Farley and Manoly
[2012] FMCAfam 41
•24 January 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FARLEY & MANOLY | [2012] FMCAfam 41 |
| FAMILY LAW – Property – de facto relationship – disputed periods of cohabitation – dispute about asset pool – credit – contributions – sub-section 90SF(3) factors. |
| Family Law Act 1975 (Cth), ss.4AA, 75, 79, 90SF and 90SM Federal Magistrates Act 1999 (Cth), Pt. 6, Div. 5 Federal Magistrates Court Rules 2001 (Cth), r.21.02(1)(b) |
| Baumgartner v Baumgartner (1987) 164 CLR 137; (1988) DFC 95-058) Calverley and Green (1984) 155 CLR 242; (1984) FLC 91-565 Clauson (1995) FLC 92-595 Clives and Clives (2008) FLC 93-385 Coghlan (2005) FLC 93-220 Ferraro (1993) FLC 92-335 Hayne and Hayne (1977) FLC 90-265 Hickey (2003) FLC 93-143 Garrett and Garrett (1984) FLC 91-539 Lee Steere (1985) FLC 91-626 Kessey and Kessey (1994) FLC 92-495 Mallet v Mallet (1984) FLC 91-507 Muschinski and Dodds (1984-1985) 160 C.L.R. 583 OSF and OJK (2004) FLC 93-191 Rolfe and Rolfe (1979) FLC 90-62 Russell v Russell(1999) FLC 92-877 |
| Applicant: | MS FARLEY |
| Respondent: | MR MANOLY |
| File Number: | LNC 348 of 2010 |
| Judgment of: | Roberts FM |
| Hearing date: | 6 September 2011 |
| Date of Last Submission: | 6 September 2011 |
| Delivered at: | Launceston |
| Delivered on: | 24 January 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr W Ayliffe |
| Solicitors for the Applicant: | Doolan & Brothers |
| Counsel for the Respondent: | Mr D Lewis |
| Solicitors for the Respondent: | Levis Stace & Cooper |
ORDERS:
That within 45 days MS FARLEY (“the Applicant”) must transfer to MR MANOLY (“the Respondent”) all her right, title and interest in the property known as Property C, in Tasmania, more particularly described in Certificate of Title Volume 55673 Folio 29 (“the property”).
That contemporaneously with the transfer referred to in Order No. 1 hereof the Respondent must:
(a)provide to the Applicant a complete release from her obligations under Mortgage number B803499 secured over the title to the property; and
(b)the sum of thirty-four thousand dollars ($34,000.00) by bank cheque.
That from the date of this Order the Respondent has no claim to any interest in the Applicant’s property known as Property F, in Tasmania, more particularly described in Certificate of Title Volume 33015 Folio 2.
That the Applicant and the Respondent each otherwise retains all chattels, motor vehicles, money and other property in their respective possession and control as their sole property free from any claim by the other.
That the Applicant must do all things reasonably required to transfer to the Respondent all her right, title and interest in any property in his possession or control and for such purpose she must complete and sign any documents that may be required to register any such property in the sole name of the Respondent.
That the Respondent must do all things reasonably required to transfer to the Applicant all his right, title and interest in any property in her possession or control and for such purpose he must complete and sign any documents that may be required to register any such property in the sole name of the Applicant.
That each party is solely liable for, and must indemnify the other against any liability encumbering or charged against any property to which that party is entitled to pursuant to these Orders.
That all extant applications are dismissed, save as to costs.
IT IS NOTED that publication of this judgment under the pseudonym Farley & Manoly is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT LAUNCESTON |
LNC 348 of 2010
| MS FARLEY |
Applicant
And
| MR MANOLY |
Respondent
REASONS FOR JUDGMENT
Terms used
In these Reasons, I shall refer to the applicant, MS FARLEY, as “Ms Farley” and the respondent, MR MANOLY, as “Mr Manoly” (because that is how Ms Farley referred to him throughout her evidence).
I shall also refer to properties owned by them at various times as follows:
·Property G, – “Property G”;
·Property C, – “Property C”;
·Property B – “Property B”; and
·Property F, – “Property F”.
The parties and their applications
The parties lived together for significant periods in a de facto marriage relationship. However, they have substantial disagreements about the periods of living together and I will refer to that below.
At the start of the hearing, Ms Farley was seeking a division of the parties’ net asset pool on the basis of 40% to Mr Manoly and 60% to herself.[1] Mr Manoly was seeking a 50/50 division of the net asset pool, which on his figures would have resulted in a payment by him to Ms Farley of $27,032.[2] However, the parties also have a significant dispute about the composition of the net asset pool, and I will also refer to that below.
