FALCONE & FALCONE
[2011] FMCAfam 138
•11 March 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FALCONE & FALCONE | [2011] FMCAfam 138 |
| FAMILY LAW – Parenting – orders made predominantly by consent for the parties’ son to live with the wife and spend significant and substantial time with the husband. FAMILY LAW – Property – husband’s significant initial contribution found to attract a 15 per cent loading in his favour – wife’s future needs pursuant to section 75(2) factors found to attract a 15 per cent loading in her favour – orders made for an equal division of the parties’ property and for there to be a super splitting order in the wife’s favour with a base amount calculated on the basis that each party retain 60 per cent of their current superannuation entitlements. |
| Family Law Act 1975, ss.75, 79 |
| Williams & Williams [1985] HCA 52 Norbis v Norbis (1986) FLC 91-712 Pierce and Pierce (1999) FLC 92-844 Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 B & B [2005] FamCA 624 BAR and JMR (2005) FLC 93-231 C v C (2005) FLC 93-220 L v L (2006) FLC 93-254 Kitman & Kitman [2008] FamCAFC 166 Pera & Pera (2008) FLC 93-372 |
| Applicant: | MR FALCONE |
| Respondent: | MS FALCONE |
| File Number: | MLC 8567 of 2009 |
| Judgment of: | Bender FM |
| Hearing dates: | 16, 17 & 18 February 2011 |
| Date of Last Submission: | 18 February 2011 |
| Delivered at: | Melbourne |
| Delivered on: | 11 March 2011 |
REPRESENTATION
| Counsel for the Applicant: | Ms Phelan |
| Solicitors for the Applicant: | Kempsons Lawyers |
| Counsel for the Respondent: | Ms Sleeth |
| Solicitors for the Respondent: | Borchard & Moore |
| Counsel for the Independent Children’s Lawyer: | Ms Agresta |
| Solicitors for the Independent Children’s Lawyer: | Victoria Legal Aid |
ORDERS
PARENTING – BY CONSENT SAVE FOR ORDERS 5(c), 5(d), 5(e) & 6 WHICH ARE ORDERS OF THE COURT
The wife and husband have equal shared parental responsibility for the child [X] born [in] 2006 ("[X]") save in respect of:
(a)education; and
(b)non urgent medical procedural issues.
In respect of matters touching on [X]'s education, including choice of primary and secondary schooling the parties :
(a)provide each other with a written proposal/position and in the case of choice of schooling such proposal be provided by 30 June in the year prior to the commencement of prep year and first year of secondary school;
(b)on exchanging proposals the parties make a genuine effort to consult on the issue to reach agreement;
(c)in the event that no agreement is reached the parties attend upon a mediator at their joint expense, and make a genuine attempt to resolve the issue with the assistance of the mediator; and
(d)in the event that the parties are not able to reach agreement through the mediation process the wife have sole responsibility for making the final decision and in the event that the same involves the choice of a private school not a government school, the wife bear the full cost of private schooling.
In respect of significant medical issues (other than urgent or emergency issues) the parties:
(a)consult separately (or together if the parties agree to do so) with [X] 's treating medical provider/specialist on the issue;
(b)provide to the other party notice of their view in regard to the issue in writing as soon as practicable after consultation with the medical provider or specialist;
(c)if appropriate and time permits engage the services of a mediator to help them resolve the issue; such mediator to be at their joint expense; and
(d)if following this process the parties cannot reach agreement the wife have sole responsibility for making the final decision on the issue.
[X] live with the wife.
The husband spend time and communicate with [X] as follows:
DURING 2011:
(a)each alternate weekend from 4.45 pm Friday to 4.45 pm Sunday commencing 18 February 2011;
(b)in the first term holidays the husband's usual weekend time continue;
(c)in the second term holidays the husband's usual weekend time continue and extend to 5.00 pm Monday;
(d)in the third term holidays the husband's weekend time continue and extend to 5.00 pm Tuesday;
(e)in the long summer holiday period 2011/2012 the usual weekend time continue and extend to 5.00 pm Wednesday;
FROM 2012 COMMENCING THE SECOND FRIDAY OF THE FIRST TERM 2012
(f)from after school Friday to before school Monday (or Tuesday, if the Monday is a non school day) each alternate week;
(g)from after school Tuesday or 3.00 pm if a non school day to before school Wednesday in the other week;
(h)for one half of the school term holidays and failing agreement the first half;
(i)for the long summer holidays 2012/2013 each alternate week from 5.00 pm Sunday to 5.00 pm the next Sunday;
(j)for the long summer vacation in 2013/2014 and onwards, for one half of the holidays and failing agreement the first half in 2013/2014 and each alternate year thereafter and the second half in the other alternate years;
(k)from 4.00 pm Christmas Eve to 4.00 pm Christmas Day 2011 and each alternate year thereafter and from 4.00 pm Christmas Day to 6.00 pm Boxing Day 2012 and each alternate year thereafter;
(l)
from after school (or 3.00 pm if a non school day) to 6.00 pm on 18 May 2011 and each alternate year thereafter and from after school (or 3.00 pm if a non school day) to 6.00 pm on
17 May 2012 and each alternate year thereafter;
(m)from 9.00 am to 5.00 pm on Father's Day and the husband's time be suspended from 9.00 am Mother's Day and from 3.00 pm to 6.00 pm on the husband's birthday and the husband's time be suspended between 3.00 pm and 6.00 pm on the wife's birthday;
(n)by telephone with the husband calling [X] each Tuesday and Thursday between 6.00 pm and 6.30 pm. The wife make [X] available to receive the telephone call on a landline or mobile telephone number; and
(o)for such further and other times as agreed between the parties in writing
All changeovers that do not occur at school or Gordon Care [F] take place at the [F] Police Station.
