F v R
[2012] SADC 84
•21 June 2012
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
F v R
[2012] SADC 84
Judgment of His Honour Judge David Smith
21 June 2012
FAMILY LAW AND CHILD WELFARE - DE FACTO RELATIONSHIPS
Plaintiff and Defendant in a domestic partnership – application by Plaintiff for an adjustment of property interests under s 9 of Domestic Partners Property Act 1996 – discussion of statutory considerations relevant to Court's discretion to make Orders for division of property in a way which is just and equitable – Plaintiff and Defendant in de facto marriage relationship for nine years – Defendant engaged in paid employment and Plaintiff after initial period at work stayed at home caring for three children.
Held: Plaintiff's contributions to relationship outweighed those of the Defendant – other relevant matters also favoured Plaintiff – Order for division of property to the effect that Plaintiff receive 65 per cent of property pool together with a sum for Defendant's occupation of the family home.
Domestic Partners Property Act 1996 (SA) ss 3, 9, 10, 11; De Facto Relationships Act 1984 (NSW) ss 26, 27; Domestic Relationships Act 1994 (ACT) s 19; Industrial Relations Act 1999 (QLD) s 43, referred to.
Dwyer v Kaljo (1987) 11 Fam LR 785; Evans v Marmont (1997) 21 Fam LR 760; Love v Chidley (2002) 219 LSJS 287; Norbis v Norbis (1986) 161 CLR 513; Parker v Parker (1993) 16 Fam LR 863; Hogg v Roberts (2003) 87 SASR 248; Arnold v Dalton (2002) 84 SASR 482; McKay v McKay [2008] NSWSC 177; Callow v Rupchev [2009] NSWCA 148; H v E [2009] SADC 76; F v D [2010] SADC 92; Gollings v Scott (2007) FLC 93-319; NHC v RCH (2004) FLC 93–204; M v P [2008] SADC 169; H v G [2005] SASC 344, considered.
F v R
[2012] SADC 84Introduction
On 29 May 2008, after a de facto marriage of approximately nine years, the plaintiff and the defendant separated. There are three young children of the relationship who have remained in the care of the plaintiff. The parties brought property to the relationship and acquired property in the course of it.
In this action the plaintiff applies for an order for the division of that property, pursuant to s 10 of the Domestic Partners Property Act 1996 (“the said Act”).
The parties were plainly in a domestic partnership, within the meaning of s 3 of the said Act. I make a declaration that such was the case.
All the other threshold matters prescribed in s 9 of the said Act, which are preconditions to this Court having jurisdiction, are satisfied. There was no dispute about them. Elaboration is not necessary.
Statutory Parameters
The provisions of the said Act which are material to this case are:
10—Power to make orders for division of property
(1) On an application for the division of property after the end of a domestic partnership, the court may make such orders as it considers necessary to divide between the domestic partners the property of either or both partners in a way that is just and equitable.
(2) For example, the court may make orders for—
(a) the transfer of property from one domestic partner to the other; or
(b) the sale of property and the division of the net proceeds between the domestic partners in proportions decided by the court; or
(c) the payment by one domestic partner of a lump sum to the other.
11—Matters for consideration by court
(1) In deciding whether to make an order for the division of property under this Part, and if so the terms of the order, the court—
(a) must consider the financial and non-financial contributions made directly or indirectly by or on behalf of the domestic partners to—
(i) the acquisition, conservation or improvement of property of either or both partners; or
(ii) the financial resources of either or both partners; and
(b) must consider the contributions (including homemaking or parenting contributions) made by either of the domestic partners to the other partner or to children of the partners or either of them; and
(c) must have regard to the terms of any relevant domestic partnership agreement, and
(d) may have regard to other relevant matters.
In construing this enactment and discussing applicable principles, I will borrow from the authorities which deal with substantially similar legislation in other jurisdictions and from authorities dealing with the Family Law Act (Cth).
As can be seen Section 10 confers a discretionary power on the Court to make orders for the division of property “… in a way that is just and equitable …”.
Section 11 prescribes a number of specific considerations, to which the Court must have regard, when exercising that discretion, namely:
· the two types of contributions specified in (a) and (b) of s 11(1);
· the terms of any cohabitation agreement – there is none here (see s 11(1)(c)); and
· any “other relevant matters” (see s 11(1)(d)).
In applying the above considerations to the circumstances of the case, there will necessarily be some overlapping. The three subsections have focal points.
The focus of s 11(1)(a) is upon matters which are material namely “property” and “financial resources” (nb expansive definition of “property” (s 3)). However, indirect contributions are to be considered. For example, one partner is to be regarded as contributing if he or she provides support while the other is engaged in acquiring, conserving or improving the property or financial resources of either or both of them.
The focus of s 11(1)(b) is upon contributions which are not so obviously material, such as “homemaking” and “parenting”.
Finally, s 11(1)(d) permits the Court to have regard to “other relevant matters” which are arguably not captured by the contributions subsections (a) and (b) but which in the circumstances of the case, are nonetheless relevant to the exercise of the discretion to make an order which is “just and equitable”.
The categories of such matters could never be closed but in the appropriate case “other relevant matters” might include:
· financial circumstances of the parties;
· needs and means of the parties;
· length of the relationship;
· any promise or expectation of marriage; and
· opportunities lost by a party by reason of that party’s contributions.
(see Dwyer v Kaljo (1987) 11 Fam LR 785 per Hodgson J at 793: Evans v Marmont (1997) 21 Fam LR 760 per Gleeson CJ, McClelland CJ in Equity at 764 and per Mason P at 776 and 777; Love v Chidley (2002) 219 LSJS 287 discussion at [128-137].)
In my view, nothing turns upon the use of the permissive “may” in s 11(1)(d) as opposed to the mandatory “must” in s 11(1)(a), (b) and (c). If a matter is relevant the Court should have regard to it.
The language of sections 10 and 11 and, in particular sub section 2 of section 10, makes it clear that it is not intended that the Court embark upon an “accountancy exercise of a fragmentary nature”. On that topic I refer to and adopt what I said at [138] in Love v Chidley (supra) at [320].