[1] See Ms Farley's Case Summary
[2] See Mr Manoly's Case Summary
Clearly, if there is a significant dispute about the composition of the net asset pool, then the parties’ percentage differences are somewhat meaningless.
The parties’ cohabitation
Where I refer to any fact in these Reasons, it should be regarded as a finding of fact unless a contrary intention is otherwise clear from the context.
The parties agree that they met in 1979 and that their two children were born in (omitted) 1991 (a son) and (omitted) 1992 (a daughter).
Ms Farley says that she and Mr Manoly lived together:
·firstly, from 17 August 1994 until February 2001; and
·secondly, from August 2007 until April 2009.[3]
[3] See paragraph 2 of her trial affidavit.
In his trial affidavit Mr Manoly says that the parties lived together:
·firstly from 1985 until 1998; and
·secondly, from May 2007 until April 2009.[4]
[4] See paragraphs 5 and 10 of his trial affidavit.
On Ms Farley’s version the parties lived together for a total of less than nine years, whereas on Mr Manoly’s version they lived together for approximately fifteen years.
Mr Manoly says that they started living together in or about 1985 and he disputes Ms Farley’s evidence that they did not start living together until August 1994 because:
(a)they were living together when Ms Farley’s children of a former relationship were very young;
(b)they were living together before their own children were born; and
(c)they were living together before they purchased Property C in 1994.[5]
[5] See paragraph 5b of his affidavit.
In her oral evidence Ms Farley repeated that she and Mr Manoly did not start living together as a family until 1994. She stated that Mr Manoly did not ever stay overnight for a whole night prior to that. She was shown movie footage, which she conceded showed Mr Manoly engaged in family activities at Property G prior to 1994. However, she was adamant that he did not live at that address.
Ms Farley did concede that Mr Manoly had given her $5,000 when she wished to purchase Property G from the Housing Commission. However, she gave thoroughly unconvincing evidence about the purpose of that contribution by Mr Manoly. After consistently denying that it was for the deposit on Property G, Ms Farley finally conceded when cross-examined that she had in fact used that for the required deposit. The relevant part of the exchange between Mr Manoly’s counsel and Ms Farley was as follows:[6]
Mr Lewis: “And (Mr Manoly) gave you $5000 in cash, and you took it straight down to (a named solicitor) by way of a deposit for the home, didn’t you?”
Ms Farley: “Well, I could have took his money or I could have took my money?”
Mr Lewis: “But you took his, didn’t you? It was his $5000 in cash that he gave you for that purpose, wasn’t it?”
Ms Farley: “Well, it was most convenient to have it at the time, in cash.”
[6] See transcript at page 33.
Given the above, I accept Mr Manoly’s evidence that he gave $5,000 to Ms Farley to enable her to buy Property G, which I conclude was already the family home.
When I consider the parties evidence about their relationship, I find on the balance of probabilities Mr Manoly’s version of when they started living together is likely to be more accurate than Ms Farley’s version. Her version is inconsistent with Mr Manoly paying a deposit on the purchase on their first home and with the video evidence of him taking part in family life there.
I also find that Mr Manoly was confused when he said that they separated for “about 7 years in approximately 1998” because he said twice in his Affidavit that they resumed their relationship in May 2007. That is approximately 9 years from 1998, and not 7 years.
On examining the evidence, I conclude that they separated later than 1998 and Ms Farley’s evidence that they separated in February 2001 appears to be more consistent with other aspects of the matter. Ms Farley’s evidence about that separation was:
·She returned to Property G upon separation and spent approximately eighteen months there getting it ready for sale.
·She sold the Property G property for approximately $62,500 on 8 October 2002 and the net proceeds of $32,736 were paid to her.[7]
[7] See her affidavit at paragraphs 12.1 to 12.3
Clearly, that fits with a separation in 2001 and not 1998. It also fits with Ms Farley’s evidence that she then stayed with her parents for approximately eighteen months more before buying Property B at the end of January 2003.[8]
[8] See her affidavit at paragraphs 12.4 and 13.1, and Annexure “A” to that affidavit.
On balance, I conclude that the parties lived together for their first cohabitation period from 1985 until February 2001, being a period in excess of fifteen years.
The parties were also unable to agree upon the start of their second cohabitation period. They agree that it was in 2007, but Ms Farley says it was in August and Mr Manoly says that it was in May of that year.
Ms Farley does not say why she believes that the second period of cohabitation started in August; she simply says “It was August 2007 when we resumed our relationship”. Unfortunately, she was not asked why she believed that it was August rather than May.