The wife provide to the husband details of:
(a)the names, address and contact details for [X]'s treating doctor, paediatrician (if any) and any other medical specialist and [X] 's dentist;
(b)[X]'s kindergarten and school;
(c)details of any other organisation or provider of extra curricular activity or events in which [X] is engaged in on an ongoing basis; and
(d)any significant medical appointments/consultations scheduled with [X]'s treating medical practitioners and do so as soon as practicable after such appointments/consultations are arranged by her.
The husband be at liberty to consult directly and separately with the medical practitioners as to any medical issue affecting [X] at his expense if any, if he is unable to attend such appointments conjointly with the wife.
It is declared that pursuant to section 68Q of the Family Law Act 1975 to the extent that these Orders are inconsistent with the Intervention Order made on 20 September 2010 by the Magistrates Court of Victoria these Orders prevail and the Intervention Order is invalid.
The wife provide to the husband copies of any medical advices, assessments or reports prepared by medical specialists in respect of [X] as soon as practicable upon receiving same.
The husband be at liberty to attend all school/kinder or special events to which parents are in the usual course invited subject only to any directions to the contrary from the kindergarten or school authorities regardless of whose care [X] is in at a particular time.
The wife forthwith authorise and keep authorised [X]'s kindergarten and school to provide to the husband all information relevant to [X]'s education and welfare and authorisation for the purposes of these Orders is effected by the wife providing to the kindergarten and school a copy of these Orders and it is noted that such information includes newsletters, order forms for photographs, reports, notes etc.
The wife and husband keep each other advised of a current residential address and a contact telephone number.
The wife and husband advise each other immediately in the event that [X] suffers a significant illness or injury in their care or in the event he requires hospitalisation and in the event [X] is hospitalised the other parent is at liberty to attend at the hospital and is at liberty to consult with the hospital staff as to the matters touching on [X]'s health and welfare.
AND THE COURT NOTES
A.The parties are each aware that the husband is facing criminal charges and agree to these Orders with that knowledge.
B.The parties acknowledge that from 2012 all weekend and midweek time ceases during school holidays and resumes at the conclusion of the holidays as if the pattern had not been interrupted.
PROPERTY – ORDERS OF THE COURT
Subject to order 17 herein the husband pay to the wife the sum of $202,871.00 (“the payment”) on or before the 11th day of May 2011 (“the date”).
Contemporaneously with the payment:
(a)the wife do all such acts and things and sign all such documents as may be required to transfer to the husband at the expense of the husband all of her right, title and interest in the real property situate at and known as Property L (“Property L”); and
(b)the husband indemnify the wife against all payments and liability pursuant to the mortgage to RAMS (“the mortgage”) and all apportionable rates, taxes and outgoings of or with respect to the real property of whatsoever nature and kind.
The husband shall notify the wife in writing no later than 4.00 pm on 11 April 2011 whether he is able or unable to purchase the wife’s interest in Property L pursuant to order 15 herein.
If pursuant to order 17 herein, the husband notifies the wife that he is unable to purchase the wife’s interest in Property L pursuant to order 15 herein then the real property be forthwith sold altogether out of Court (“the first sale”) and upon completion of the first sale, the proceeds of the first sale be applied:
(a)firstly to pay all costs, commissions and expenses of the sale;
(b)secondly to discharge the mortgage and any other encumbrance affecting the real property;
(c)thirdly the balance then remaining be divided in the proportion of
(i)50 per centum thereof to the husband; and
(ii)50 per centum thereof to the wife
save that from the husband’s 50 per centum he shall pay to the wife the sum of $8,396.50.
If pursuant to order 17 herein, the husband notifies the wife that he is able to purchase the wife’s interest in Property L pursuant to order 15 herein and the whole of the payment has not been made by the date then the husband sign all documents and do all things necessary to transfer to the wife the real property to be held on trust for sale (“the second sale”) and upon completion of the second sale, the proceeds of the second sale be applied:
(a)firstly to pay all costs, commissions and expenses of (the said trust transfer and) the sale;
(b)secondly to discharge the mortgage and any other encumbrance affecting the real property;
(c)thirdly so much of the payment as is then outstanding together with interest thereon at the rate of 11 per centum per annum adjusted monthly from the date to the wife; and
(d)fourthly the balance to the husband.
Pending the payment or completion of either of the first sale or the second sale:
(a)the husband have the sole right to occupy the real property and during such right of occupation the husband pay all instalments pursuant to the mortgage and all rates and taxes and like apportionable outgoings of the real property as they fall due;
(b)the parties hold their respective interests in the real property upon trust pursuant to these orders; and
(c)neither party encumber the real property without the consent in writing of the other party.
The [E] Superannuation Board (“[E]”) being the Trustee of the [E] Superannuation Scheme (“[S]”) (“the Fund”) is directed to split the husband’s interest in the Fund pursuant to section 90MT of the Family Law Act 1975 as herein set out.
Pursuant to section 90MT(4) of the Family Law Act 1975, the amount of $76,443.60 be allocated as the base amount to the wife out of the interest of the husband in Fund.
Pursuant to section 90MT(1)(a) of the Family Law Act 1975, when the Trustee of the Fund makes a splittable payment out of the husband’s interest in the Fund, the Trustee shall:
(a)pay to the wife the entitlement calculated in accordance with Part VI of the Family Law (Superannuation) Regulations 2001 calculated from the base amount of $76,443.60 (provided that such base amount shall not exceed the value of the interest determined under section 90MT(2) of the Family Law Act 1975); and
(b)make a corresponding reduction in the entitlement that the husband would otherwise have had in the Fund but for these orders.
The operative time for the splitting of the Fund shall be given four days after the Trustee of the Fund has been served with a sealed copy of this order.
The Trustee do all such acts and things and sign all necessary documents to fulfil any obligation set out in the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 so that the wife’s entitlement can be calculated and paid to her in accordance with these orders.
