Fitzgibbon & Fitzgibbon
[2021] FCCA 1917
•19 August 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Fitzgibbon & Fitzgibbon [2021] FCCA 1917
File number(s): ADC 4096 of 2017 Judgment of: JUDGE KARI Date of judgment: 19 August 2021 Catchwords: FAMILY LAW – property – assessment of contributions and future needs – consideration of financial resource – orders made for the pool to be divided 65/35 in favour of husband Legislation: Family Law Act 1975 (Cth), ss 75(2), 79(4), 102NA, Part VIII Cases cited: Bevan & Bevan [2013] FamCAFC 116
Hickey & Attorney-General (Intervener) (2003) FLC 93-143
Jabour & Jabour [2019] FamCAFC 78
Stanford & Stanford (2011) FamCAFC 208
Number of paragraphs: 122 Date of last submission/s: 10 June 2021 Date of hearing: 8 June 2021
9 June 2021
10 June 2021Place: Adelaide Counsel for the First Applicant: Mr McQuade Solicitor for the First Applicant: Daniel John Lawyers Counsel for the First Respondent: Mr Bowler Solicitor for the First Respondent: SE Lawyers ORDERS
ADC 4096 of 2017 BETWEEN: MS FITZGIBBON
Applicant
AND: MR FITZGIBBON
Respondent
ORDER MADE BY:
JUDGE KARI
DATE OF ORDER:
19 AUGUST 2021
THE COURT ORDERS THAT:
1.That these orders stand as authority for the husband’s solicitors to forthwith disperse those funds presently held in the SE Lawyers trust account as follows:
(a)The sum of $45,188.00 to the wife; and
(b)The balance remaining to the husband.
2.That the parties otherwise each retain those assets in their respective sole name, possession and/or control.
3.That the wife retain her superannuation entitlements.
4.That the parties each pay and fully indemnify the other with respect to their separate debts and liabilities.
5.That the proceedings otherwise be dismissed as finalised.
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment under the pseudonym Fitzgibbon & Fitzgibbon is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE KARI
INTRODUCTION
These proceedings relate to the division of property between the parties arising from their marriage.
The parties have one child, X, who is sixteen and a half years old.
The parties have been in litigation regarding both parenting and financial issues from the time that the wife commenced these proceedings on 29 September 2017.
The parenting issues ultimately resolved by consent with orders made on 18 February 2020.
The litigation between these parties has been protracted. This is unfortunate because from my observation the delays in a resolution of these proceedings has heightened the stressors for these parties. In addition, I am also concerned that the parties respective financial circumstances are such that they can each ill afford the costs of litigation.
I comment from the outset that the wife has been represented at trial pursuant to a grant of funding made available to her through the Family Violence and Cross Examination of Parties Scheme. This grant of funding was made available to the wife as a consequence of the provisions in section 102NA of the Family Law Act 1975 (Cth), which for present purposes provides a mandatory ban on the parties each personally cross-examining the other at trial because there is a Final Intervention Order made on 17 April 2017 naming the Husband as the protected person and the Wife as the defendant.
This case is a good example of both the virtues and the vices of that scheme.
Unquestionably, the ethos of the scheme which is designed to protect victims of family violence from further re-traumatisation is entirely appropriate.
From my observation in this case, the representation of both parties by experienced solicitors and counsel has been of great benefit to the court, as a focus has been brought to bear on the actual issues in dispute. This has meant that while the parties’ trial affidavits contained detailed accounts of matters pertaining to family violence, ultimately those issues did not need to be traversed in cross examination during the trial as counsel agreed that those issues were not relevant to the determination of the question of property settlement in the circumstances of this particular case. I apprehend that had the parties been permitted to be self-represented, much of the trial would have focussed on these issues. I imagine that would have been distressing for both of these parties. In addition, had the trial proceeded on that basis I imagine that it would not have been completed in the three sitting days that had been allocated.
On the reverse of this positive outcome is that a downside of the scheme is that litigants can pursue their case seemingly without compunction. Importantly, and despite the grant of funding pursuant to the scheme being administered by the Legal Services Commission (legal aid), the grant is available to all those to whom the ban on cross examination applies without any merit testing as would be done for example by a legal aid commission when assessing an application for a grant of legal aid.