The exercise of the discretionary power in s10 to make an order “in a way that is just and equitable” is an “holistic value judgment of a very general kind” as opposed to an accountancy exercise of a fragmentary nature. That is, after taking into account the considerations particularised in s11(1)(a), (b) and (d), the Court must, if the evidence justifies it, select a round figure or make an order for the division of property which is a monetary reflection of what justice and equity demands as the entitlement of the application de facto partner: (see Davey v Lee (1990) 13 Fam LR 688 per McLelland J at 689; Ferris v Winslade (1998) 22 Fam LR 725; at 733 In the Marriage of Collins (1990) 14 Fam LR 563 at 562-572.
Although mathematical precision is not required, the evidence, ordinarily, should identify and value the assets and ascertain the circumstances of their acquisition (see Norbis v Norbis (1986) 161 CLR 513 per Mason and Deane JJ at 523; see also M v P [2008] SADC 169 Beazley DCJ at [40] to [47].)
At [16]–[18] in Hogg v Roberts (2003) 87 SASR 248 Doyle CJ, with whom Perry and Gray JJ agreed, said:
In Parker v Parker (1993) 16 Fam LR 863 Young J suggested a four-stage approach which will often be helpful. The four stages he suggested (at 870) are:
(i) to identify and value the assets of the parties;
(ii) to determine whether any, and if so what, contributions of type A or type B had been made by each partner;
(iii) to determine whether in the circumstances the contributions of the applicant had already been sufficiently recognised and compensated for;
(iv)to make the appropriate adjustment.
Once again, he was concerned with different legislation, but the process he suggested is likely to prove helpful under the Act. However, I emphasise that this is simply one approach. In some cases a broader approach will work better. There is no need to take what might be called a narrow approach involving a careful tracking of income and expenditure, contributions made and benefits received. The legislation requires a reasonably broad and practical approach.
Between stages (iii) and (iv) it will be necessary to consider whether there are “other relevant matters” to be considered. It will also be necessary to bear in mind that the object is to divide property in a “way that is just and equitable”. As I have said, I do not treat that expression as opening up all aspects of the relationship, but it appears to me that the matters identified in s 11(1) of the Act do not alone dictate the order to be made under s 10(1). They are matters to be considered, they are important, but they will not necessarily be decisive.
(the emphasis is mine)
To make it abundantly clear, the NSW Act which Young J was addressing in Parker v Parker (supra), did not include any provision equivalent to s 11(1)(d). Further, I note that Young J recommended that the Court, amongst other things, “… determine whether in the circumstances the contributions of the applicant had already been sufficiently recognised and compensated for …” I gather that His Honour is there directing attention to whether there has been some earlier division of property agreed or somehow arrived at between the parties. On 18 October 2011, I made an order that the plaintiff be paid $30,000 from the proceeds of the sale of the family home in Banyo Brisbane. Otherwise there has been no arrangement between the parties. The items of property the subject of this application are held in the name of one or other of the parties or their joint names, as was the case at the time of the break up. The final Orders will address what happens to that property.
The time for valuing the assets is at the time of hearing because that is when orders for division of property are made (see Evans v Marmont (supra) at 764; Parker v Parker (supra) at 875).
After setting out findings as to the history of this relationship, including the circumstances in which assets were acquired, I will follow the five stages set out hereunder, bearing in mind that a “reasonably broad and practical approach is desirable”:
1Identify and value the assets of the partners at the time of trial;
2Evaluate the contributions of the partners to the acquisition, conservation, or improvement of property and to the financial resources of each other (s 11(1)(a));
3Evaluate the contributions of the partners to each other and to the children including homemaking or parenting contributions (s 11(1)(b);
4Have regard to other relevant matters (s 11(1)(d)); and
5Make the appropriate Order or Orders.
Before I turn to the history of the relationship, I mention two further matters which featured in the evidence in this application, namely, blame or fault for the breakdown of the de facto marriage relationship and maintenance.
Blame or fault for the breakdown of the de facto relationship is irrelevant to the exercise of the discretion under s 11 (Hogg v Roberts (supra) at [15]; see also Evans v Marmont (supra) at [768].
As to maintenance I note that similar enactments in NSW and ACT have specific maintenance provisions. Those enactments had been in operation for some years before the first version of the South Australian Act came into operation (see De Facto Relationships Act, 1984 (NSW) ss 26, 27 now Property (Relations) Act 1984 (NSW) and Domestic Relationships Act, 1994 (ACT) s 19). Notwithstanding those models, the South Australian Act remained silent on this topic. Silence, on a topic of such paramount importance, must indicate that Parliament did not intend that the Court, directly at least, make such orders in the context of dividing property (see Love v Chidley (supra) at [136]; Hogg v Roberts (supra) at [13] and [44] per Doyle CJ and Arnold v Dalton (2002) 84 SASR 482 per Bleby J at [49]). However, that is not to say that such matters as, failure to pay Child Support, cannot be relevant to the evaluation of the respective contributions of the parties. For example, if one party wrongfully avoids paying child support to the party with care of the children, then that will inevitably result in homemaking and parenting obligations being more burdensome for the other party, thereby increasing that party’s “parenting or homemaking” contribution. Further, such a failure could also be characterised as a “relevant matter” within the meaning of s 11(1)(d) of the said Act.
The allegation in this case is that while the defendant has paid Child Support, it has not covered the expense of maintaining the children.
Credibility and Reliability
The parties were the only witnesses. The defendant represented himself.
I accept the plaintiff as both credible and reliable. There were some predictable difficulties with the timing of events. Also there was conflict between the plaintiff and the defendant about when cohabitation resumed after the long separation in the middle of the relationship. I prefer the plaintiff’s evidence as to that for reasons set out in the findings. Putting that aside and the allegations of domestic violence and dysfunctional behaviour, there was little conflict about the chronology of events.