Until the payment of the interest of the wife pursuant to these orders, the husband be and hereby is restrained from doing any act or thing or giving any direction which would have the effect of reducing or prejudicing the entitlements of the wife pursuant to this order.
If as a result of termination of his employment, the husband becomes entitled to a benefit prior to the [E] making a payment under section 22F of the [E] Superannuation Act 1986, he shall provide to the [E] all such forms as shall be necessary to enable the [E] as Trustee to determine the nature and quantum of the superannuation entitlement and any other related information it may reasonably request within seven days of that entitlement arising.
There be liberty to apply to each party and the Trustee in relation to the implementation of the orders affecting the superannuation interest.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)
each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) owned by or in the possession of such party as at the date of these orders (the furniture, personal possessions, and like chattels in Property L being deemed to be in the possession of the husband save for the items listed in Annexure A hereto which the husband shall make available for collection by the wife or her nominated agent on or before 4.00 pm on
31 March 2011);
(b)insurance policies remain the sole property of the owner named thereon;
(c)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(d)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
IT IS NOTED that publication of this judgment under the pseudonym Falcone & Falcone is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
ANNEXURE A
Wedding ring and engagement ring *
LCD TV and LCD TV Unit
Pioneer DVD Player
Glass Desk
Chest of Drawers (wife’s)
Two bedside drawers
Two white adjustable stools
Six man tent
Folding Trestle Table *
Camping Cupboard *
Twin Air Mattress *
Laptop Computer
Microwave
Clothes Dryer
Small Fridge
Two Willow Eskies
Wife’s Mountain Bike
Tupperware *
Christmas Tree & Decorations (already boxed) *
Share of DVD’s (already boxed) *
Mini CD Player (already boxed) *
Share of CD’s (already boxed) *
Photos, Albums and frames (already boxed) *
Cook Books (already boxed) *
Baking Goods *
Barmix & Attachments (already boxed) *
Share of Platters including Large white Platter (already boxed) *
Share of Cooking Pots *
Share of Cooking Utensils including Wilshire Utility Knife (already boxed) *
Share of Drinking Glasses *
S & R Cutlery Set *
Table Linen (already boxed) *
White Dinner Set (already boxed) *
Set of 4 Coloured Cups and Saucers *
Glass water jug *
Stainless Steel Ice Bucket *
Slow Cooker *
White Toaster & Kettle *
Electric Hot Plate & Stand *
Electric Wok *
8 Pot Plants *
Share of Towels (already boxed) *
2 sets of Queen Bed Sheets (white & beige) *
2 Queen Doona Covers (white & beige/black) *
1 Queen bed Doona *
[name omitted] belongings
Wife’s remaining clothing and personal belongings (if any)
Blue Fit Ball
Exercise Bean
Chair Massager *
Share of Cushions
Ikea Bookshelf
Razor Scooter
Picnic Basket
[X]’s FURNITURE/ITEMS
Cot and cot mattress
Yellow Car
Silver rechargeable quad bike (including charger)
Safe and sound new born car seat (boxed in shed)
Red bouncing car
Boxed up baby toys (boxed in shed)
Jolly Jumper
Baby bike seat
Baby borne carrier
Baby blankets (bagged in clear carry bag)
Craft box
Plastic Climbing frame and slide
*Husband says already taken by wife and denies knowledge of their whereabouts
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 8567 of 2009
| MR FALCONE |
Applicant
And
| MS FALCONE |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter involves the adjustment of property between the parties following the breakdown of their marriage in July 2009.
Initially the matter involved not only property issues but also the living arrangements for the parties’ four year old son [X] born [in] 2006 (“[X]”). The parties however were able to reach agreement as between themselves and final orders were made, predominantly by consent, in relation to [X]’s living arrangements at the commencement of the hearing of this matter.
In relation to the property matter, the husband is seeking orders whereby he pays the wife the sum of $150,000.00 and she transfers to him her interest in the former matrimonial home situate at Property L (“Property L”). The husband argues that this amount represents 40 per cent of the equity in the former matrimonial home.
When the parties commenced cohabitation in April 2003, the husband owned a property at Property C (“Property C”). Property C was initially used as the security for the loans taken out by the parties to buy the land on which the former matrimonial home at Property L was built. Property C was sold in October 2004 and the net proceeds of sale of $181,650.93 were utilised to reduce the parties’ borrowings on Property L.
The husband argues that because of his greater initial contribution he should receive a greater proportion of the parties’ matrimonial assets.
The husband also seeks orders that there be a super splitting order against his superannuation with the [E] Superannuation Scheme (“[S]”) such that a base amount of $62,332.50 be allocated to the wife. This figure is calculated on a 50:50 division of the parties’ respective superannuation contributions during the period of cohabitation.
The wife is seeking orders that the husband pay to her an amount equivalent to 60 per cent of the equity in the former matrimonial home. Whilst acknowledging the husband’s greater initial contribution, it was argued that this is offset by the wife’s post-separation contribution in caring for [X] and by way of section 75(2) factors in her favour.
The wife also sought orders that there be a super splitting order against the husband’s superannuation entitlement with [S] such that there be a base amount of $91,414.50. This figure is calculated on an equal division of the parties’ current superannuation entitlements.
Background
The husband was born [in] 1972 and is 38 years old. The husband was a [occupation omitted], having joined [employer omitted] in 1995. He was dismissed from [employer omitted] for [omitted] in July 2010, having been removed from [employment omitted] on full pay in December 2008 whilst [omitted]. He is currently employed on a casual basis as a [omitted] for [company omitted]. He has not re-partnered.
The wife was born [in] 1973 and is 37 years old. She is employed on a part-time basis as a [omitted]. She has not re-partnered.
The parties commenced cohabitation in April 2003, married [in] 2005 and separated on 28 July 2009 when the wife left the former matrimonial home with [X].