In the present case, and despite my earlier comments as to a narrowing down of the issues traversed at trial, I fear that the matter was more protracted than it ought to have been.
I have come to this view in this matter, because in the end this case is not an overly complex matter; the assets to be divided are modest, many of the factual disputes are inconsequential and the actual issues in dispute are readily identifiable and should have been capable of resolution without the need for a judicial determination.
In many respects the circumstances for this family are simple and they are profoundly sad. I say this because:
(a)Neither of these parties have been in paid employment for a long period of time, and there seems to be no real prospect that this will change in the future.
(b)The wife unquestionably suffers from ongoing mental health issues which render her incapable of re-entering the workforce.
(c)The husband has since physical separation in April 2017 been solely occupied with the care of the parties now sixteen year old daughter X.
(d)X on any view has significant challenges, which include difficulties with her school attendance and she is legally blind.
(e)The pool of property to be divided is such that both parties, regardless of the outcome, will likely continue to have financial struggles well into the future.
SHORT HISTORY
The short history of the parties and their relationship is as follows:
(a)The husband was born in 1961 and he is 60 years of age.
(b)The wife was born in 1968 and she is 53 years of age.
(c)The wife is from Country B, and she first came to Australia on a student visa in 2000.
(d)There is a dispute as to the exact date the parties commenced living together with the wife asserting that it occurred in about mid-2001, and the husband asserting that it occurred in 2004.
(e)There is agreement however that for a period of approximately 10 months between 2003 and 2004, the wife was required to leave Australia as she had overstayed her visa.
(f)The wife returned to Australia in 2004 and the parties lived together upon her return.
(g)The parties married in 2004.
(h)The child X was born in 2005.
(i)The wife asserts that the parties separated under the same roof in or about March 2013, whereas the husband asserts that separation under the same roof occurred in or about July 2013.
(j)Physical separation took place on 14 March 2017 as a consequence of an Intervention Order being made naming the husband and at that stage also the child X as protected persons and the wife as the defendant.
THE PARENTING ARRANGEMENTS
As I indicated from the outset, when the wife commenced these proceedings she also sought parenting orders in relation to X.
While I was not the Judge to whom the proceedings were originally allocated, this matter has been before me since my appointment to the court in March 2019. As a consequence, I have had the proceedings before me on numerous occasions and I have a recollection of matters that have taken place so far as the parenting arrangements for X are concerned. I observe that issues in relation to X have been fraught with difficulty and complexity throughout the period of time that the matter has been before me.
Ultimately and to their mutual credit, the parties were able to agree final orders in relation to X’s arrangements on 18 February 2020. Those orders provide for X to live with and spend time with each of her parents in accordance with her own wishes.
I also understand from all of the evidence presented at trial (both sworn and oral), that X has a difficult relationship with the wife. From the evidence that I heard it appears that X does not spend any significant periods of time living in the wife’s home. Rather, it would appear that the wife and X “visit” each other for short periods of time consisting of no more than a few hours at a time on a sporadic basis.
While the wife does not necessarily agree with or accept the expert opinions that have been provided, it is also apparent that X has some significant difficulties with her eye sight. In particular the husband has produced a report from an Ophthalmologist[1] which identifies that:
(a)X has been diagnosed with “myopic astigmatism”, and she is said to be legally blind.
(b)X does not presently meet the legal requirements to be able to drive a motor vehicle.
[1] Annexure “A” – Report of Ophthalmologist Dr C to the Affidavit of the Husband filed 11 May 2021.
As no evidence was before me offering any differing diagnosis, I accept the expert opinion that has been provided by X’s Ophthalmologist.
In addition, the parties agree that X was “home-schooled” by the wife up to the parties’ physical separation in April 2017. Since the parties’ physical separation, X has attended mainstream schooling, however her school attendance has been extremely problematic. Among the many problems presented by X’s chronic poor school attendance has been the impost on the husband to do all things that he can to have her physically attend school, including driving her some distance to and from school each day.
The husband has been able to have X assessed in recent times and it appears that there may be some corollary between X’s sight issues and her poor school attendance. X is reported to not have “good self advocacy skills, as she has not been in the position to know that she can request that access to the curriculum could be made easier for her; her strategy has been refusal to work and to cooperate.”[2]
[2] Annexure “J” - Report of Ms H, South Australian School for Vision Impaired, Statewide Support Service of the Affidavit of the Husband filed 11 May 2021.