On the other hand, Mr Manoly was asked why he thought it was May. He said:
I think (the parties’ daughter) did the first term down at (omitted). I think she came up for the second term in (omitted) High School.[9]
[9] See transcript at page 61.
While he clearly conceded that he could be wrong, I note that Ms Farley received $149,022 when the sale of Property B was completed on 21 May 2007,[10] and Ms Farley does not claim to have lived anywhere else between leaving Property B and returning to Property C.
[10] See Annexure”I” to Mr Manoly’s affidavit.
A sale in May 2007 and their daughter attending (omitted) High School appear to fit with a return from the Hobart area in May 2007. In the circumstances, I find that on the balance of probabilities the parties resumed cohabitation in May 2007 and not August 2007.
This means that the two periods of cohabitation were:
a)firstly, from 1985 to February 2001; and
b)secondly, from May 2007 until April 2009.
Consequently, I conclude that the parties lived together in a de facto marriage relationship during two separate periods, and the combined total exceeds 17 years.
Credit
In my view, Ms Farley deliberately chose to deny living with Mr Manoly for a substantial period (i.e. from 1985 to 1994) when she knew that she and Mr Manoly had been living together during that period. Clearly, that must give me some concerns about the veracity of her evidence generally.
There were other inconsistencies in her evidence that gave me cause for concern. For example, on a number of occasions Ms Farley said that Mr Manoly would not “commit” to the relationship, yet on 3 July 2010 she placed an advertisement in the “Anniversaries” section of the personal columns of the local newspaper which displayed a photograph of them dancing together and their surnames over following entry:
A memorable 31 years, happy anniversary.
Eternally yours
- Ms Farley
I do not accept her evidence that she placed that in the newspaper, because she was “feeling a bit mean”.[11] It is an acknowledgement on her part of a long term relationship and she was certainly not hiding “the reputation and public aspects of the relationship”.[12]
[11] See transcript at page 27.
[12] See section 4AA(2)(i) of the Family Law Act 1975
In addition, Ms Farley’s evidence-in-chief clearly gave the impression that Mr Manoly would not give her enough money, and when she asked for more it was refused.[13] However, when she was cross-examined, the following exchange took place:
Mr Lewis: “You didn’t ever ask him for more, did you?”
Ms Farley: “I once asked him to pay for a course I wanted to do, a correspondence course, but that took three days of nerves to actually get around to asking him, because he made it very clear that he was a very poor man, and could only give what he gave. He would not share anything else with me or the family.”
Mr Lewis: “He paid for the course, didn’t he?”
Ms Farley: “Yes, he did. And anything that was asked or he gave was always – and always – offered back to him, and he would say, ‘No, that’s okay.’ He always refused to take.”
[13] For example, see paragraph 9.8, 11, 16.2, and 22.4 of her affidavit.
That exchange puts how Mr Manoly reacted to requests for money in a very different light. Indeed, it also suggests that on any occasion that Ms Farley offered to re-pay some money, he would refuse to accept it. Notwithstanding that concession on Ms Farley’s part, her counsel put it to Mr Manoly later that Ms Farley had asked him for money on a number of occasions and he had refused. Mr Manoly responded: “Incorrect. She never asked me for any money” which would appear to be more in line with Ms Farley’s own oral evidence quoted immediately above.
I have already referred to Ms Farley’s unsatisfactory evidence about the $5,000 deposit for Property G, so I do not need to repeat it.
When I consider these and other matters, I conclude that when there is a conflict in the parties’ evidence, I should generally prefer Mr Manoly’s evidence. I am of the view that Ms Farley’s evidence was given in a manner deliberately designed to minimise not only the length of the overall relationship, but also Mr Manoly’s contributions to that relationship.
Other relevant background facts
Mr Manoly was born in 1942 and is aged 69 years. Ms Farley was born in 1953 and is aged 58 years.
They met in December 1979. At that time Ms Farley had three children from a previous relationship, aged approximately 8, 6 and 3 years. The following year, Ms Farley and her three children moved into Property G, being a property that she then rented from the Housing Commission. In 1985 the parties started living together at Property G.
Ms Farley was able to purchase Property G in her name in 1988 under a scheme whereby registered Housing Commission tenants could purchase their rental properties. In this regard I accept Mr Manoly’s affidavit evidence, where he said:[14]
Ms Farley and I purchased the home in about December 1988, although the Title was registered in her name, given that she was the only leaseholder of the property.