I have reservations about the defendant’s evidence. He seemed evasive and surprisingly unknowledgeable about such everyday topics as his wage receipts and his annual and long service leave entitlements. He failed to make timely disclosure of some relevant documents despite requests. He claimed that he was unaware of some of his obligations. Further I was initially suspicious about his true motives for stopping the mortgage loan repayments and the timing of his decision to stop work at Virgin Airlines and so bring his earnings to a halt on the eve of the trial. However, I leave my doubts as reservations only. He represented himself and claimed to be ignorant of some of the issues he was facing. In the end a full picture of the property pool has emerged.
History of Relationship
The following are my findings as to the history of the relationship and the circumstances in which the parties acquired assets. I will deal with the evaluation and division of them later.
The Beginning of the Relationship
The parties were born in Adelaide – the plaintiff on 10 August 1967 and the defendant on 3 May 1965. They met for the first time on an Ansett aircraft bound for Sydney in September or October of 1995. The plaintiff was then 28 years old and the defendant 30. At the time the plaintiff was travelling from Adelaide to Sydney to take up a position with a travel agency associated with Ansett. The defendant was a flight attendant on the aircraft. It was the beginning of the relationship (32, 33, 185).
By November 1996 the plaintiff was back in Adelaide working for Ansett at its Call Centre. At that time, namely November 1996, the plaintiff and defendant commenced cohabiting in a rented house at Kensington Park (33, 185).
The plaintiff was then earning about $30,000 per annum. She had savings of $2,000 – $2,500, an old Mini Minor motor car, minimal superannuation entitlements and some basic household furnishings “… mainly all my things from my 21st birthday party …” (34).
The defendant earned $40,000 – $50,000 per annum. He too had superannuation entitlements. He had savings of $20,000 in Outlook Credit Union, later known as MECU Credit Union, and a Nissan Bluebird car on which $21,000 was owing (185, 186). At this time he was emerging from a collapsed marriage and provided little or no furniture.
The parties together purchased necessary household items such as a washing machine and a dryer. They shared living expenses (35, 36).
It can be seen therefore that the plaintiff and the defendant started out their relationship on a somewhat equal footing in terms of assets.
The Relationship in Adelaide until the Long Separation
– November 1996 to January 2003
Both of the parties worked for Ansett until its collapse in September 2001. The defendant remained a flight attendant throughout and the plaintiff worked in a number of Ansett departments, including selling national and international holiday packages. Before she met the defendant she had completed a Hospitality and Travel Course and had experience of travel work (32). She took on shift work. Her earnings increased in this period to the extent that in the financial year, preceding the Ansett collapse, she was earning in the region of $50,000 per annum (35, 36).
In about May of 1997 the parties became engaged to be married (189, 40).
In February or March of 1998 the parties purchased their own home at Kensington Gardens. The purchase price was approximately $163,000. The plaintiff contributed $5,000, her parents $5,000 and the defendant $25,000 or thereabouts. The parties borrowed about $135,000 from the HSBC Bank Australia Ltd to complete the purchase. The loan from the HSBC was, of course, secured by a mortgage. The parties routinely paid the mortgage from their respective salaries. By then the plaintiff had purchased a new Mazda 121. They were individually paying off their car loans – the plaintiff the Mazda and the defendant the Nissan Bluebird. Additionally there were costs incurred by both of them in improving the house. They shared those costs (36-38, 186-188).
In the first or second year that the parties were living in Kensington Gardens, that is, 1997 or 1998, the plaintiff opened, in her name, a Managed Investment Account with Colonial First State Investments Ltd. Having paid off her car, the plaintiff made regular monthly payments from her salary into that Investment Account. In particular, her salary was paid by Ansett into a Credit Union Account from which regular payments were made to Colonial First State (39–40, 188–189, see also Exhibit P1).
In May of 2000, the parties separated for about six months by reason of differences between them. They eventually reconciled and resumed cohabitation in about November 2000 (38, 40, 41 and 188).
On 13 September 2001 Ansett Airlines collapsed (42, 192). At that time the plaintiff was working in the Ansett Call Centre as an International Travel Consultant (42) and, as indicated, the defendant was still working as a Flight Attendant. Both parties worked on for some time for the Ansett Administrator, but the collapse was effectively the end of their careers with Ansett (42, 43, 192, 193). Both received severance payments. The plaintiff received $20,000 and paid that into the mortgage account (44). She said that the defendant received about $30,000 but she was unsure about what he did with it (44). The defendant acknowledged that he received “… eight weeks’ entitlements …” which was paid to him over the years in ever decreasing instalments (193). He did not say how he applied the payments.
On 5 January 2002, at a time when the defendant had no employment, the first child T was born. To assist with the household expenses the plaintiff obtained $2,000 from her Ansett superannuation (45). During 2002 the plaintiff stayed at home looking after the baby (45). Indeed she has not taken on paid employment since then.
In early 2002 the defendant obtained work in a home building company (44, 193), and supplemented the income from that source with a casual position in the Qantas Club at the airport (45, 193, 194).
In about November 2002 there was trouble in the relationship and in the result the defendant left home again, this time for some two to three weeks (46, 194). It was about this time that his job in the home building company ended but, by then, he was able to work longer hours at the Qantas Club (46, 194).
The Long Separation – January 2003 to July/August 2005
In late January 2003, after the child T’s first birthday, and at a time when the plaintiff was pregnant with the second child, S, there was a serious domestic crisis which resulted in police intervention and court appearances (48, 195). A separation followed. The defendant moved to his parents place and the plaintiff and the child T, moved to her mother’s place. She eventually returned to live at the Kensington Gardens house (48–50, 206).
At this time, that is, in late January 2003, the defendant withdrew $20,000 from the mortgage account to, amongst other things, “cover legal fees” (206).
In the months that followed, that is, in early 2003, the parties maintained contact with one another. The defendant visited the Kensington Gardens house and even stayed overnight from time to time (50). However, the parties did not resume cohabitation. The defendant remained living at his parents’ house (206).
During the separation, on 19 September 2003, the second child, S was born (49, 202). The plaintiff was then receiving Child Support payments and “… Government Family Payments …” (49). Throughout this time, the plaintiff was hopeful that she and the defendant would reconcile and resume cohabitation (51).