Again, in the absence of any alternate evidence, I accept these opinions in relation to X and the difficulties she has faced with her schooling.
FINANCIAL ARRANGEMENTS BETWEEN THE PARTIES
While there is a dispute between the parties as to when they first began living together (2001 on the wife’s version and 2004 on the husband’s version), it does not strike me that anything of significance turns on this dispute, particularly given it appears there was no financial enmeshment between the parties prior to the wife’s return to Australia in 2004.
The parties agree that when the wife returned to Australia in 2004, they lived together in a rental property in Suburb D. At that time, the wife was not in paid employment and the husband was working as a health care worker at Employer E.
Over the course of the relationship the husband maintained his employment as a health care worker, until 2015 when he resigned. The husband resigned from his employment as a result of the resolution of a WorkCover claim that he had made for various injuries sustained at work between 2002 and 2013. The settlement of the husband’s WorkCover claim saw him receive a lump sum of approximately $37,000.00.[3]
[3] Annexure “-3” and Annexure “-4” of the Affidavit of the Wife filed 15 May 2021.
The husband gave evidence, which I accept that after the payment of legal costs and other disbursements the net payment that he personally received in settlement of his WorkCover claim was approximately $16,000.00.
So far as the wife’s employment throughout the relationship is concerned:
(a)The wife worked at Employer F as a manager between 2004 and 2005, albeit that she took maternity leave during that period when X was born.
(b)The wife worked as a professional at Employer G between 2006 and some time in 2007.
(c)The wife worked as a professional at the Employer J from 2009 until 2009.
As a result of the evidence that I heard during the trial I am satisfied that each period of the wife’s employment ended as a consequence of the wife making a WorkCover claim for issues that can best be described as stress related. I am also satisfied that the claims made by the wife were resolved on the basis of a lump sum payment to her for wages that were not paid to her between the period that she ceased employment until each claim was resolved. The funds that the wife ultimately received by way of reimbursement of income were as follows:
(a)The net sum of approximately $31,784.00[4] received in 2006 relating to employment with Employer F which ceased in 2005.
(b)The net sum of approximately $62,389.00[5] in early 2008 relating to her employment with Employer G which ceased some time in 2007.
(c)The net sum of approximately $96,220.00 in 2016 relating to her employment with the Employer J which ceased in 2009; noting that for a period of time after that employment ceased, the wife received regular weekly WorkCover payments and accordingly the lump sum covered a period of approximately two years of income for the period between when the weekly WorkCover payments ceased and the lump sum payment was made.
[4] Exhibit “H1”
[5] Exhibit “W2”
Both parties have been in receipt of various forms of Centrelink entitlements following the conclusion of their respective WorkCover claims. The parties each continue to receive and rely on Centrelink entitlements.
During the relationship the parties purchased the former matrimonial home at Suburb K. The total purchase price inclusive of all fees and adjustments was $248,156.00.[6] The purchase was funded by a combination of monies provided by the wife, the first home owners grant in the amount of $7,000.00 and the balance by way of mortgage. With reference to a bank statement that the wife disclosed[7], the settlement statement for the purchase of the property[8], and the wife’s oral evidence, I am satisfied that the wife applied the following amounts to the purchase of the Suburb K property:
(a)The sum of $5,000.00 by way of deposit for the purchase of the property;
(b)A portion of the savings that she had accumulated in Country B which was applied as a lump sum payment towards the mortgage in 2005 in the amount of $34,516.00; and
(c)Two further payments of $1,000.00 from her separate savings towards the mortgage on each in 2005.
[6] Exhibit “W1”
[7] Annexure “-1” to the Affidavit of the Wife filed 12 May 2021.
[8] Exhibit “W1”
When the parties separated, the husband and X remained in the Suburb K property. The property was ultimately sold by auction on 6 May 2020 for $280,000.00 pursuant to orders made by this court. The parties each received an amount of $30,000.00 from the proceeds of sale. The remaining net proceeds of sale in the amount of $203,690.07 are presently held in the trust account of the husband’s solicitor.[9]
[9] Annexure “E” to the Affidavit of the husband filed 11 May 2021.