Ms Farley and I sat down and spoke about purchasing the property. Ms Farley in fact told me of the program and the opportunity to make the purchase. We did not have to talk about it for long. We had been living there for some time, it was our family home and it made sense to buy it, rather than pay the rent. I supported Ms Farley in the decision, however, given that she was the leaseholder, the purchase had to be made in her name and so she was required to attend to much of the paperwork.
I provided a $5,000 deposit from savings funds held by me when we commenced our relationship. The purchase was otherwise made by way of a mortgage of approximately $23,000. The mortgage also had to be registered in Ms Farley’s name alone as she was the initial leaseholder.
[14] Mr Manoly’s trial affidavit at paragraphs 21 to 23.
As mentioned above, the party’s children were born in (omitted) 1991 and (omitted) 1992.
The estate of Mr Manoly’s late mother was finalised in September 1992, and he and his brother each received an initial cash payment of slightly more than $6,500. Their mother’s home was also transferred to the two of them. However, Mr Manoly’s brother purchased Mr Manoly’s interest in that property in September 1994 for $40,000. Mr Manoly contributed that $40,000 to the purchase of Property C,[15] which they had contracted to buy in August 1994. The required balance funds were borrowed from a building society.
[15] This is conceded at paragraph 9.3 of Ms Farley’s affidavit.
When they moved into Property C, Ms Farley let Property G to tenants and used the rent received to meet the mortgage repayments to the mortgagee building society.
In mid-1997 Mr Manoly received a distribution from an aunt’s deceased estate of slightly more than $31,000 and in December 1997 his aunt’s home was transferred into the joint names of Mr Manoly and his brother. They subsequently sold that property in October 2000 and each received $18,640. I accept Mr Manoly’s evidence that he used his $31,000 for improvements to Property C.
As stated above, Ms Farley moved out in February 2001 and sold Property G approximately 18 months later. Ms Farley received $32,737 from that sale. She did not tell Mr Manoly that she had sold Property G.,[16] but she subsequently used funds received to purchase the land at Property B for $32,000. She then arranged for a house to be constructed on that land at a cost of $120,000, which she borrowed from a bank.
[16] See paragraph 55 of Mr Manoly’s affidavit and page 36 of the transcript.
In May 2007, Ms Farley sold Property B and cleared $149,022. She and the parties’ daughter returned to live at Property C. Their son had returned to live with his father the previous year.
In or about April 2008 Ms Farley purchased the Property F property, using funds that she received from the sale of Property B. It is clear that Mr Manoly was not involved in the decision making in relation to that purchase and has only become aware of details through the discovery process associated with these proceedings. I deduce from the evidence that Ms Farley contributed approximately $115,000 from the Property B proceeds to purchase that property. (Her counsel suggested on three occasions that I could make that deduction.)[17] She had previously contributed approximately $8,000 for renovations to Property C and spent $9,000 on purchases for the parties’ two children (presumably from the proceeds of the sale of Property B).[18]
[17] See pages 79, 81 and 82 of the transcript.
[18] See paragraphs 15.1 and 15.2 of her affidavit.
Ms Farley is now conducting extensive improvements to Property F, with funds borrowed from a bank and from her mother. I shall refer to that below in relation to the asset pool.
De Facto property law
The law with respect to financial matters relating to de facto relationships is found in Part VIIIAB of the Family Law Act 1975 (“the Act”). Sub-section 90SM(4) sets out the matters that the court must take into account when considering what orders should be made for the alteration of the property interests of parties. They include:
a)the financial and non-financial contributions made directly or indirectly by or on behalf of each party or by a child of the de facto relationship to the acquisition, conservation or improvement of any property of the parties;
b)the contribution made by a party to the welfare of the family including any contribution made in the capacity of homemaker or parent;
c)the effect of any proposed order upon the earning capacity of either party; and
d)the matters referred to in sub-section 90SF(3) “so far as they are relevant”.
Because sub-sections 90SM(4) and 90SF(3) of the Act mirror sub-sections 79(4) and 75(2) of the Act, it is clear that the approach that Courts should take to the determination of de facto relationship property settlements has been well established by authority,[19] notwithstanding that Part VIIIAB of the Act only became law in 2009. The approach is essentially a multi-step process. The first step is to identify the property, liabilities and financial resources of the parties (generally at the time of the hearing). The second step is to evaluate the contributions made by the parties as defined in sub-section 90SM(4) of the Act and the third step is to consider those matters contained in sub-section 90SF(3) that are relevant.
