Fielding v Bramich
[2014] TASSC 35
•16 July 2014
[2014] TASSC 35
COURT: SUPREME COURT OF TASMANIA
CITATION: Fielding v Bramich [2014] TASSC 35
PARTIES: FIELDING, Debbie Maree
v
BRAMICH, Leon Lyall
FILE NO: 761/2008
DELIVERED ON: 16 July 2014
DELIVERED AT: Hobart
HEARING DATES: 25, 26, 27 June 2014 and 14 July 2014
JUDGMENT OF: Holt AsJ
CATCHWORDS:
Family Law and Child Welfare – De facto relationships – Adjustment of property interests – Relevant considerations.
Relationships Act 2003 (Tas), s40.
Aust Dig Family Law and Child Welfare [496].
REPRESENTATION:
Counsel:
Applicant: G A Richardson
Respondent: S Hodges
Solicitors:
Applicant: G A Richardson
Respondent: Stephen Hodges
Judgment Number: [2014] TASSC 35
Number of paragraphs: 52
Serial No 35/2014
File No 761/2008
DEBBIE MAREE FIELDING v LEON LYALL BRAMICH
REASONS FOR JUDGMENT HOLT AsJ
16 July 2014
The application
The applicant and the respondent lived together in a marriage-like relationship between 2000 and March 2008. In September 2008 the applicant commenced this proceeding for an adjustive property order pursuant to the Relationships Act 2003 (Tas).
The Act specifies the circumstances in which such an application and orders thereon may be made. There is no dispute that the relationship was of the type that attracts the jurisdiction of the Court to make the order sought.
The major asset is a house at Lower Barrington on the north-west coast of Tasmania. It is in the sole name of the respondent. According to a valuation undertaken in September 2013 it is worth about $200,000. It is subject to a mortgage of about $22,000.
Firstly, the applicant seeks an order that the house be sold and that after repayment of the mortgage and payment of the sale expenses the proceeds be divided 95% to the applicant and 5% to the respondent. Secondly, the applicant seeks an order that each party retain whatever other property is currently in her or his possession. Thirdly, the applicant seeks an order that the respondent pay her legal costs incurred in the proceeding.
Background
I commence by setting out some background matters which, unless otherwise stated, are not the subject of dispute. Reciting the background explains why the applicant is seeking such a high percentage of the equity in the house.
At the commencement of cohabitation the Lower Barrington house was worth about $70,000 and subject to a mortgage of about $60,000. It was rented to tenants. The respondent was unemployed and lived with his parents. He owned a vehicle of little value. Besides personal and household effects he had no other assets. In contrast, the applicant owned a house at West Pine, also on the north-west coast of Tasmania, in which she lived with her two young children. Her house was worth about $80,000 and was unencumbered. She had savings of about $20,000 and owned a car worth about $15,000. She was in full-time employment.
The couple resided together at the applicant's West Pine house until early 2002. They decided that they would each sell their houses and purchase a new home together.
The applicant's house was sold in February 2002 with the balance proceeds, after sale expenses, being a little over $83,000. The respondent had little equity in his house. After sale expenses and repayment of the mortgage not much would have been left over from the sale of the respondent's house to contribute to the purchase of a new house. It was decided to undertake building work on the Lower Barrington house to improve its value before sale. A builder was contracted to build a one bedroom extension, replace the roofing iron, install a new kitchen and laundry and supply and fit built-in wardrobes. The contract price was $30,670.
The respondent was still unemployed and without money to contribute to the cost of the renovations. The applicant did not want to put her money into the Lower Barrington house whilst the title to that house remained in the names of the respondent and his former de facto partner. The respondent had previously settled any claim which his former partner had in respect of the property and so there was no impediment to the house being put into the respondent's sole name. It was decided that at the same time the title particulars were altered the Westpac mortgage should be discharged and a new housing loan taken out with the Commonwealth Bank. The Westpac mortgage of about $57,800 was paid out and replaced with a mortgage to the Commonwealth Bank which secured a housing loan of $45,000. The applicant paid the money necessary for this to occur. When various bank fees and other expenses were taken into account the cost to the applicant was about $14,000.