During the trial, the parties evidence was such that they agreed that they each maintained their own separate bank accounts during the relationship, and they each had limited knowledge of each other’s finances.
I am otherwise satisfied from the evidence that I heard that the parties also had a broad agreement that the wife would cover the mortgage payments for the Suburb K property and the husband would in the main cover the other household and day to day expenses.
The wife’s case is that the husband was a poor financial manager and that he did not always contribute financially. In support of this assertion the wife points to a range of factors that her counsel was able to illicit from the husband during cross examination, including:
(a)That the husband had withdrawn the entirety of his superannuation entitlements in the period prior to and following the physical separation of the parties.
(b)That prior to the physical separation of the parties the husband had entered into at least two payment plan arrangements with a debt recovery service known as “Company L”.
(c)The husband’s assertion that in the post separation period he had not been able to maintain the payment plan arrangements for a motor vehicle that had been in his possession and that the vehicle was subsequently repossessed.
(d)That in the post separation period the husband was not able to keep up with the various outgoings for the Suburb K property such that when the property sold there were liabilities owing for water and rates and taxes which were paid from the net proceeds of sale.
On the other hand, it is the husband’s case that the financial circumstances of the parties during the relationship were parlous, and that in the period following physical separation they have continued to be so.
Of significance however, the wife received an inheritance from the estate of her late father in or about 2016 in the amount of approximately $142,000.00. The wife applied these funds to the purchase of a property in which she now resides at Town M, South Australia.
LEGAL PRINCIPLES
The jurisdiction of the court to make orders with respect to the financial matters arising out of a marriage are set out in Part VIII of the Family Law Act 1975 (Cth) (hereinafter referred to as “the Act”).
Section 79 of the Act empowers the court to make such orders as it considers appropriate when determining the question of property settlement.
The legal principles relevant to adjusting property interests on the breakdown of a marriage were considered by the High Court in Stanford & Stanford (2011) FamCAFC 208 (‘Stanford’).
In particular, the High Court identified:
(a)Firstly, that the court must identify the existing legal and equitable interests of the parties in the property, liabilities and financial resources of the parties at the time of the hearing; and
(b)Secondly, and importantly, that in the application of section 79(2) of the Act, the court must not make any order adjusting the parties legal and equitable interests in property unless the court is satisfied that “in all of the circumstances, it is just and equitable” to do so.
(c)If the court determines that it would be just and equitable to make orders adjusting the parties interests in property, then section 79(4) of the Act requires:
(i)The consideration of the contributions made by the parties to the acquisition, conservation and improvement of any property, both of a financial nature but also of non-financial nature;
(ii)The effect of any proposed orders on the earning capacity of each of the parties;
(iii)Those relevant factors set out in section 75(2) of the Act;
(iv)Any other order affecting each of the parties; and
(v)Any child support either party has or is liable to provide, or might be liable to provide in the future for a child of the relationship.
(d)Finally, the court must consider the “justice and equity” of the actual orders to be made.
Prior to the decision in Stanford, the appropriate approach in a property settlement case was well settled and had been distilled into the “four step process” as identified by the Full Court in Hickey & Attorney-General (Intervener) (2003) FLC 93-143 as follows:
(a)Identification of the value of the property of the parties;
(b)Identification and evaluation of the contributions of the parties to the acquisition, conservation and improvement of the property;
(c)Identification and assessment of the relevant future needs factors of the parties; and
(d)Considerations of justice and equity.
The significance of the decision in Stanford with reference to the four step process was discussed by the Full Court in Bevan & Bevan [2013] FamCAFC 116 (‘Bevan’). In that decision, the Full Court identified that the four step process “merely illuminates the path to the ultimate approach,” but that the overarching obligation of the court is not to make an order unless it is just and equitable to do so.
In Stanford at paragraph 42, the Full Court identified:
“In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order …”
Both of the parties have competing applications for property adjustment before the court. While the only jointly held asset namely the Suburb K property has been sold, the net proceeds of sale remain in the trust account of the husband’s solicitor and the parties have no common intention as to how those proceeds are to be distributed.
I accordingly consider that in those circumstances it is just and equitable to make an order adjusting the interests in property of each party.
I otherwise propose to adopt the four step approach.