[19] See Lee Steere (1985) FLC 91-626; Ferraro (1993) FLC 92-335; Clauson (1995) FLC 92-595, Hickey (2003) FLC 93-143 and Coghlan (2005) FLC 93-220
In determining what order the court should make under section 90SM, the court must be satisfied in all the circumstances that it is just and equitable to do so.[20] It is the justice and equity of the actual orders that the court must consider and this has sometimes been referred to as “the fourth step”.[21] In Russell v Russell, the Full court said:
Furthermore, it must be remembered in this regard that …… the Court is required to be satisfied that it is the order to be made which is just and equitable, not just the underlying percentage division of the net value of the parties' assets. Indeed we take the opportunity to emphasise that in what his Honour has termed ''the fourth stage'', that is, the consideration of whether the result is just and equitable, it is the justice and equity of the actual orders not of the percentage distribution which must be considered. [22]
[20] See sub-section 90SM(3)
[21] See Hickey (2003) FLC 93-143 and Russell v Russell(1999) FLC 92-877
[22] (1999) FLC 92-877 at page 86,439
However, I agree with the sentiment expressed by Walters FM that “the testing of any proposed orders …… is not a fourth substantive step (properly so called) in the property settlement exercise, and there is no fourth step in that sense.”[23]
[23] OSF and OJK (2004) FLC 93-191 at paragraph 16
I have jurisdiction to hear this matter, and in relation to that I simply note the following:
·the period, or the total of the periods, of the de facto relationship exceeded two years;
·there were children of the de facto relationship; and
·the relationship ended after 1 March 2009.
·both parties were ordinarily resident in Tasmania for the entirety of the de facto relationship.
The Asset Pool
The parties agree upon the current value of many of the assets and liabilities. However, there is still some substantial disagreement between them.
The assets that the parties agree upon are as follows:
Property C $220,000 Ms Farley $3,100 Ms Farley $2,500 Mr Manoly's Toyota $1,000 Mr Manoly's Falcon $1,200 Mr Manoly's CBA Account $24,048 Mr Manoly's CBA Account $1,589 Ms Farley’s account $100 Ms Farley’s shares $250 Total $253,787
Excluding those associated with Property F, the agreed liabilities are as follows:
Property C mortgage $33,495 Ms Farley’s credit card $1,899 Ms Farley’s personal loan $5,023 Total $40,417
It is the manner in which I should treat Property F and its associated liabilities that caused significant differences in the submissions put forward by counsel. It appears to be conceded that Property F was heavily overcapitalised at the time of the hearing. Ms Farley appears to have spent the following amounts in order to purchase and improve that property:
Ms Farley’s initial investment to purchase $115,000 Money advanced by Ms Farley’s mother $140,000 Funds advanced by CBA (two loans) $54,404 Total $309,404
Property F has been valued at $200,000 on an “as is” basis. That means that if no further work is done on the property, it is overcapitalised by approximately $109,000.
Counsel for Ms Farley suggested that I should include Property F in the asset pool at $200,000 and include all the liabilities associated with that property as listed above. I queried that as follows:
Where is the justice and equity in that, that (Mr Manoly) should be saddled with what appears to be a poor investment by your client and her mother? Why should he be saddled with what amounts to $100,000 or so value that isn’t there?
Ms Farley’s counsel responded in part as follows:
Now, your Honour has my submission that there’s no case here, with respect, that this was reckless or a waste. Yes, it has transpired, in a difficult market, and renovations are difficult, there has been an over-capitalisation. But both parties have to take some responsibility for what comes out of this relationship. Now, she needed to get a house for herself, the daughter of the parties … and also to assist in the responsibility that she has accepted, which is the responsibility recognised by the Act, in caring for her mother. [24]
[24] See page 81 of the transcript.
I do not accept that such an approach would provide justice and equity for Mr Manoly. It is not appropriate to say that he has to “take some responsibility for what comes out of this relationship” in relation to Property F’s overcapitalisation, because Ms Farley conceded that Mr Manoly was not involved in any way in the sale of Property B and subsequent purchase of Property F. Further, I consider it to be entirely inappropriate to make Mr Manoly financially responsible for Ms Farley’s desire to re-house her mother or for repaying Ms Farley’s debt to her mother, when Ms Farley’s mother has her own home that she will put on the market again in due course. Ms Farley’s evidence was that her mother’s home had previously been on the market for $315,000 and that she expected it to be put back on the market in the summer. [25]
[25] Page 19 of the transcript
A possible alternative method of including Property F in the asset pool would be to take the valuer’s “as if complete” valuation of the property at $350,000 and deduct from that the liabilities owing and the anticipated cost of completing the improvements. In relation to that, the only evidence that I have is that Ms Farley was given an estimate by her builder that to complete the works would cost $27,000.[26]
[26] Page 20 of the transcript
If that approach was to be adopted, it would mean that Property F has a potential value of $128,596 to Ms Farley, after paying that builder, her mother and the CBA. However, Ms Farley’s counsel was clearly not in favour of such an approach when I put it to him. He said that “one would need to be fairly chary about an estimate” of the future building costs.[27]
[27] Page 78 of the transcript
Another method of effectively including what Ms Farley has invested into Property F would be to add back the sum of $115,000 that Ms Farley spent when she purchased Property F. In my view, that is the approach that I should adopt, for the following reasons:
·It means that Mr Manoly does not have to take any “responsibility” for Ms Farley’s decisions to purchase Property F, or for her decisions to extensively improve that property with significant borrowings, when Mr Manoly was not consulted about any of those decisions.