Building works commenced and the applicant rented a house in which she, her two children and the respondent lived. The family decided to move into the Lower Barrington house before the building work was complete. At this time the intention was still to sell the house. However, shortly after moving into the house the couple decided that rather than sell it, they would keep it as the family home. The applicant paid to the builder the contract sum of $30,670.
In addition to the cost of the building work, the applicant also paid for new carpets, new curtains, installing a new heat pump, sinking a bore hole, purchasing fencing materials and other miscellaneous items such as paint. The couple worked together undertaking renovation tasks such as stripping wallpaper, repainting and building fences.
The applicant estimates that the total she spent on renovations, including paying the builder amounted to about $45,000. Shortly after the couple separated the respondent, through his solicitor, acknowledged that about this sum had been paid by the applicant. The applicant has not kept receipts and so cannot prove her expenditure with precision. At the hearing the respondent disputed the amount of the claimed expenditure, but did not assert that the applicant had not paid the builder and did not assert that the applicant had not paid for carpets, curtains, fencing materials, paint etc. In light of the initial concession by the respondent of the amount now asserted by the applicant I find that the applicant spent about $45,000 on renovations at around the time the couple first moved into the Lower Barrington house.
Further, it is common ground that from early 2002 until the couple separated in March 2008 all mortgage instalments were paid solely by the applicant. The payments were about $170 per fortnight and the mortgage balance at the time of separation was a little under $36,000.
In terms of capital contributions to the time of separation, the applicant had caused the mortgage to be reduced from about $58,000 to about $36,000. A contribution of about $22,000. She had also contributed about $45,000 towards renovations. The total is about $67,000. The respondent's sole capital contribution was the contribution of his equity in the property in early 2002 being about $12,000. In summary, the applicant had contributed about 85% of the financial contributions of the parties to the acquisition of equity in the house and to the improvement of the house.
It is the applicant's case that during cohabitation she paid most of the rates and electricity bills. Also, it is common ground that she paid for almost all food and cleaning products for the family subject to the respondent making a contribution of about $1,200 per year, whilst he was employed between early 2004 and separation in March 2008. The respondent was unemployed and not in receipt of any government benefit until he returned to the work force in early 2004. By then the applicant who was supporting him and her two children had exhausted all, or almost all, of the $83,000 she had received on the sale of her West Pine home.
It is against this background that the applicant's claim for a division of the Lower Barrington house, 95% to her and 5% to the respondent, is pursued.
The law
The Act, s40, is as follows:
"Order for adjustment
(1) On an application by a partner for an order for the adjustment of interests in respect of the property of either or both the partners, a court may make any order it considers just and equitable having regard to –
(a)the financial and non-financial contributions made directly or indirectly by or on behalf of either or both of the partners to the acquisition, conservation or improvement of any of the property; and
(b) the financial resources of either or both of the partners; and
(c)the contributions, including any contributions made in the capacity of homemaker or parent, made by a partner to the welfare of the other partner or to the welfare of the family constituted by the partners and one or more of –
(i) a child of the partners; or
(ii)a child accepted by either or both the partners into the household of the partners, whether or not the child is a child of either of the partners; and
(d) the nature and duration of the relationship; and
(e) any relevant matter mentioned in section 47.
(2) A court may make an order in respect of property whether or not it has declared the title or rights of a partner in respect of the property."
The matters mentioned in s47 include:
·the income of each partner,
·the resources of each partner,
·the financial needs and obligations of each partner,
·the age and state of health of each partner,
·the standard of living that is reasonable for each partner,
·the length of the relationship, and
·any other matter which in the circumstances of the case is considered relevant.
The Act, s40, has a near equivalent in the Family Law Act 1975 (Cth), s79. Accordingly, guidance can be found as to matters of approach in decisions made under the Family Law Act. As set out by the Full Court of the Family Court of Australia in Hickey v Hickey [2003] FLC 93-143 at par39, the preferred approach involves four steps. Namely:
(1)Identification and valuation of the property, liabilities and financial resources of the parties at the date of the hearing.