After separation [X] remained in the primary care of the wife and spent regular time with the husband.
The final orders for [X]’s care made at the commencement of this hearing provide for the parties to have equal shared parental responsibility for [X], save for education and non-urgent medical issues which the wife shall determine in the event the parties are unable to agree, for [X] to live with the wife and spend time with the husband in 2011 each alternate weekend from Friday to Sunday and from 2012, each alternate weekend from after school Friday to before school Monday, each alternate Tuesday night, for half of the school holidays as well as provision for special occasions.
As noted earlier in this judgment, at the commencement of cohabitation the husband owned Property C which he had purchased in 1999. The home was fully furnished. The husband also owned a 1994 Mazda MX6.
The wife owned a Hyundai motor vehicle which was subject to finance on which $17,228.61 was then outstanding. This loan was paid off during the marriage. The wife had no other assets of significance.
The husband was employed as a [omitted] earning $4,700.00 per month. The wife was working for [omitted] earning $2,500.00 per month.
Prior to [X]’s birth, the parties were both in full-time employment with the husband earning, on average, double that of the wife. The husband gave evidence of the wife experiencing long periods of unemployment prior to [X]’s birth. The wife’s evidence of her employment history, being that she was fully employed up until [X]’s birth, was greatly more compelling. After [X]’s birth the wife was his primary carer but did return to part-time employment as a [omitted] when he was
8 months old. She continues in that part-time employment.
In 2003 the parties purchased the Property L block. They entered into a contract to build a home on the property. Both loans were taken out through [P] and Property C was used as security. Property C was sold and on settlement in September 2004, the parties moved into
Property L and the net proceeds of sale of Property C of $181,050.53 were paid off the Property L loan with [P].
At the commencement of cohabitation the husband’s superannuation entitlement with [S] was $71,394.00. The wife had superannuation of $5,230.00.
After [X]’s birth, the husband traded in his Mazda and drew down $18,000.00 on the parties’ mortgage to purchase a Commodore motor vehicle. The husband has retained this vehicle.
During the marriage the parties were able to make mortgage payments in excess of the minimal payments required such that at separation they had reduced the mortgage on Property L to $136,258.85. This also left the parties with the facility to draw down against the mortgage on Property L.
During the marriage the husband’s mother and stepfather “lent” the parties some money. It was the husband’s evidence that his parents lent them $15,500.00. The wife was of the view that a lesser amount was received from the husband’s parents and that at least part of that amount was a “gift”. Prior to separation the parties repaid the husband’s stepfather $5,000.00. It was the husband’s evidence that in September 2009, his mother asked that he repay the balance of $10,500.00 owing to them to enable her to assist the husband’s sister and brother-in-law as they were in financial difficulty as his brother-in-law had lost his job. Accordingly, the husband drew down against the mortgage to repay this amount to his mother.
At the time of the final hearing the amount outstanding on the mortgage was $161,051.00. It was the husband’s evidence that “on advice” he stopped making mortgage payments sometime in 2010 and the mortgage commitments were met from the parties’ redraw facility.
At separation there was a dispute between the parties as to division of chattels. The husband’s evidence is that at separation the wife and her parents took “boxes” of the wife’s personal chattels and papers. It is the wife’s evidence that when the parties separated she was only able to take her and [X]’s clothes. Chattels division remains a live issue between the parties.
The Issues
The parties’ evidence as to their financial history was, on the whole, consistent and the detailed background set out in this judgment is an accurate reflection of that history.
The issues identified by me in relation to the division of property can be summarised as follows:
a)What constitutes the property pool and in particular:
i)Should part or all of the $10,500.00 “repaid” to the husband’s mother and stepfather after separation be added back to the pool?; and
ii)Should the $14,293.00 drawn down by the husband on the parties’ redraw facility to meet mortgage payments after separation be added back to the pool?
b)What superannuation figures should be used to determine the base amount for a splitting order in the wife’s favour and in particular should it be the parties’ current superannuation entitlements or their contributions to superannuation during cohabitation?
c)
What adjustment should be made to reflect the greater initial contribution of the husband and is this offset by any
post-separation contribution of the wife as the primary carer of the parties’ son [X]?
d)What should the adjustment be for section 75(2) factors?
e)How should the parties’ chattels be divided, especially where both parties deny possession of certain items?
The legislation
Section 79 of the Family Law Act1975 (“the Act”) defines the Court’s powers in determining applications for property settlement. Sub-section 79(2) of the Act provides that:
The Court shall not make an Order under this Section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.
Section 79(4) of the Act sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters are:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The four-step approach
In Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 at [39], the Full Court of the Family Court described the preferred four-step approach in property matters as follows:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), ("the other factors") including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case ….
Assets and liabilities
The parties are in agreement that they will each retain the motor vehicles currently in their possession and that those vehicles will not form part of the property pool.
Property L
The parties agree that the former matrimonial home at Property L is valued at $550,000.00, and that the amount currently outstanding on the mortgage is $161,051.00.
As set out earlier in this judgment, it is agreed that at separation the amount outstanding on the mortgage on Property L was $136,258.85. It was common ground that the husband paid an amount of $10,500.00 to his mother by drawing down on the redraw facility and that he has not made any mortgage payments since sometime in 2010, such that the mortgage increased by $14,293.00.
It was the husband’s evidence that during the marriage, his mother and stepfather lent the parties $15,500.00. Prior to separation, at the request of his stepfather, the parties repaid his parents $5,000.00 to enable his stepfather to build a shed.
It was the husband’s evidence that in September 2009, his mother asked that the outstanding $10,500.00 be repaid as his sister and brother-in-law were in some financial difficulty as a result of his brother-in-law losing his job.