In about January 2004, or thereabouts, the defendant applied for a job with Virgin Airlines. He was granted an interview in Brisbane (50, 51). The plaintiff knew about this and supported him in his application. In particular, in January 2004 she and the children travelled to Brisbane for the defendant’s interview and holidayed with him there and at the Gold and Sunshine Coasts for a week or so (51, 52, 208).
After that holiday the plaintiff and the children, returned to Adelaide to the plaintiff’s parents home in Elizabeth Vale. The plaintiff did not wish to live alone in the Kensington Gardens house and it was left unoccupied (53).
The defendant’s interview with Virgin Airlines was successful and in February 2004 he returned to Brisbane for training (208). Again the plaintiff and children travelled to Brisbane in this period and joined the defendant for a few weeks (52). The defendant commenced work with Virgin Airlines in about May 2004 and was based in Brisbane and so was living there (207).
The parties decided to lease the Kensington Gardens house. The plaintiff said the letting of the house occurred around October 2004 (54).
The plaintiff said, and I accept it to be so, that in this initial period of separation, the mortgage payments for the Kensington Gardens house came from funds in the joint mortgage account and eventually from the rent (54–55). Further, she said that she and the children managed on “… Government payments and child support …” (54).
Though separated the parties maintained contact. In particular, they spent Christmas 2004 together and soon thereafter holidayed together in the Grampians in Victoria (58).
In the early months of 2005 the plaintiff and the two children travelled regularly to Brisbane and spent time with the defendant in his leased premises in Scarborough. The plaintiff emphasized that, notwithstanding the frequency of these trips, there was no agreement between them to resume cohabitation (58). The defendant disagreed and contended in his evidence that there was an agreement between them to that effect in 2004 (209–211). It is not crucial but I prefer the plaintiff’s evidence to the effect that the agreement to resume cohabitation came later and, in particular, followed upon a trip to Melbourne which I now come to.
Relationship resumes in Queensland – July/August 2005 to May 2008
In April or May 2005, the plaintiff and the defendant visited Melbourne with their two children (58, 212). On this occasion the parties discussed reconciliation and resumption of cohabitation. Upon her return to Adelaide the plaintiff discovered that she was in the early stages of pregnancy with the third child, O. She telephoned the defendant with the news and set out some preconditions to them resuming their relationship. The conditions included that the defendant give her some financial independence and pay a health insurance bill. The defendant agreed and the plaintiff then moved to Queensland and, in particular, took up residence with him at Scarborough. That occurred in July or August of 2005 (59). The plaintiff then cancelled the Child Support and her Centrelink benefits (59).
At this time the defendant decided there was a need for two cars and purchased a Mazda Tribute with the help of a loan from the Heritage Building Society (212).
Accordingly, in about mid 2005 the family were settled in the rented premises at Scarborough. The defendant was working with Virgin Airlines and the plaintiff was home pregnant, caring for the house, the children and the defendant when he was home. By arrangement she had access to a $5,000 bank account. The Kensington Gardens house mortgage payments were then, largely, being met from the rent payments. The plaintiff also had savings from Government Family benefits she had accumulated. Also she was, at the time, keeping up payments to Colonial First State Investment (60).
In about December 2005 the parties agreed to purchase a large timber house at Banyo. The purchase price was $433,250. The parties moved in just before Christmas 2005 and paid rent until completion of the purchase which was in March 2006 (60–62, 213–214).
To finance the purchase of the Banyo house, the parties sold the Kensington Gardens house in Adelaide, in February or March of 2006 for $305,000 (214) and procured a loan, secured by a mortgage, from the Bank of Western Australia Limited (“Bankwest”) (62, 215–216 - see also Exhibit P3).
On 16 February 2006 the third child, O, was born (65).
The Final Separation - May 2008
By the time of [O’s] birth there were growing problems between the parties which escalated over a period of approximately two years and culminated in May 2008 when on Thursday, 29 May, the plaintiff and the three children finally left the defendant and returned to Adelaide (90, 100).
In their evidence the plaintiff and the defendant spoke of one tortuous incident after another. In particular, the plaintiff spoke of the defendant coming and going from the house, sometimes for weeks, behaving bizarrely, assaulting her by, for example, giving her a black eye and throwing hot coffee at her, depriving her of financial support, having her mental health and ability to care for the children investigated and secretly dealing with family finances (65–82). The defendant on the other hand spoke of the plaintiff’s financial mismanagement, threatening conduct, harassment of him and her all round inability to cope (220–229).
It is neither necessary nor appropriate to make findings as to these multiple allegations and in particular ascribe blame. However, I find that, as the relationship between the parties disintegrated, as it plainly did between 2006 and 2008, the plaintiff’s role as homemaker, mother, de facto wife and parent to the three children, became more onerous as she persevered in the relationship. Meanwhile the defendant absented himself from the family home from time to time but worked on with Virgin Airlines suffering no diminution of income. In that sense, as the relationship teetered on the brink of collapse, the plaintiff’s contributions, in terms of s 11(1)(a) and (b), increased significantly relative to his.
Aftermath – May 2008 to Trial
Upon returning to Adelaide at the end of May 2008, the plaintiff and the three children lived initially with her mother at Elizabeth Vale. (nb the plaintiff’s father died in 2006) (83). Then, after a period of residing at Mawson Lakes, the plaintiff and her children settled in rental premises in the north eastern suburbs. The three children are at school there (111). That is the present situation.
The defendant was not at the Banyo house when the plaintiff and children left. On 1 June 2008 he discovered that they had left, and assumed, correctly, that they had come to Adelaide (229). Thereafter he resided in the Banyo house (229, 269).
0n 20 June 2008 the defendant instituted proceedings under the Family Law Act seeking a series of orders relating to the custody and care of the three children and as to access or visitation rights (Exhibit P8, 95–96). An order was made on 9 February 2010 by the Federal Magistrates Court, which granted the plaintiff custody of the three children but which provided for the defendant to have access to them (95, see also Exhibit P7). These proceedings have been ongoing. Since separation in May 2008, the defendant has had rather limited contact with his children (96–99).
