K alone. She is entitled to claim child support from Mr F, as indeed she has done. However, Mr F is likely to be a low wage earner for some time to come. As such, his contribution of child support is unlikely to match Ms F’s financial input into the care of the children concerned.
Ms F is fortunate that her work commitments are complimentary to the children’s school hours and holidays. Her responsibilities for K and K will not place undue restrictions upon her working hours or choice of work. However, the factors for consideration under this criterion strongly favour Ms F.
Sub-section (d) and (e) – Other than K and K, neither party has responsibility to support any other person. Both parties have recurrent commitments, which they have identified in their financial statements. There is nothing extraordinary in any of those commitments. Neither party lives extravagantly or is in a position to save any significant sums each week.
Sub-section (f) – As matters presently stand, both parties are relatively equal in the preparedness for retirement. Ms F has about $54,000.00 worth of superannuation and Mr F approximately $46,000.00 in accrued superannuation. Mr F’s position in this regard has deteriorated over the period of the marriage, as he has withdrawn significant sums from his superannuation.
Ms F is probably better placed to increase her superannuation over the concluding years of her working career than Mr F as her income is likely to be greater. However, at this stage, neither party has a pressing need to consider financial security in retirement. This is not a particularly important consideration in this particular case.
Sub-section (g) – One of the sad consequences of the end of the marriage between the parties is an inevitable reduction in the standard of living for both parties. It is trite but true nonetheless that two households cannot live as cheaply as one. What is important in respect of this sub-section is that any drop in standard of living should not be borne disproportionately by one party.
Ms F wishes to continue to live in the A R property. This has been her and the children’s home for many years. It provides comfortable accommodation. Ms F has not made any formal inquiries as to her capacity to borrow against the security of the A R property, which is presently unencumbered. It would be her preference for the parties each to retain the properties occupied by them without any exchange of cash.
Mr F wishes to continue to live in the G R property. This property had been vacant for several years and has become somewhat run down as the parties focused their attention on the A R property. The accommodation at G R is provided by a demountable under a separate roof covering. The block at G R is eight hectares. I accept Mr F’s evidence that repairs are needed at G R. The accommodation it provides is less comfortable than A R but adequate. Mr F seeks some payment to him to perform improvements on the property.
I can well understand why both parties would want to retain the property he or she occupies. It is obvious that both have a liking for a rural lifestyle. Clearly, the sale of one or other of the properties would involve a significant expense and some level of dislocation. It appears to me desirable that the court should consider ways in which both parties’ desires in this regard can be satisfied. However, Ms F’s wish to retain A R for herself and the children should not be given weight to such a degree that the overall outcome is one which is unfair to Mr F.
Sub-section (h), (j) and (k) - Neither party has brought an application for spousal maintenance. As a result, these sub-sections have no application in these proceedings. I note however that Ms F was able to obtain tertiary qualifications during the marriage. She did this with the support of Mr F, both financial and emotional.
Sub-section (l) – This sub-section is directed towards the financial effects of one party continuing in his or her role as a parent. To their mutual credit, both parties wish to be actively involved in the future parenting of K and K. Ms F is fortunate that her choice of employment does not unduly restrict her career prospects because of her wish to be available for the children. Accordingly, the matters for consideration under this sub-section do not have a high degree of relevance in this case.
Sub-Section (m) – Neither party is cohabitating with another person. This is not a relevant consideration in the current matter.
Sub-section (n) – Ms F wishes to retain the property at A R. This is the parties’ most significant asset and has appreciated in value significantly over the last twelve months. I accept Mr L’s evidence that it is likely that the property will continue to increase in value for at least the next twelve months. Mr F wishes to continue to live in the G R property. It has proven to be a less successful investment than A R. The reasons for this are the quality of the dwelling on the property; the fact that the block is subject to water logging during the wet season; and the fact that it cannot be subdivided. Given the fact that the A R property is attractive to the wife both personally and as an investment, it is desirable that she should retain this property. The orders I propose to make will enable her to have such an opportunity but will require her to pay Mr F a significant sum of money. This becomes inevitable because of my assessment of the parties’ contributions during the marriage and the fact that so much of their capital is concentrated in the A R property, which has markedly appreciated during the marriage.
Ms F has produced no concrete evidence as to her borrowing capacity. The parties are fortunate that at the end of their marriage they own two residential properties which are unencumbered. This is as a result of both their significant financial contributions during the marriage but more so Mr F’s. It would be preferable if both parties could avoid borrowing money in future. However, Ms F is in full-time employment. She will have a significant equity in the A R property.
I have no reason to believe that she will not be able to service a mortgage on the property, which will be comparatively modest when compared to the value of the property overall.Sub-section (na) – Because K and K are living predominantly with Ms F, Mr F is currently assessed to pay child support to her. Mr F is a PAYG tax payer at present. His income is relatively easy to ascertain for the purpose of applying the relevant child support formula to it. In the past, when self-employed, the position has been more difficult and Ms F is entitled to feel aggrieved that she has received inadequate child support from Mr F. The child support has fluctuated between $150.00 and $68.76 per fortnight. Currently the child support is this latter figure.[13] This factor, along with the considerations already discussed under sub-section (c) above strongly favour Ms F.