·It avoids any need to establish or quantify any equitable interest that Ms Farley’s mother may have in Property F. [In this regard, Ms Farley’s counsel had referred me to the three decisions that he described as “the (omitted)”; Calverley and Green (1984) 155 CLR 242; (1984) FLC 91-565, Muschinski and Dodds (1984-1985) 160 C.L.R. 583 and Baumgartner v Baumgartner (1987) 164 CLR 137; (1988) DFC 95-058).] [28]
·I accept that it would be unwise to accept the hearsay opinion of a builder about how much it would cost to complete the improvements to Property F.
[28] Page 8 of the transcript
I consider this to be a just and equitable manner in which to calculate the value of the asset pool, because it does not make Mr Manoly responsible for decisions in relation to Property F that he played no part in. I refer again to the judgement of Walters FM in OSF and OJK referred to above and state that it is not a separate and final substantive step in the intellectual process to determine what is just and equitable; it is a continuing process throughout the judicial decision making process.
This means that the gross total value of the asset pool is $368,787, and the relevant liabilities total $40,417, making the net value of the asset pool $328,370.
Contributions
Notwithstanding that Ms Farley claims at times to have made the majority of payments towards household expenses, and further, claims that Mr Manoly did not contribute sufficiently to those expenses, I have indicated above that I prefer to accept Mr Manoly’s evidence. In this regard, I am satisfied that Mr Manoly contributed as generously as his earnings would allow. At no time was it claimed that he was a high income earner.
During the parties’ first period of cohabitation from 1985 until February 2001, Mr Manoly made direct financial contributions that included:
·his savings (for the deposit on Property G);
·his earnings throughout, firstly as a (omitted) and later as a (omitted);
·his inheritance from his mother in 1992 and 1994 (total $46,500); and
·his inheritance from his aunt in 1997 and 2000 (total $49,810).
During the same period, Ms Farley made direct financial contributions from some part-time earnings working at a (omitted) and working for Mr Manoly’s cousin,[29] and from any funds that she received by way of Social Security benefits.
[29] Her evidence about the periods of work was confusing.
In Parshen & Parshen, their Honours Ellis, Finn and Purdy JJ said the following:
In our view, in the absence of evidence to the contrary, it should be inferred in proceedings pursuant to the provisions of s79 that moneys howsoever received by a party during the course of the parties’ cohabitation, are used by that party for the benefit of the family unit. Such moneys, in those circumstances, thus constitute a financial contribution by the party who received the moneys. [30]
[30] (1996) FLC 92-720 at page 83,665
That is the approach that I intend to adopt, given that I have concerns about Ms Farley’s claims in relation to financial contributions.
Very clearly, Mr Manoly’s direct financial contributions significantly outweighed those of Ms Farley during that first cohabitation period. I note for example, that the total value of Mr Manoly’s inheritances from his mother and aunt (to which Ms Farley claims no contribution) amounted to approximately $10,000 more than the purchase price of Property C.
The major contributions by Ms Farley during that period were as a homemaker and parent. It is also clear that the contributions “made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent”[31] should not merely be recognised in a token manner, but rather, they should be recognised in a substantial way. See Rolfe and Rolfe [32] and Mallet v Mallet.[33]
[31] Sub-section 90SM(4)(c)
[32] (1979) FLC 90-62
[33] (1984) FLC 91-507
This was reinforced in Ferraro, when the Full Court said:
The task of evaluating and comparing the parties’ respective contributions where one party has exclusively been the breadwinner and the other exclusively the homemaker, is a most difficult one to perform because the evaluation and comparison cannot be conducted on a “level playing field”. Firstly, it involves making a crucial comparison between fundamentally different activities, and a comparison between contributions to property and contributions to the welfare of the family. Secondly, whilst a breadwinner contribution can be objectively assessed by reference to such things as that party’s employment record, income and the value of the assets acquired, an assessment of the quality of a homemaker contribution to the family is vulnerable to subjective value judgments as to what constitutes a competent homemaker and parent and cannot be readily equated to the value of assets acquired. This leads to a tendency to undervalue the homemaker role.[34]
[34] (1993)FLC 92-335 per Fogarty, Murray and Baker JJ at page 79,572
Mr Manoly also made contributions to the welfare of Ms Farley’s three children from a former relationship, and he was under no legal obligation to do so. I accept that he not only got on well with those children (as admitted by Ms Farley), but he played a role as a substitute father to them.