It was the wife’s evidence that it was her understanding that the parties had been given $12,500.00 by the husband’s mother and stepfather and that the balance of funds advanced, after repayment of the $5,000.00, was a gift rather than a loan. The wife however conceded that she had never had any discussions with her mother-in-law as to the status of this money and that her understanding of the nature of these advances was as a result of some discussions she had had with the husband.
The husband was asked to substantiate, through the production of appropriate supporting bank and financial statements, the exact amount lent or advanced by his mother and stepfather. The husband was able to produce documentation that evidenced advances by his mother and stepfather of $13,000.00.
It was argued on behalf of the wife that some or all of the $10,500.00 should be added back into the property pool.
I am satisfied that the husband’s mother and stepfather did lend the parties $13,000.00, and that subsequent to separation an amount of $8,000.00 was still owing to them. In that circumstance, the additional payment over and above $8,000.00 of $2,500.00 should be added back to the pool.
In relation to the non-payment of the mortgage by the husband such that the mortgage has increased on Property L by $14,293.00, the husband had the benefit of living in that property whilst the wife and [X] have lived in rental accommodation.
The husband had a positive obligation to ensure that the parties’ equity in the property was not diminished whilst residing in Property L and his explanation for his non-payment that he was:
“advised not to”
is not an acceptable explanation.
It was further argued on behalf of the husband that upon dismissal from [employment omitted] in July 2010, he has been in receipt of an inconsistent income and as such was unable to afford mortgage payments. On his own evidence, the husband was able to negotiate an arrangement with the bank to make interest-only payments for a period of six months subsequent to his dismissal. Further, on his own evidence, the husband has been working anywhere between 30 to 50 hours a week in his casual employment and receiving an income of between $350.00 and $800.00 per week. I am therefore satisfied that he was more than able to meet the mortgage payments but chose not to do so in anticipation of these proceedings.
Accordingly I am satisfied that the husband had both the responsibility and capacity to meet the mortgage payments and in not so doing has reduced the parties’ equity in the former matrimonial home. I am of the view that the reduction in the equity in the former matrimonial home of $14,293.00 should be added back to the matrimonial pool.
Superannuation
As a result of his employment with [employment omitted], the husband has a current superannuation entitlement with the [E] Superannuation Scheme (“[S]”) of $222,579.00. The wife has a current superannuation entitlement with [A] Superannuation of $31,750.00.
It is agreed that when the parties commenced cohabitation, the husband’s superannuation entitlements were $71,394.00 and that the wife’s superannuation entitlements were $5,230.00, although the wife was of the view she had additional superannuation at this time but was unable to provide the court with any documents supporting this claim.
Because of the disparity in the parties’ respective superannuation positions, they are in agreement that there be a splitting order made in the wife’s favour against the husband’s superannuation. Where the parties are apart is what base amount should be attributable to the wife in respect of that splitting order.
It was argued on behalf of the husband that whilst there should be an equal division of superannuation between the parties, the basis for the calculation of the base amount should be the amounts of superannuation that both parties accumulated during the period of cohabitation. The amount contributed by the husband during cohabitation, being the difference between his current entitlement and his entitlements at the commencement of cohabitation is $151,185.00. The amount of superannuation accumulated by the wife during the period of cohabitation, being the difference between her current entitlement and her entitlements at the commencement of cohabitation is $26,520.00. Utilising these figures an equal division of superannuation between the parties would result in a base amount attributable to the wife of $62,332.50.
Counsel on behalf of the wife argued that the Full Court in C v C (2005) FLC 93-220 held that in determining a party’s entitlement to superannuation, the court must apply the provisions of section 79(4)(a) to (g) of the Act. Thus it was submitted the starting point is the value of the superannuation at the time the matter comes before the court. The court should then assess the parties’ contributions to their superannuation interests and then whether any adjustment should be made on account of the provisions under section 75(2) of the Act.
It was therefore submitted on behalf of the wife that the approach to be taken by the court is to have as its’ starting point the current value of the parties’ respective superannuation entitlements and to then consider the parties’ respective contributions and competing section 75(2) claims.
It was then argued on behalf of the wife that whilst the husband’s
pre-cohabitation contribution to his superannuation is a relevant factor, it is offset by the adjustments for section 75(2). Accordingly it was submitted that the base amount to be split to the wife from the husband’s superannuation should be determined by an equal division of the parties’ current superannuation entitlements.
A perusal of the decisions of the Full Court, the Family Court and of this court post the 2002 amendments and in particular the matters of C v C (supra), Pera & Pera (2008) FLC 93-372, B & B [2005] FamCA 624, L v L (2006) FLC 93-254, BAR and JMR (2005) FLC 93-231, Kitman & Kitman [2008] FamCAFC 166 shows that the approach of the courts generally has been to have the value of the parties’ superannuation entitlements at the time of hearing as the starting point of the determination of the parties’ respective entitlements to that superannuation.
In these circumstances I am satisfied that the parties’ current superannuation entitlements should be included in the parties’ pool of assets.
Chattels
The division of the parties’ chattels and personalty is a longstanding issue between the parties. Their in specie division will be determined by me as part of the orders made.
Accordingly, I find the matrimonial asset pool of the parties to be as follows:
Pool
The former matrimonial home situate at
Property L- Less current mortgage
$550,000.00
<$161,051.00>
$388,949.00
Addbacks
- $2,500.00 paid by the husband to his mother in excess of the proved loan
- Mortgage not paid by the husband
post-separation$2,500.00
$14,293.00
Total $405,742.00 Superannuation
Husband’s superannuation entitlement with [S] $222,579.00 Wife’s superannuation entitlement with [A] Super $31,470.00
Total $254,049.00 Chattels
To be divided in specie
In order to determine a just and equitable outcome to this matter, I intend to consider the parties’ assets individually. That this asset by asset approach is a legitimate and appropriate exercise of the court’s discretion under section 79 of the Act was confirmed by the High Court in Norbis v Norbis (1986) FLC 91-712.