[13] See exhibit “W3”.
Sub-section (o) and (p) – I do not consider that these sub-sections are relevant.
Conclusions on section 75(2) factors
After having considered the various section 75(2) factors, it seems clear that the most important considerations for the court, under the section’s ambit, are the disparity in the parties’ income earning capacities, which flow from the husband’s significant disabilities and lack of employment skills, opposed to the heavy financial responsibilities which will fall on the wife’s shoulders to provide for the children of the marriage in the next six to eight years, which are likely to be their most expensive ones, given that both K and K will be entering their teenage years. Clearly, these factors pull in different directions.
In my view, the wife is in a markedly superior financial position to that of the husband. She has a secure career as a s t. Her income is markedly superior to that of the husband, being close to double it. On the other hand, the husband has no skills to speak of. He is doing casual work. It is not easy for him to obtain alternative employment because of his level of disability. There is much wisdom in what was said by the Full Court of the Family Court in Clauson and Clauson:[14]
“It has long been recognised that in most cases the most valuable “asset” a party can take out of the marriage is a substantial, reliable, income-earning capacity.”
In this case, the wife has such an asset. The husband does not.
[14] Clauson & Clauson (1995) FLC 92-595 at page 81,911
I accept that a far larger proportion of the burden of supporting K and K has and will continue to fall on the wife’s shoulders. Although Ms F’s income is markedly superior to that of Mr F, she cannot be regarded as a wealthy person. I am well aware that in order to comply with the orders that will be made and to attain her wish of retaining the A R property, it will be necessary for Ms F to borrow a significant sum of money. The recurrent payment of such a mortgage will necessarily reduce the available funds for the family.
In my view, the section 75(2) factors are closely balanced but the heavy financial responsibility that will fall on Ms F to support K and K tips the balance in her favour slightly. K is almost twelve and K just ten. Their years of secondary education stretch before them. They are likely to remain at school for as long as possible. They are entering their most expensive years of support. It is likely the child support Ms F will receive from Mr F will be modest. Accordingly notwithstanding the severe difficulties he faces, I have come to the conclusion that there should be a modest apportionment of 5% in Ms F’s favour for section 75(2) factors.
The fourth step – section 79(2) – is this a just and equitable outcome?
The final step in determining property matters is to stand back and consider whether the proposed result is just and equitable. Also, since the advent of the legislation, which has made superannuation splitting possible, this is also the stage where it is often appropriate to determine what the mix between actual assets and superannuation should be in the division of property between the parties concerned. The intent of Part VIII B of the Family Law Act, which deals with superannuation splitting, was to ensure an equitable division of matrimonial property and avoid the artificial situation that prevailed in the past, whereby one party, commonly the husband had the sole benefit of superannuation and the other party, commonly the wife, was compensated with other assets, which may or may not have had an equal value but was thus denied the benefit of retirement planning through superannuation.
This is not the case here. I intend to make orders that will see each of the parties retaining the real property in which they currently live. In addition, prior to the making of any orders in this case, the parties have approximately equal amounts of superannuation. In Ms F’s case, in both A and the U K, she holds superannuation to the value of $53,924.00. In Mr F’s case, he holds superannuation to the value of $46,188.00. Given the findings I have made in respect of the parties’ overall contributions in the respect of the acquisition of their marital property, it does not seem appropriate to me for there to be any splitting orders in respect of either parties’ superannuation.
The parties’ other property is worth $580,020.00 in total. Fifty percent of this sum is represented by the sum of $290,010.00. Mr F has in his possession property to the value of $212,440.00 in the form of G R ($200,000.00); his motor vehicle ($4,700.00); and the plant and equipment from the gardening business ($7,740.00). Accordingly, if Ms F is to retain the A R property, it will be necessary for her to transfer the sum of $77,570.00 to Mr F. Bearing in mind the slight discrepancy in the parties’ superannuation, I propose to round this sum up to $80,000.00.
In the event that Ms F is unable to raise such a sum, it will be necessary for the A R property to be sold. I propose to allow her sixty days to investigate whether or not she is able to borrow such a sum against the security of the A R property. Given that the property is unencumbered and she herself is in secure employment, I anticipate that she will be able to borrow this sum, which represents less than a quarter of its value.
If Ms F is able to raise this sum, she will be left with a secure home for herself and the children, which is her wish. The property at A R is likely to appreciate. Disruption to her and the children’s lifestyle will be diminished. I consider Ms F will be able to manage the mortgage, as she leaves the marriage with an intact ability to earn an income. Ms F’s employment is likely to remain secure for the foreseeable future.
On the other hand, Mr F will have secure accommodation and some monies available to him to improve that accommodation. Given his lower income and significant disability, he has some need of funds to cater for the exigencies of life. Given his significant contributions towards the acquisition of the parties’ matrimonial assets in the form of his compensation payments, I think that this represents a just and equitable outcome.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and twenty-two (122) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate: C White
Date: 25 August 2005
and Clauson v Clauson (1995) FLC 92-595
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