The defendant claimed, in evidence in chief, that he recommenced paying Child Support in November 2008 (234). However, when confronted with the Child Support Transaction Statement (Exhibit D4), he accepted that the first payment was not made until 29 January 2009 (see 283–284, Exhibit D4).
It is notable also that the defendant stopped making any further repayments due on the loan from Bankwest for the Banyo home after the repayment of the 6 February 2009 (284, 285, see also Bankwest statements Exhibit P3 at statement 33). Indeed, there were no further payments made between 6 February 2009 and the sale of the house in the following year (286).
The defendant accepted that, upon resuming the child support payments, he deliberately took steps to stop paying off the mortgage. He denied that he did so because he felt that he should not have to pay both and explained “… times were tough at that time …” (285).
Apparently PAYG Payment Summaries from Virgin Airlines for the financial years 2006 through to 2011 were discovered but the only Summary which found its way into evidence was that for the 2011 year (306, Exhibit P20). The defendant suggested, vaguely, that his income in the years following the separation was about $50,000 or $60,000 gross per annum. The PAYG Payment Summary from Virgin Australia Airlines Pty Ltd for the year ending 30 June 2011, (see Exhibit P20), showed the defendant earning $59,058 gross per annum or $902.12 net per week. Reconstructing his net salary receipts after the 30 June 2011, by reference to the Heritage Building Society Account – S1, (Exhibit P23), into which his salary was paid, produced an average net salary per week of $1,060.96.
In all, there was no objective evidence to support the defendant’s claim that “times were tough” in early 2009 when he stopped paying the mortgage.
On 15 April 2009 this proceeding was instituted.
In about July of 2010 the house in Banyo in Brisbane was sold for $570,000. The purchase was completed on 19 July 2010. The net proceeds were $408,197.61 (93, 94 – see also settlement statement Exhibit P6). On 18 October 2011, I ordered that the then balance of the net proceeds of sale be paid by the conveyancer to the Suitors Fund by this Court and that there be a payment out of the said Fund of $30,000, to the plaintiff. The balance, taking into account accruing interest, awaits the outcome of this proceeding.
Following the sale of Banyo, the defendant lived with a relative in Brisbane.
On 22 August 2011, the defendant stopped work at Virgin Airlines and purchased a franchise in a real estate photography business (234, 265–266, see also Exhibit P29). He explained that he took leave without pay from Virgin Airlines and his motivation was to enable him to be in Adelaide and be available for his children and indulge his passion for photography. The basis upon which he left Virgin Airlines was surprisingly undocumented (266, 267, 277–280). He said that if the photography business failed he had the “fallback” of possibly returning to Virgin Airlines in Adelaide to supplement his income (310). As indicated the defendant was surprisingly vague about what long service and annual leave entitlements he had with Virgin Airlines and whether or not he could claim them (303, 310–316).
Upon leaving the employ of Virgin Airlines in August 2011 he came to Adelaide where he has been living with his parents and setting up his photography business (274).
I turn now to the identification and evaluation of the assets of the relationship.
Identification and Evaluation of Assets
Proceeds of the sale of the Banyo Property
As at 31 May 2012 there was a sum of $390,264.64 inclusive of interest in the Suitors Fund of this Court which is the proceeds of the sale of the Banyo property less $30,000 which has already been paid out to the plaintiff.
Motor Vehicles
There are three motor vehicles in the pool of assets of the parties. First is the Nissan Bluebird, which the defendant brought to the relationship and still has. Secondly, there is the Mazda 121 purchased new by the plaintiff in about 1998 which she still uses. Thirdly, the defendant purchased a Mazda Tribute upon the parties resuming cohabitation in July or August of 2005. As I understand the evidence he still has possession of that vehicle.
There is no acceptable evidence of the value of these vehicles, save perhaps of a print out from a car valuation website of the Mazda Tribute (see Exhibit D7). That document estimates the value of a 2005 Mazda Tribute as being between $11,070 – $19,044. The only evidence as to the value of the other two vehicles comes from the inadmissible opinions of the parties. Since these opinions were proffered without objection and since the amounts involved are not large, at the risk of replacing guess work with guess work, I will strike a medium. The plaintiff said her Mazda 121 was worth $500 and the defendant’s Nissan Bluebird was worth $5,500. On the other hand, the defendant said that the plaintiff’s Mazda 121 was worth $2,000 and his Nissan Bluebird the same.
I accept the value of the vehicles as follows:
· Nissan Bluebird $ 3,750.00
· Mazda 121 $ 1,250.00
· Mazda Tribute $16,000.00
Household Furniture and Effects
I agree the counsel for the plaintiff’s contention that, there being no detailed evidence of household furniture and contents, let alone any valuation evidence about such items, no amount should be included in the pool of assets on either side. I note, for instance, that each party has appropriated some of the household goods in the course of the relationship fracturing. The defendant did not take issue with that contention (365).
Colonial First State Managed Investment Account –
(see Exhibit P1)
As indicated, the plaintiff set up this investment account in her name in the early years of the relationship. In the course of the relationship and in the years since the end of it, she has transferred funds from that account into, most often, the MECU account, (Exhibit P4), to fund living expenses. The statements from both accounts support that assertion.
I do not accept that the reduction of the balance of funds in that account from $58,515.68 as at 31 March 2008, to $10,118.60 at the 30 June 2011, is a result of any inappropriate dealing or expenditure. Rather the evidence satisfies me that the expenditure was for the plaintiff’s ordinary living expenses. In all, I accept that the balance as at 30 June 2011 of $10,118 is an appropriate sum to allow in the pool of assets.
Other Plaintiff’s Bank Accounts – MECU and ANZ –
(Exhibits P4 and P5)
The plaintiff tendered in evidence not only the MECU statements (Exhibit P4), but also the statements of an ANZ access account. The MECU account was a working account in which very little has accumulated since separation. For instance, the balance as at 30 September 2011 was $12.03. So too the ANZ account, (Exhibit P5) was an account through which the plaintiff paid rent. It has not held any significant amounts of money. The balance as at 11 March 2010 was $102.27.