Property L
Contributions
It is common ground between the parties that the husband had equity in the property at Property C at the commencement of cohabitation in April 2003, that this property was used as the security that enabled them to take out the loans to buy the land upon which the former matrimonial home was built and that when Property C was sold in October 2004 the net proceeds of sale of $181,650.93 were utilised to reduce the mortgage on Property L.
Where the parties differed was what adjustment should be made in the husband’s favour because of this initial contribution.
It was argued on the husband’s behalf that the husband’s initial contribution constitutes almost 45 per cent of the parties’ existing realisable pool of assets and that considerable adjustment should be made in the husband’s favour as a result of that.
It was further argued on behalf of the husband that absent his equity in the Property C property, the parties would not have been able to acquire the matrimonial home in the first place as its’ equity enabled the initial borrowings to take place and following its’ sale represented over 50 per cent of the then equity in the property.
It was argued therefore that in all those circumstances there should be an adjustment in the husband’s favour in relation to contributions of some 25 per cent.
Counsel for the wife referred the Court to the decision of Pierce and Pierce (1999) FLC 92-844 where the Full Court held at page 85881:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all the other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution… regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home.”
Briefly, the facts in Pierce (supra) were that the parties had cohabited for some ten years. There were two children of the marriage who were then aged nine and seven who resided with the husband. The net assets of the parties were $319,190.00. It was found that at the time of commencement of cohabitation, the husband had assets to the value of $226,000.00 and the wife had assets with an estimated value of $11,500.00. In 1990 the former matrimonial home was purchased for $235,000.00, to which the husband contributed $200,000.00 and the wife $10,000.00.
The Full Court held that the husband’s greater initial contribution warranted an adjustment in his favour of 15 per cent, together with a further adjustment of five per cent pursuant to section 75(2) arising from his responsibility for his ongoing primary care of the two young children absent any real child support from the wife.
It was submitted on behalf of the wife that in the circumstances of this matter, the adjustment that should be made in the husband’s favour should be 10 per cent for his initial contribution and that this adjustment should be reduced by five per cent given the
post-separation contributions of the wife in having the primary care of the parties’ young son [X].
Counsel for the wife made no submissions as to why a figure of 10 per cent was an appropriate adjustment in the husband’s favour or why the adjustment should differ from that found to be appropriate by the Full Court in Pierce (supra) in circumstances where both cases, in the context of the initial contributions, are very similar.
Section 79(4)(c) of the Act sets out that a factor to be taken into account when considering what orders should be made in property proceedings, is the contributions made by a party to the marriage for the welfare of the family. The High Court in Williams & Williams [1985] HCA 52 confirmed the findings of the Full Court and the Trial Judge at first instance that the wife’s care of the children after separation constituted a contribution to the welfare of the family pursuant to section 79(4)(c) of the Act.
In Williams (supra), the parties had separated in 1975 and the husband had been a permanent in-patient in hospital in 1976. The parties had eight children and the wife had been solely responsible for their care for the 10 years between separation and the determination of the matter.
In this matter, whilst the wife has the primary care of [X], the arrangements between the parties are such that he will spend and has spent significant and substantial time with his father since separation.
Having considered the submissions of the parties as to the appropriate adjustment in the husband’s favour in the context of contributions, I am satisfied that there should be an adjustment in his favour but not to the extent as claimed by him as I am satisfied that his initial contribution has been off-set by the contributions both parties made subsequent to that initial contribution.
I am also satisfied that there should not be an adjustment as claimed by the wife that would reduce the adjustment on the basis of any
post-separation contribution arising from her having the primary care of [X]. The circumstances of the arrangements for [X] post-separation can be clearly distinguished from the facts in Williams (supra). I note in this regard that when considering this matter the Full Court in Pierce (supra) were not persuaded in the circumstances of that matter where the husband had the primary care of two young children that such an adjustment would be appropriate.
In the circumstances of this case I am satisfied that there should be an adjustment in the husband’s favour in the context of contributions in the amount of 15 per cent.
Section 75(2) factors
It was argued on behalf of the wife that there should be an adjustment in her favour of 15 per cent on the basis that she has the primary care of [X] who is not yet of school age.
It was argued that this responsibility limits her capacity to work
full-time now and will continue to do so for some time into the future.
It was the wife’s evidence, not challenged by the husband, that since his dismissal from [employer omitted] in July 2010, he has paid her no Child Support in relation to [X]. It was the husband’s evidence that he was advised of a nil assessment by the Child Support Agency when he contacted them shortly after his dismissal.
It is the wife’s evidence, which I accept, that she made enquiries of the Child Support Agency shortly prior to the commencement of the hearing of this matter and was advised by the Agency that they had received no further communications from the husband since being advised that he had been dismissed from [employer omitted], and in particular had no knowledge of his current part-time/casual employment.
It was the wife’s evidence that, other than Child Support payments as assessed by the Child Support Agency, the husband has made no further additional or voluntary payments towards the upkeep of [X]. The husband challenged this, but his evidence was that he had taken [X] to the doctor once since separation and had paid for that account. He gave evidence of no other additional expenditure by him on [X]’s behalf, save the costs of caring for [X] when he is in his care.
In these circumstances it was submitted on behalf of the wife that the Court had to accept that in the short to medium term, she would bear the majority of the financial burden for [X]’s care.
It was submitted on behalf of the wife that in those circumstances there should be an adjustment of 15 per cent in her favour.
It was argued on behalf of the husband that, save for those factors relating to section 75(2)(c), being the care of a child under 18, both parties were in fairly similar circumstances. They were both aged in their 30’s, in good health and had no restrictions in the context of their capacity to obtain employment. Whilst historically the husband had had a greater earning capacity than that of the wife, it was submitted that the circumstances of his dismissal from [employer omitted] were such that the parties’ earning capacities should now be seen to be at a similar level.