(2)Identification and valuation of the contributions of the parties, financial and non-financial, to the acquisition, conservation and improvement of the property and also contributions made to the welfare of the family. A contribution based determination can then be made expressed as a percentage of the net value of the property of the parties.
(3)Identification and assessment of other relevant matters and determination of the adjustment (if any) which should be made to the contribution based entitlements.
(4)Resolution of what order is just and equitable in all the circumstances of the case.
However, as was pointed out by Wilson and Dawson JJ in Norbis v Norbis (1986) 161 CLR 513 at 532 and 533, the legislation does not dictate the employment of any particular methodology in the formulation of an appropriate order for the alteration of property interests. Consistency of approach, although desirable, should not be elevated to a position whereby a single approach needs to be rigidly applied in every case. For example, if the parties' interests in specific items of property differ it may be desirable to proceed upon an item-by-item basis rather than an overall division of the total net asset pool.
An approach suited to the circumstances of the case
For the following reasons I consider that the approach best suited to the circumstances of this case is to confine consideration to what, if any, adjustive property order should be made in respect of the Lower Barrington house.
Firstly, the parties are content that besides the house each should keep whatever assets and resources are presently in her or his possession.
Secondly, neither party claims to have materially contributed to assets currently in the possession of the other except in respect of the house.
Thirdly, aside from the house neither party has net assets of much value. The applicant has about $19,000 in savings and owns two motor vehicles with a combined value of about $15,400. She owes about $12,000 on one of the cars and has a HECS debt of about $7,000. By way of resources she has a superannuation investment worth about $45,000. The respondent has about $13,000 in savings. He owns a motor vehicle. He has no debts. As a resource he has a superannuation investment worth about $41,000. Each party also owns household effects of modest value.
Fourthly, the financial and personal circumstances of the parties can adequately be taken into account in the consideration of what (if any) adjustive property order ought be made in respect of the Lower Barrington house.
The contributions of the parties to the acquisition, conservation and improvement of the house and to the welfare of the family
I have earlier set out the respective financial contributions of the parties to the acquisition, conservation and improvement of the house during cohabitation. The applicant's financial contributions amounted to about 85%. However, since separation in March 2008 the respondent has continued to live in the house. He has paid the mortgage instalments due with the result that the mortgage balance has reduced from about $36,000 to about $22,000 between separation and the present. He has paid all outgoings in respect of the house since separation. He claims to have also paid for maintenance and improvements including a total expenditure of about $20,000 for items such as a new wood heater, a new oven, a new hot water cylinder, a bathroom renovation, new lights and light fittings and new blinds and curtains.
Not all of the respondent's claimed expenditure is supported by receipts or other documentation. The respondent has given evidence that he incurred the expenditure for the purposes stated. There is no reason to disbelieve him on this aspect of the dispute. I find that since separation he has paid all outgoings in respect of the house and spent about $20,000 on the household items specified in his evidence.
There is valuation evidence that the current market value of the property being about $200,000 would only have been about $180,000 but for the maintenance and improvements carried out by the respondent since separation.
Notwithstanding this, I do not propose to make any adjustment in favour of the respondent for his post-separation contribution to the maintenance and improvement of the house. This is because he has enjoyed sole occupation of the property since March 2008 without having paid to the applicant rent or any other money in respect of her equity in the house.
I now turn to the respective contributions to the welfare of the family.
The evidence of the applicant is that during cohabitation she paid all household expenses including rates and electricity. Her evidence is that she did all of the cooking and almost all of the housework.
The respondent said in his affidavit "at times I paid rates and power bills". When he came to give evidence in the witness box he said that he paid the rates by personally going to Service Tasmania to make the payments. When it was pointed out that rates are paid to the Council and not to the State Government he changed his evidence. He said that he paid cash to the applicant sufficient to cover the rates bills when they came in. In the witness box the respondent initially said that he paid the electricity bills three times a year and later amended his assertion to two times a year. The respondent conceded that he did not contribute money to the household expenses whilst he was unemployed between 2001 and early 2004. He said that whilst he was unemployed he did most of the cooking and undertook most of the domestic tasks for the family. He said that even when he was employed he still undertook about 40% of the cooking and housework.