Plaintiff’s Superannuation Entitlements –
(Exhibit P11)
The plaintiff had the following two superannuation entitlements:
AMP Eligible Rollover Fund
– balance as at 30 June 2011 $ 2,094.16Super SA
– balance as at 30 June 2011 $29,078.94Defendant’s Superannuation Entitlements –
(Exhibits P17 and P21)
The defendant had the following superannuation entitlements:
Recruitment Super
– balance as at 30 June 2011 $ 3,864.09Sun Super
– balance as at 12 October 2011 $78,445.45Joint Bank Account –
(Exhibit P22)
As at 15 October 2011, in the Heritage Building Society Account 10701036-S1 in the joint names of the parties, there was a balance of $84.86 (see Exhibit P22).
Defendant’s Bank Accounts –
(Exhibits P13, P14, P15, P24 and P25)
First, the defendant’s Heritage Building Society Account 9947469 S1 statements (Exhibit P13) reveal a balance of $1,817.29 as at 10 June 2011. This was the defendant’s “transactional account” or working account, into which his pay from Virgin Airlines was deposited and it was the primary source of funding for his day to day living expenses. The plaintiff accepts what the defendant says, about this account, namely that by the time of trial the balance was substantially reduced. The plaintiff suggests that a nominal amount of $500 in respect of this account should be credited into the asset pool. I agree.
Secondly, as at 30 September 2011, the defendant had a total of $194.19 in two Qantas Staff Credit Union savings accounts (Exhibit P15).
Thirdly, as at 15 October 2011, the defendant had a total of $2,309.82 in two National Australia Bank accounts (Exhibits P14 and P25).
Fourthly, the plaintiff accepts, that as at the date of trial, the Heritage Building Society Account in the name of the defendant being 9947469-S26, (see Exhibit P24), had effectively a nil balance, notwithstanding that the statement shows that as at August 2011, there was $10,000 in that account. The plaintiff accepts the defendant’s evidence that that sum was borrowed by him, put into the account and later withdrawn, inter alia, to pay a franchise fee for the photography business. There is no suggestion of anything sinister about those transactions and accordingly there is no amount of money to be recorded in respect of this account in the asset pool.
Annual Leave Entitlements of Defendant
The defendant said that he was entitled to “… around three or four weeks’ …” annual leave from Virgin Airlines (310–311). He agreed that he could possibly claim the money equivalent of it (311). He agreed also that there was a loading of 11 per cent on his annual leave (304).
There is no documentary evidence from Virgin Airlines as to the defendant’s annual leave entitlement.
In the circumstances, however, I will regard entitlement as a present asset, particularly as the defendant has apparently kept his relationship with Virgin Airlines alive (313). What is the value of this asset? In his evidence the defendant did not disagree with the calculation put to him by plaintiff’s counsel, Mr Heinrich, that the leave entitlement would be worth “… as much as $3,800 …” (312–313). In his final written address counsel Mr Heinrich’s calculation increased to “… at least $4,500 (see [15] of written final address).
The defendant’s response to that figure in his final address was as follows:
“… I did read those figures. Once again, I didn’t contact my employer to ask what I did have owed. If Ms F’s entitled to my leave so be it” (366).
In my view, both sets of calculations, namely the calculation put in cross examination by counsel Mr Heinrich, (311–312) and the calculation put by him in his final address at [15], have validity. Nonetheless, there are some unknowns. Was the relevant period of leave three or four weeks? Does the leave, if not taken, accumulate from year to year? Is it the case that the defendant had taken no annual leave in the relevant period? All these questions would have been answered by Virgin Airlines had the defendant or his previous lawyers made proper enquiries from that enterprise.
I will reflect my queries in the reduced figure I allow. I accept the sum of $3,500 as the value of the defendant’s unused and accrued annual leave.
Long Service Leave Entitlement of Defendant
The defendant commenced work with Virgin Airlines in February 2004 and took leave without pay commencing on 22 August 2011 – a period of seven and a half years continuous service.
The defendant was employed in Queensland. The material portions of Section 43 of the Industrial Relations Act 1999 Qld provide:
(3)An employee who has completed at least seven years continuous service is entitled to a proportionate payment for long service leave on the termination of the employee’s service.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9) In this section –
proportionate payment means a payment equal to the employee’s full pay for a period that bears to 8.6667 weeks the proportion that the employee’s period of continuous service (stated in years, and a fraction of a year if necessary) bears to 10 years
Accordingly, as at August 2011, when he stopped work, the defendant had an entitlement to 70 per cent of 8.6667 weeks which was the leave entitlement to which he could have been entitled after 10 years. So 70 per cent of 8.6667 is 6.0669 weeks. What then is the value of that entitlement?
The PAYG payment summary for the 2010-2011 year, Exhibit P20, shows that the defendant was earning an average of $902.12 net per week. For the period after 30 June 2011, until he stopped work in August 2011, the defendant’s Heritage Building Society Account S1, (Exhibit P23), which received his net salary from Virgin Airlines, disclosed $1,160.96 net per week. Using a net weekly salary of $1,000 per week results in an estimated present entitlement to Long Service Leave of $6,066.90, (ie $1,000 net per week x 6.0669 weeks = $6,066.90). I will include that figure in the asset pool.
Occupation by Defendant of the Banyo House
The plaintiff and the three children left the Banyo house on 29 May 2008. The defendant, who was not home at the time, discovered that they had left on 1 June 2008. Thereafter he occupied the Banyo house until the completion of the sale of the house on 19 July 2010 (229, 269, 93, 94 – Exhibit P6).