During their period of separation from 2001 until 2007, Mr Manoly was making direct financial contributions to the conservation of Property C by paying the mortgage and the outgoings.
During that same period, Ms Farley used what should be treated as a joint asset, in the form of the proceeds of sale of Property G., to purchase the land at Property B. By the time that she sold the property in May 2007, the net value had improved quite significantly. However, that cannot be said to be solely Ms Farley’s contribution, because the “seed funding” came from the sale proceeds of Property G. (which I find should be treated as a joint asset).
Also during that period of separation, Ms Farley contributed more as a homemaker and parent than Mr Manoly, notwithstanding that for part of that period the parties’ son returned home to live with his father. However, I accept Mr Manoly’s evidence that he paid all Child Support to Ms Farley that he was assessed to pay.
After Ms Farley returned to Property C, she contributed $8,000 to the improvement of that property as stated in paragraph 15.1 of her affidavit. However, I do not accept that she paid all the bills as set out in the balance of that paragraph, and I refer again to the quotation from Parshen set out above.
After the parties separated in April 2009, Mr Manoly continued his contributions to the conservation of Property C and Ms Farley continued to assist the parties’ daughter, who was at that time not yet 17 years of age. However, I note that Mr Manoly said:
In December 2009 Ms Farley retuned to live at Property C. We did not resume our relationship. Ms Farley made no contribution the expenses (sic) of the household, or the mortgage. Ms Farley left in October 2010. [35]
[35] Paragraph 5(h) of his affidavit
Mr Manoly had also made that same statement in an earlier affidavit, to which Ms Farley responded in her trial affidavit. She said this in relation to that paragraph:
I agree with the first, second and fourth sentences. The third sentence is denied. X and Y were with me and I paid for all their expenses.
Because neither party was questioned about that, and I am unable to make a finding about the parties contributions to the welfare of the family during that post-separation period.
As can also be seen from the quotation from Ferraro above, weighing up and comparing contributions of a different type is not an easy task. Indeed, it is clear that the assessment of contributions is not an exercise of mathematical precision. In Hayne and Hayne, Pawley J said: [36]
In matters such as this one cannot approach the problem with an eye for meticulous detail. It should rather be dealt with broadly so that the end result can be said to be just and equitable.
[36] (1977) FLC 90-265 at p. 76,415
In Garrett and Garrett [37] the Full Court of the Family Court of Australia held that in long marriages, where the parties have devoted their resources and incomes for the benefit of the family, it is not possible to have a precise accounting of their contributions.[38] The same must apply to de facto relationships, and I point out that both parties in this matter continued to make contributions even when they were separated.
[37] (1984) FLC 91-539
[38] See also Poulos and Poulos (1984) FLC 91-515 at p. 79,184.
In Clives and Clives the Full Court said: [39]
We accept that the task to be undertaken by a trial Judge in assessing weight to be attached to initial contributions, and other contributions, is not always an easy one and not discharged by a strict accounting exercise.
[39] (2008) FLC 93-385 at paragraph 44
Further in Kessey and Kessey the Full Court also said: [40]
In many - indeed probably in most - property settlement cases the Court has to evaluate and assess contributions to property in the absence of precise valuations of the contributions in question. Indeed, where the contributions to property are indirect or non-financial, precise valuation is impossible, and even where the contributions are direct or financial so that a valuation might be provided, other factors (not capable of precise mathematical statement) may well have eroded the initial value of such contributions. In a case such as the present, it is not necessary to arrive at precise mathematical valuations of the parties' contributions - all that is necessary is to evaluate the weight that should be given to each party's contributions relative to the contributions of the other party.
[40] (1994) FLC 92-495 at page 81,150
Indeed, it is perfectly clear that an evaluation of the weight to be attributed to different types of contributions - such as direct financial contributions and indirect non-financial contributions - cannot be a mathematical exercise involving precise measurement.