I was impressed with the applicant as a reliable witness. The evidence which she gave was internally consistent and consistent with the limited documentary evidence available to me. On the other hand the respondent's evidence about his contributions to the welfare of the family changed in relation to his assertions about the payment of rates and the payment of electricity bills. Some of the respondent's affidavit evidence was misleading. For example, he said in his affidavit that he "took both children to places like the pancake parlour and a maze". He did not give evidence of other recreational outings with the children and in cross-examination conceded that the pancake parlour and the maze is one and the same place and that he only went there once and that was with one of the children only and not both. He said in his affidavit that he "went to the childrens' parent teacher nights at school". In cross-examination he agreed that he had never been to a parent teacher night. These are examples of the respondent exaggerating the extent of his contributions to the welfare of the family.
On the matter of contributions to the welfare of the family I prefer the evidence of the applicant. I am persuaded that the significant majority of the payments for rates and services came from the applicant and that over the period of cohabitation the vast majority of cooking and housework and other contributions for the welfare of the family came from the applicant.
The family included the applicant's two children. No doubt, the household expenses and household tasks were substantially increased because of the presence of the children. Accordingly, the weight attributed to the applicant's contribution, financial and non-financial, to the general welfare of the family needs to be discounted.
The adjustive property order should include some allowance for the applicant's extra contributions. The respondent's financial statement says that he currently spends $100 per week for food. It is common ground that during the relationship the respondent's contribution to the grocery bills was only about $1,200 per year. That equates to about to $23 per week for week for food. Even if the respondent had paid the entirety of the rates, being about $1,000 per year, and 50% of the electricity bills received his financial contributions were unlikely to even cover the cost of the food which the applicant was purchasing for him.
I will make an uplift of the contribution based entitlements in respect of the house in favour of the applicant for her additional contribution, financial and non-financial, to the welfare of the family.
Other factors
Much of the hearing time was taken up with evidence about the value of a Ford Capri ute owned by the respondent and the value of some vintage motorcycles which the respondent had rebuilt. For the reasons which follow I do not propose to uplift the applicant's entitlement in respect of the ute, which the respondent still owns, nor in respect of the motorcycle collection, which the respondent says he has sold.
The Ford Capri ute came into existence when the respondent purchased a Ford Capri sedan from a wrecker. He removed the back half and grafted onto the vehicle a tray. He installed a Leyland P76 4.4 litre V8 engine and did other work on the vehicle. The respondent's evidence was that he sold the vehicle in 2008 shortly after the couple separated. The sale price was $4,500, with the buyer contracting him to do further work on the vehicle for an agreed price of $5,000. The respondent's evidence was that he did the work as agreed, but when it came time for the buyer to pay the balance the deal fell through. The respondent said that he refunded to the buyer about $2,000 of the $4,500 previously paid. The applicant argues that the vehicle has a significantly greater value than the nominal value attributed to it by the respondent. If the 2008 deal had gone through the respondent would have received a total of $9,500 for the car. Even if the car is worth something in the order of $9,500 it would not be enough to have any material impact on what order is just and equitable in respect of the division of the Lower Barrington house.
As a hobby the respondent purchased vintage motorcycle parts which he restored and assembled creating six motorcycles, none of which were in roadworthy condition. There is evidence from the respondent and the purchaser that shortly after separation the six motorcycles were sold for $4,000. The applicant asserts that the motorcycles were worth far more than this and that the sale to the purchaser has the appearance of a sham. The applicant relies upon email correspondence between the respondent and a potential purchaser of two or three of the motorcycles in 2007. The respondent had put two of the motorcycles on eBay for sale. A prospective purchaser indicated that he was willing to buy the two motorcycles for $13,500 for the pair. The potential purchaser did not want to buy on eBay. The respondent offered to him a third motorcycle at a total price for the three of $20,000. The potential buyer travelled to Tasmania. He inspected the motorcycles and made an offer for one only. The offer was $2,000 and was rejected. The applicant has access to photographs and descriptions of the motorcycles, but no valuation evidence was presented. The result is that there is insufficient evidence to support a finding that the motorcycles have a significantly greater value than $4,000 or that the sale of them was a sham with the intent that the respondent would retrieve them upon the conclusion of this litigation.