The plaintiff submitted that the defendant should pay an “occupation fee” for his rent free occupation of the family home. That such a fee is payable, is recognised by a number of authorities (see McKay v McKay [2008] NSWSC 177; Callow v Rupchev [2009] NSWCA 148; H v E [2009] SADC 76; and F v D [2010] SADC 92 per Beazley, J). What justifies this adjustment is the fact that the party who occupies the home rent free, after the breakup, thereby obtains a financial advantage compared with the other. All other things being equal, the disadvantaged party should be credited with one half of the rent on the basis that he or she is effectively the joint owner.
Whether, as a matter of justice and equity any such adjustment is to be made at all, and if so, the extent of it, would depend on whether the party occupying the family home rent free has been otherwise contributing, for instance by paying:
·the mortgage on the house; and
·the outgoings on the house such as rates, taxes, insurance and costs of upkeep.
The defendant ceased paying the mortgage after February 2009. There was no evidence about the payment of outgoings such as rates and taxes, but it seems likely that the defendant made those payments. I will assume that was the case.
In all the circumstances an adjustment for the defendant’s rent free occupancy of the Banyo house is called for. The “blow out” in the moneys owed to Bankwest under the mortgage, by reason of the failure to keep up the payments, was $12,837.11 (see Exhibits P3 and P6). The plaintiff by her counsel, submitted that justice and equity would support an adjustment of that sum against the defendant in favour of the plaintiff. There was no evidence of the appropriate level of rent for such a property at the relevant time. However, if a nominal rent of $250 per week was selected, then, on the basis that the defendant occupied the house for two years and two weeks (ie from 1 June 2008 until settlement on 19 July 2010), the total rent payable would have been $26,500 (ie 106 weeks x $250 per week = $26,500). On that basis, the plaintiff should be credited with one half of that sum, namely $13,250. I note that in his ex tempore decision in F v D [2010] SADC 92, Beazley DCJ followed a similar line of reasoning, using a nominal rent figure of $200 per week.
I make an adjustment in favour of the plaintiff against the defendant, under this heading of Occupation Fee in the lesser sum, namely, $12,837.
Add Back for Defendant’s Legal Fees
Since the separation the defendant has borrowed money to pay, inter alia, legal fees. The exact sum was not specified (292–303). The plaintiff seeks an adjustment in her favour of $9,500 on the basis that the servicing of the borrowing which included a sum for legal costs, has diminished the monies which otherwise would have been part of the asset pool.
Family Court authorities have consistently held that:
·first, monies borrowed by one party after separation to pay legal fees should be ignored, for the purposes of determining the quantum of the asset pool. (see NHC v RCH (2004) FLC 93–204); and
·secondly, monies expended by one party on legal fees which would otherwise be available for division between the parties should be “added back” into the asset pool (see Gollings v Scott (2007) FLC 93 –319.
The rationale is clear and needs no elaboration.
In this case the plaintiff contends, not merely, that the debt and/or the cost of servicing it, be ignored for the purpose of fixing the asset pool but that $9,500 be added back.
I am not prepared to so order. The argument is predicated upon the assumption that the cost of servicing the debt, namely $9,500 would otherwise be available for division. If I were satisfied that the debt was wholly for the purpose of paying legal costs the claim might have some justification. But the borrowing was not only used to pay legal fees, but apparently was also to meet some of the costs of the photography business and ordinary living expenses. The proportions were not specified (292–303).
I indicate that I will, however, ignore the borrowing for the purpose of ascertaining and valuing the asset pool.
Liabilities
There are no current liabilities to be brought to account.
As indicated, I decline to take into account the loan from the Heritage Building Society for the mix of purposes identified in the evidence including legal fees, expenses of the photography franchise and cost of food, clothes, petrol and travel (299).
The following table sets out the assets and their values at about the time of the hearing:
Asset Value $ Proceeds of sale of Banyo property less interim payment including interest 391,050 Interim payment from proceeds of sale of Banyo to plaintiff 30,000 Nissan Bluebird (defendant) 3,750 Mazda 121 (plaintiff) 1,250 Mazda Tribute (defendant) 16,000 Household Furniture and Effects (joint) Nil Colonial First State Managed Investment A/c (plaintiff) (P1) 10,118 MECU Account (plaintiff) (P4) 12 ANZ Access Account (plaintiff) (P5) 102 AMP Eligible Rollover Fund (plaintiff) (P11) 2,094 Super SA (plaintiff) (P11) 29,078 Recruitment Super (defendant) (P17) 3,864 Sun Super (defendant) (P21) 78,445 Heritage Building Society Acc – S1 (joint) (P22) 85 Heritage Building Society Acc – S1 (defendant) (P13, 23) 500 Qantas Credit Union (defendant) (P15) 194 National Australia Bank Accounts x 2 (defendant) (P14, 25) 2,309 Heritage Building Society Acc – S26 (defendant) (P24) Nil Annual Leave entitlement 3,500 Long Service Leave entitlement 6,066 Total Property Pool not including Add Back for Occupation Fee $578,417 Occupation Fee Add Back for benefit of plaintiff 12,837 Contributions
Material Contributions – Section 11(1)(a) of the said Act
First I deal with the material contributions both direct and indirect by the parties to the property and financial resources of each other (see s 11(1)(a) of the said Act).
The parties started out, in financial terms, on an equal footing. Neither of them brought to the relationship, when it started in November 1996, a great deal more than the other. They both worked hard in the early part of the relationship supporting one another and acquiring some household goods. I regard their respective contributions to the acquisition of their first major asset – the Kensington Gardens house – as also equal. The plaintiff’s role then changed upon the birth of T on 5 January 2002. She stopped work and became homemaker and parent. In that role she contributed indirectly to the material advancement of both of them. The defendant was able to exploit in full his considerable earning capacity culminating with over seven years of continuous service with Virgin Airlines. Of course, in return, he contributed by providing financial support for the plaintiff and their children.
Accordingly, at the risk of drawing attention to the obvious, the plaintiff has indirectly contributed to the acquisition of the Banyo home and also to such other acquired material possessions such as household goods, motor vehicles, savings and those financial benefits attaching to the defendant’s employment such as superannuation and leave entitlements, both annual and long service.