It was conceded on behalf of the husband that their proposal as to property adjustment offered the wife a:
“respectable loading”
of 15 per cent for section 75(2) factors
Having considered all relevant factors pursuant to section 75(2) of the Act, I am satisfied that there should be an adjustment in the wife’s favour of 15 per cent.
Superannuation
Contributions and Section 75(2) factors
As previously found in this judgment, the totality of the parties’ current superannuation entitlements has been determined to form part of the property pool.
It was submitted on behalf of the wife that in accordance with the decisions previously set out in this judgment in relation to the manner in which the court now deals with superannuation, that the appropriate manner in which to determine a division of such superannuation was to initially look at the parties’ contributions and to then look at
section 75(2) factors.
It was submitted on behalf of the wife that the initial contributions of the husband to his superannuation, such that he had an entitlement of some $70,000.00 of superannuation as opposed to her entitlement of $5,000.00 at the commencement of cohabitation was offset by her greater needs pursuant to section 75(2), because of her care of [X].
The wife’s submission was that the initial contributions of the husband should be given a loading of five per cent, but that should be offset by the section 75(2) factors in her favour such that the calculations for the division of superannuation between the parties should be 50:50.
It was submitted on behalf of the husband that in the event the Court found the parties’ current superannuation entitlements be included in the pool, then it was appropriate to apply section 79 of the Act in determining a division of the super. It was argued that the wife did not make any contribution to the husband’s superannuation prior to cohabitation. It was also argued that the wife made minimal contribution to the husband’s superannuation post commencement of cohabitation as the level of superannuation he paid was mandated by the terms and conditions of the husband’s employment and he at no time made any greater contributions over and above that mandated such that the parties’ financial position was compromised by such additional payments.
It was further submitted on behalf of the husband that there should be no adjustment made in the context of section 75(2) in relation to superannuation in circumstances where neither party will have access to their superannuation for many many years to come.
It was therefore submitted on behalf of the husband that in determining the amount to be attributed to the wife as the base amount, the husband’s greater contribution should be taken into account and the adjustment should be made on the basis that he receive 60 per cent of his superannuation and she receive 40 per cent of his superannuation.
I find the submissions of the husband in relation to the division of his superannuation compelling. There is no doubt that his pre-cohabitation contribution to superannuation, which forms approximately one-third of the current entitlement, is a factor such that his contributions must be seen as being greater than those of the wife.
Neither party made any submissions as to what the percentage division of the wife’s superannuation should be when determining the base amount for the splitting order.
When the parties commenced cohabitation, on the documents available to the court, the wife had superannuation of $5,230.00. In July 2004, less than 12 months after the commencement of cohabitation her superannuation had leapt to $16,193.00. The wife was of the view that this “leap” reflected an amalgamation of all her superannuation entitlements earned over some 10 plus years of employment but was unable to produce any independent documents to support this position.
As with the husband, I am satisfied that the wife’s pre-cohabitation contributions were a significant factor in the level of her current superannuation entitlements and must be seen as greater than those of the husband.
In these circumstances in determining what should be the base amount attributable to the wife in the context of the splitting order in her favour against the husband’s superannuation, I am satisfied that it should be determined on the basis that the husband retain 60 per cent of his superannuation entitlements and the wife retain 60 per cent of her superannuation entitlements.
Accordingly, the base amount to be allocated to the wife from the husband’s superannuation fund is $76,443.60.
Chattels
As previously referred to in this judgment, there is an outstanding chattels dispute between the parties.
It was the wife’s evidence that when the parties physically separated, she took very little of her personal possessions or chattels from the former matrimonial home, save for some of her and [X]’s clothing.
It was the wife’s evidence that prior to her leaving the property, she and the husband took an inventory of their chattels and possessions and reached an agreement as to how they were to be divided between them. It was her evidence that the parties drew up a list setting out the agreed division of their chattels.
It was the wife’s evidence that on the date of separation when she and her parents attended the matrimonial home with a truck to take away those items that had been agreed would be taken by her, the husband became very agitated and contacted the Police. A Sergeant of Police then attended the matrimonial home and after discussion with the parties, the wife was only able to leave with her clothing and [X]’s clothing.
The issue of the return of chattels was first raised by the wife in an Application in a Case filed by her on 28 October 2009. The wife subsequently filed further Amended Responses to the Initiating Application on 20 May 2010 and on 2 February 2011, in which she set out in detail those items sought by her and those items that she proposed be retained by the husband.
The husband opposed the wife’s Application as to chattel division. It was his evidence that prior to physical separation, the wife boxed up all of the personal items sought by her as well as the majority of items such as linen, crockery, her jewellery and the bike.
It was the husband’s evidence that on the day that the parties physically separated, the wife and her parents loaded these boxes into their motor vehicles and took them away with them. It is therefore his evidence that many of the items sought by the wife in her Amended Response/s are already in her possession and have been since the date of separation in July 2009.
It was the husband’s evidence that at no time prior to separation did the parties do an inventory of the chattels in the matrimonial home and agree to their division. Whilst he agreed that the wife had a list of chattels when they physically separated in July 2009, it was his evidence that that was a list prepared solely by her and there had never been an agreement as to the division of chattels between them.
When questioned as to why the wife had been pursuing orders for the return or division of chattels that on his evidence were already in her possession, it was the husband’s evidence that the only reason she had done that was to try and “build a case” against him.
As indicated earlier, in the further Amended Responses to the Initiating Application filed by the wife both on 20 May 2010 and again on
2 February 2011, the wife annexed a document in which she set out those items which she sought be returned to her. Prior to the matter commencing before me, that list was exchanged between the parties and the husband marked on that list the items that he agreed the wife could retain, as well as indicating those items he claimed had already been returned to her.