In any event, the applicant did not put her time or money into the acquisition and improvement of the Ford Capri ute and the motorcycles. She put her money and effort into the house and the welfare of the family and her contribution will be taken into account in the division of the house. Although the applicant's financial contributions may have given the respondent extra money to spend on the ute and the motorcycles, if an adjustment is also made in respect of the ute and the motorcycles there will have been a double counting of the applicant's contribution.
No uplift in favour of the applicant in respect of the division of the equity in the Lower Barrington house will be made on account of the ute or the motorcycle collection.
The respondent claims to have been disadvantaged by the delay in bringing the case to trial. He asserts that as he has grown older his chance of borrowing sufficient money to pay out the applicant has diminished and that his chance of developing a new relationship has been adversely impacted by the uncertainty as to his financial affairs. In my view, the delay could have been avoided by either of the parties invoking the assistance of the Court. The Court file discloses no effort by either party to get the case listed promptly. Some delay might have resulted by reason of the respondent changing his legal representation several times. His current solicitor is his fourth. The previous three solicitors all had their services terminated because the respondent did not agree with the advice which they had given him. Delay has had an adverse impact on the applicant in the sense that her entitlement has not been recovered promptly. On the basis that both parties are responsible for the delay and that both parties have been adversely affected by it I do not propose to make any adjustment in favour of either in respect of delay.
I now turn to the other factors to be taken into account in the determination of what order is just and equitable.
The parties are in good health. The applicant is aged 47 years and the respondent is aged 56 years. Both have employment. The applicant is self-employed and has a gross weekly income of $337 per week. The respondent works as a security officer and has a gross income of $994 per week. Neither party currently has the care of dependent children. The superannuation savings of each are roughly similar. The applicant is about 9 years younger than the respondent and accordingly might be expected to remain in the work force for longer than him. However, the respondent has a significantly higher income and so is likely to accumulate savings at a faster rate than the applicant.
At the commencement of the relationship the applicant owned a house outright. She had savings of about $20,000 and owned a car worth about $15,000. Excluding superannuation she now has net assets, after taking into account her car loan and HECS debt, of about $15,000 and her personal and household effects.
At the commencement of the relationship the respondent had equity of about $10,000 in the Lower Barrington house. He had his personal effects and nothing else of significant value. Excluding superannuation, besides the house, his net assets now are comprised of his savings of $13,000, his personal and household effects, and not much else.
In short, at the start of the relationship the combined net assets of the parties totalled about $125,000. $115,000 or about 92% of the asset pool was property of the applicant. Now the applicant has net assets of about $15,000. The respondent has the equity in the house being about $178,000 and savings of about $13,000. The position is the reverse of the position at the start of the relationship. The respondent now has 92% of the net asset pool.
What is just and equitable?
During cohabitation the applicant's financial contributions to the acquisition of equity in the house and to conservation and improvement of the house amounted to about 85% of the total. She undertook more than her fair share in respect of the welfare of the members of the household through her contributions financial and non-financial. I have already found that an uplift in respect of the applicant's contributions to the welfare of the family ought to be made.
The applicant came into the relationship with net assets comprising about 92% of the total. In the circumstances set out in these reasons it would not be just and equitable to leave her now with significantly less.
There will be orders which will result in the applicant having 90% of the value of the Lower Barrington house after payment of about $22,000, being the current mortgage balance, and payment of any expenses associated with the sale of the house.
I will hear counsel as to the form of the orders which should be made to give effect to this decision and as to costs.
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