In my view, this matter requires a weighing up of the contributions of the parties during the whole period from 1985 until their relationship finally broke down in April 2009. When I do that, I find that the parties’ contributions should be given similar weight, save that there should be a loading in favour of the husband, primarily arising from the contributions that he made from his two inheritances. That loading should be 5% of the net value of the asset pool.
I therefore conclude that if I was deciding this matter on contributions alone, it would be appropriate to attribute 55% to Mr Manoly and 45% to Ms Farley. However, I must also consider matters under sub-section 90SF(3) of the Act.
The sub-section 90SF(3) factors
Ms Farley is aged 58 years. At paragraph 3.3 of her affidavit she says that she is in reasonable health apart from some suffering from “(omitted)”.[41] However, she did not support her claims with any evidence from a medical practitioner, and I note that she is caring for her mother and working one day per week as a (omitted).
[41] Despite the impressive title that she gives to that condition, she states that it “has never been medically properly investigated”.
Ms Farley’s income comprises her wages from working as a (omitted) and a carer’s pension.
Ms Farley stated that she has three siblings who live nearby, but were happy to allow her to care for their mother because “they decided they were too busy”.[42]
[42] Page 20 of the transcript.
In her affidavit Ms Farley said that the parties’ 18 year old daughter “is a Year 13 student …. She receives a fortnightly payment of $255.80 from Centrelink, but is otherwise fully supported by me.”[43] I assume that she has now completed her schooling and, as such, is available to take on employment. I also note that, during the parties’ second period of cohabitation at Property C, Ms Farley also bought a “(omitted) business” for her daughter. On the evidence available, it is difficult to know whether she now requires any parental support, but at eighteen there appears to be no legal obligation on either parent to support her.
[43] At paragraph 5.2
Mr Manoly is aged 69 years and he continues his occupation of (omitted). However, being 9 years older than Ms Farley, it is likely that he is nearer the end of an effective working career than she is. Mr Manoly suffers from sleep apnoea and back pain, but he also provided no evidence from a medical practitioner.
When I weigh up these factors, particularly the fact that Mr Manoly is 9 years older than Ms Farley and she is caring for her mother because her three siblings are otherwise too busy, I conclude that there should be no further adjustment because of the sub-section 90SF(3) factors.
Calculations
As stated above, I find that the net value of the asset pool is $328,370. If Ms Farley is to receive 45% of that value, she should retain assets with a net value of $147,767.
She will retain her:
Investment in Property F $115,000 Mazda $3,100 Falcon $2,500 Bank account $100 (omitted Shares) $250 Total $120,950
However, she will also be responsible for paying her credit card and personal loan liabilities, with a total value of $6,922. That means that the net value of assets retained by her is $114,028. Therefore, in order to receive her entitlement of 45% of the net value of the asset pool, she must be paid a further $33,739 (which I will round up to $34,000.)
In the circumstances, I consider that it is just and equitable for Ms Farley to transfer her interest in Property C to Mr Manoly, in return for a payment of $34,000. The parties will otherwise retain the assets in their possession or control.
Mr Manoly has in excess of $25,000 available in his bank accounts. He gave evidence that he had cashed in superannuation in anticipation of paying an adjustment to Ms Farley, so I conclude that with the relatively easy availability of personal loans and credit on credit cards, it will not take him very long to raise the funds to meet my orders. I will therefore require the transfer and payment to take place within 45 days.
On the face of it, my award gives Mr Manoly more than the 50% that he was seeking in his Case Summary, but requires him to pay slightly more that stated in that document. I repeat what I said in paragraph 5 above about that and note that sub-section 90SM(3) states that I must not make an order unless I am satisfied that it is just and equitable to make the order in all the circumstances. Consequently, I conclude that I am not limited by the proposals of either party.
In the parties’ court documents they were each seeking an order for costs. I presume that they will wish to consider their positions in the light of these Reasons. Consequently, if either party wishes to pursue such an application, a re-listing should be sought by contacting my Associate within 28 days of today in accordance with Rule 21.02(1)(b) of the Federal Magistrates Court Rules 2001.
In relation to that, I am aware that both parties’ solicitors and Mr Manoly’s counsel are based in (omitted), while Ms Farley’s counsel is based in Hobart, so I am prepared to hear any costs application by telephone or video link in accordance with Division 5 of Part 6 of the Federal Magistrates Act 1999 if that is requested.
I certify that the preceding ninety-nine (99) paragraphs are a true copy of the reasons for judgment of Roberts FM
Date: 24 January 2012
0
3
3