Further, during the long separation, (ie from January 2003 until July/August 2005), and since the final separation from the 29 May 2008, a total period of almost six and a half years, the plaintiff has continued to care for the children thereby enabling the defendant to continue working full time.
Accordingly, thus far I would value the respective “material contributions” both direct and indirect, as equal.
I leave such matters as opportunities lost and needs and means to be dealt with under the final heading “other relevant matters” (see s 11(1)(d) of the said Act).
Non Material Contributions – Section 11(1)(b) of the said Act
I turn to the second consideration, namely, the contributions which are not so obviously material, such as “homemaking” and “parenting” (see s 11(1)(b) of the said Act).
Since the birth of T on 5 January 2002, the plaintiff has been fully occupied as homemaker and parent.
In view of the choice of roles, (ie defendant engaging in paid employment, plaintiff remaining at home) and bearing in mind that the defendant’s work involved him being absent from home regularly, the plaintiff inevitably became the principal homemaker and parent. Nonetheless the plaintiff’s contributions in this respect have been more than usually onerous. During the periods of separation, the plaintiff was effectively the sole parent and carer. The same has been so since the final separation at the end of May 2008.
Following the reconciliation in July/August 2005, when the parties cohabited, first in Scarborough and then in Banyo, the defendant was not only away from home working but also absented himself for weeks on end as the relationship slowly deteriorated. The plaintiff complained of loneliness, particularly in the troublesome period from early 2006 to mid 2008. I accept her evidence that the defendant would disappear from time to time.
Whatever the reason and notwithstanding who was to blame, from the birth of the third child, O, on 16 February 2008, the plaintiff was all but the sole parent.
Since the final separation, the defendant accepts that he has hardly seen his children. Of course, it must be accepted that he has been unable to do so by reason of having to work interstate. Nonetheless, I accept that the plaintiff in this time has borne the brunt of the care of the children with its attendant expense.
In the periods of separation, the plaintiff has depended upon Family Benefit payments and payments of Child Support.
In assessing the contribution of the custodial parent, the Court is entitled to have regard to the financial support given by the other. I refer to what I have said on this topic at [23] above.
Despite a lack of evidence of the cost of maintaining a child, counsel Mr Heinrich fashioned an argument in which he selected child maintenance costs which were canvassed by Bleby J in Arnold v Dalton (supra) at 493–494 and utilising those figures argued that the level of financial support provided by the defendant to the plaintiff has been deficient to the tune of $37,240. He said that consequently there should be an adjustment of that dimension in favour of the plaintiff. I doubt the correctness of borrowing such factual evidence from another case, and in any event, I do not accept the argument. Subject to the following comments, the defendant eventually paid the Child Support fixed by the Agency. There was no foundation laid in the evidence for any wider argument about whether or not the Child Support payments were adequate to cover the expense of the child.
However, there are some unsatisfactory aspects to the defendant’s contributions to the financial support of the children namely:
·following the final separation at the end of May 2008, the defendant did not commence paying Child Support until 29 January 2009 (283, 284 and Exhibit D4); and
·following the defendant ceasing work at Virgin Airlines in August 2011, the level of Child Support by reason of him having no income had dropped to the nominal figure $30.83 (268, Exhibit D4).
I will reflect the above findings in the valuation of the plaintiff’s contribution as homemaker and parent.
In all, the plaintiff’s contributions under s 11(1)(b) of the said Act, have been much greater than those of the defendant.
“Other Relevant Matters” – Section 11(1)(d) of the said Act
I turn to the third and final consideration, namely, “other relevant matters” (see s 11(1)(d) of the said Act).
The plaintiff’s financial circumstances now and in the foreseeable future are poor. She is dependant on Child Support from the defendant which is presently at a token level because of his lack of income. Apart from that she is dependent on Government allowances. Her responsibilities are considerable. She has three young children to house, clothe, feed and educate. The children are:
·T (DOB 5.1.02)
·S (DOB 19.9.03)
·O (DOB) 16.2.06)
The plaintiff is currently looking for work and has in her evidence described the difficulties she has found obtaining suitable employment (108, 110).
The defendant, on the other hand, has had no such problems. He is a free agent exploring a new career, with the “fall back” of returning to Virgin Airlines if that new career does not work out.
Further the plaintiff, by her contribution over the years, has not only forsaken her original career as a travel consultant, but by reason of, inter alia, her commitments to the children, will have difficulties returning to employment. I refer to what I said at [138] in Love v Chidley (supra) on this topic, which was adopted by the Full Court in H v G [2005] SASC 344 per Layton J at [127].
If one de facto partner effectively sacrifices his or her earning capacity during the relationship so that at the end of the relationship, by reason of circumstances such as age and the state of the labour market, he or she is precluded from gainful employment, then that is to be regarded as a “contribution” within the meaning of s11(1)(b) and or is a “relevant matter” within the meaning of s11(1)(d); (see Ferris v Winslade (supra) at 747; In the Marriage of Best (1993) 16 Fam LR 937 at 962; In the Marriage of Clauson (1995) 18 Fam LR 693; In the Marriage of Kennon (1997) 22 Fam LR 1 at 36)).
This consideration of lost earning capacity finds expression as “... opportunities lost by ... by reason of ... contributions ...” in the judgment of Hodgson J at first instance in Dwyer v Kaljo (supra) at 793 which was approved by Gleeson CJ and McLelland CJ in Equity at page 764 of Evans (supra).
Conclusion – Division of Property – Orders
The property which is to be divided and its value at about the time of trial is summarised in the table at [118] above.
Justice and equity demands that the property be divided on a basis which favours the plaintiff. The contributions of the plaintiff in s 11(1)(b) of the said Act, outweigh those of the defendant and the other relevant matters in s 11(1)(d) of the said Act also weigh heavily in the plaintiff’s favour.
The plaintiff is to receive 65 per cent of the particularised property pool together with the sum of $12,837, being the “add back” sum to which she is entitled for the occupation by the defendant of the family home.
I will hear the parties as to the precise terms of the Orders which give effect to this decision and look forward to the production of a Minute of Order.
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