It is very difficult to determine what occurred when the parties physically separated and in particular what, if any, chattels the wife took from the former matrimonial home at that time.
Only the parties gave evidence in the hearing of this matter and neither called any witnesses to corroborate their version of the circumstances of the separation.
When giving his evidence, the husband was at times evasive and unconvincing. His evidence as to when he stopped paying the mortgage was unconvincing as was his evidence as to his communications with the Child Support Agency.
By contrast, I found the wife to be straightforward and direct when giving her evidence. I did not detect anything in her demeanour or presentation that would lead to a conclusion that she was in any way seeking to “build a case” against the husband or pursuing orders for the return of chattels already in her possession in order to paint the husband in a bad light or to mislead the court.
On balance, on the issue of chattel division, I preferred the evidence of the wife to that of the husband.
In these circumstances, I will order which chattels are to be retained by the wife and which are to be retained by the husband. I do so however in the full knowledge that some of such nominated chattels may never be located and that the husband denies knowledge of their whereabouts. Anyone seeking to enforce orders in these circumstances would do so at their peril as to costs.
Just and equitable
As can be ascertained from this judgment, it was the husband’s position that he pay the wife the sum of $150,000.00 and that she transfer to him all her right, title and interest in the former matrimonial home. Such a payment reflects a division between the parties, on the husband’s figures, of 60 per cent in the husband’s favour.
The wife’s position was that the matrimonial home be sold and that the proceeds of sale, subject to the addbacks referred to previously be adjusted such that she receive 60 per cent of the equity in that property.
The husband sought a division of the parties’ superannuation entitlements on a 50:50 basis, to be defined by looking at the contributions the parties made to their respective superannuation entitlements during co-habitation. The wife agreed that superannuation should be divided equally between them but argued that such division should be based on their current superannuation entitlements.
It was submitted on behalf of the husband that his proposal in relation to Property L must be seen as just and equitable. It was argued that at the commencement of cohabitation, he had an asset base of $181,000.00. If he were to pay to the wife an amount of $150,000.00, then the equity in Property L to be retained by him would be $239,000.00, a $58,000.00 loading on his initial investment of $181,000.00. By comparison it was argued the wife commenced cohabitation with a negative asset base of $17,000.00 and, upon payment to her of $150,000.00, she would have a $167,000.00 increase from her initial position at the commencement of cohabitation.
It was argued in these circumstances that such an outcome must be seen as just and equitable.
It was argued on behalf of the wife that after seven years of marriage, a consideration of the contributions made by her during the course of the marriage, and in light of her responsibilities as the primary carer of [X] into the future, and in particular her responsibility to rehouse herself and [X], was such that her proposal should be seen as just and equitable.
Conclusion
In this matter the husband is seeking to retain the former matrimonial home. Because of his greater initial contribution to the parties’ assets, he is seeking that he pay the wife an amount of $150,000.00, which on his figures equates to 40 per cent of the equity in that property.
The husband is also seeking a superannuation splitting order in the wife’s favour in relation to his significantly greater superannuation entitlements, but argues the base amount to be attributable to the wife should either be calculated on a figure that represents the parties’ superannuation contributions during cohabitation or, in the alternative, if the totality of their current superannuation entitlements is the figure used, that the base figure be calculated on the basis that the wife has an entitlement to 40 per cent of his superannuation.
Conversely, the wife is seeking orders that the former matrimonial home be sold and that, subject to some addbacks, she receive an amount equivalent to 60 per cent of the equity in that property.
In relation to superannuation, the wife agrees that there should be a splitting order in her favour in relation to the husband’s greater superannuation entitlements, but that the calculation of that figure should be based on their current total entitlements and that there be an equal division between the two of them.
As set out in this judgment, I have determined that the increase in the parties’ mortgage as a result of non-payment by the husband of the mortgage payments post-separation when he had the benefit of living in the matrimonial home, as well as an over-payment to his mother of loan monies of $2,000.00 should be added back to the pool.
I have determined that there should be an adjustment in the husband’s favour of 15 per cent in relation to the matrimonial home arising from his greater initial financial contribution to that asset.
In relation to adjustment pursuant to section 75(2), I have determined that there should be an adjustment in favour of the wife as a result of her responsibility for the primary care of the parties’ son [X] in the sum of 15 per cent.
It can therefore be seen in those circumstances that I have determined that the husband and the wife have an equal share to the equity in the matrimonial home, that equity reflecting the current level of mortgage with the addbacks referred to previously.
In the circumstances, it is my intention to make orders that the husband be given an opportunity to pay to the wife an amount equivalent to
50 per cent of the equity in the matrimonial home, including the addbacks, and in the event he is able to do so that she transfer her right, title and interest in the property to him.
As the amount required to be paid by the husband pursuant to this order exceeds that proposed by him, I intend to give the husband 30 days in which to confirm in writing to the wife that he is, or isn’t, able to buy her out. If he is able to do so, I will give him a further 30 days to effect settlement. If the husband is unable to buy the wife out, orders will be made that the matrimonial home be immediately placed on the market for sale and for the division of the net proceeds of sale to be divided equally between the parties, subject to the adjustments for the addbacks.
In relation to superannuation matters, I note that the parties’ solicitors have provided to the trustee of the husband’s superannuation fund the procedural fairness required under the Family Law Act 1975. Accordingly, I will be making orders that provide for a superannuation splitting order in the wife’s favour, calculated in accordance with my determination in this matter that each of the parties retain 60 per cent of their current superannuation entitlements.
In relation to chattels, there will be orders made for the division of chattels between the parties on the basis each party retain the chattels currently in their possession, save that the husband is to return to the wife the chattels listed in the annexure to the orders.
I certify that the preceding one-hundred and twenty-seven (127) paragraphs are a true copy of the reasons for judgment of Bender FM
Date: 11 March 2011
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