THE PROPERTY OF THE PARTIES
Counsel for each of the parties prepared a Case Outline in the matter. From those respective outlines it is apparent that the parties were broadly in agreement as to the vast majority of the property held by each of them as follows:
Asset
Ownership
Value
Net proceeds from sale of Suburb K property
Joint
263,690.07
Interim distribution of proceeds of Suburb K property
Husband
30,000.00
Interim distribution of proceeds of Suburb K property
Wife
30,000.00
N Street, Town M
Wife
252,000
Motor Vehicle 1
Wife
3,000
While I have recorded the net proceeds from the sale of the Suburb K property as $263,690.07, I am cognisant that the amount has been reduced by $60,000.00 on account of the $30,000.00 interim distribution that each party received. Accordingly, the amount presently preserved in the solicitors trust account is an amount of $203,690.07.
I propose to deal separately with the items that were otherwise the subject of dispute between the parties.
The Husband’s motor vehicles
The wife asserted that two motor vehicles owned by the husband be bought to account; a Motor Vehicle 2 at a value of $6,000.00 and the proceeds from the sale of a Motor Vehicle 3 in the amount of $1,000.00.
In his trial affidavit filed on 11 May 2021 the husband deposed:
“I purchased a Motor Vehicle 3 in mid 2020 for $3,000. I traded the Motor Vehicle 2. I was able to purchase this car from the interim property settlement that I received upon settlement of the Suburb K property. Twenty thousand dollars ($20,000) of my interim property settlement went towards a portion of my outstanding legal fees.”[10]
[10] Affidavit of the Husband filed 11 May 2021, paragraph 34.
The husband was not challenged about this evidence. I accordingly accept this evidence.
In light of the husband’s evidence, and in circumstances where the parties both propose to bring to account the full amount of the interim property settlement that they each received, I do not consider it appropriate to include either vehicle that the wife asks the court to bring to account. To do so in my view would be double counting.
The liabilities of the parties
There were no liabilities from the wife’s perspective.
From the husband’s perspective there were four separate liabilities that the husband included in the schedule of assets and liabilities set out in his case outline as follows:
(a)A Company L loan owed by the husband in the amount of $11,000.00;
(b)A store 1 MasterCard held by the husband in the amount of $1,000.00;
(c)A store 2 MasterCard held by the husband in the amount of $5,000.00; and
(d)A child support liability owed by the wife in the amount of $7,433.42.
In his affidavit filed 16 December 2019, the husband deposed to having a “Company L loan” in the amount of $11,000.00, together with a store 1 Mastercard liability of $1,000.00 and a store 2 MasterCard liability of $5,000.00.
All the husband deposed to as to these liabilities was as follows:
“I say that my loan and credit card liabilities have been incurred during the relationship and following separation under the same roof when I was paying expenses for X and the household.”[11]
[11] Affidavit of the Husband filed 16 December 2019, paragraph 82.
In relation to the Company L liability:
(a)During cross examination of the husband it became apparent that there was more than one Company L liability.
(b)As a consequence, the wife’s counsel asked the husband to produce a current statement for the Company L loan.
(c)The husband produced two statements:
(i)One for a liability for the period 24/3/2014 to 7/1/2021, which had an opening balance of $1,430.46 and a closing balance of $4.46. This loan appeared to have been paid off initially at the rate of $25.00 per fortnight for a short period of time and thereafter at the rate of $5.00 per fortnight.[12]
[12] Exhibit “W4”
(ii)A second for a liability for the period 18/02/2015 to 7/1/2021, which had an opening balance of $14,353.19 and a closing balance of $11,229.81. This loan appeared to have been paid off initially at the rate of $45.00 per fortnight and thereafter at the rate of $20.00 per fortnight.[13]
(d)The husband gave oral evidence that the liability of around $11,000.00 related to a car loan for a four wheel drive motor vehicle that he had purchased but had been repossessed in about 2017 as he had been unable to meet the loan payments towards the vehicle.
(e)The husband could not recall what the smaller Company L liability related to.
(f)The husband’s evidence was that he had largely complied with the payment arrangements for both liabilities, and that the funds were being directly withdrawn from his account.
(g)In light of this evidence, and while I do not have a statement for either liability beyond 7 January 2021, I am satisfied that the husband would have continued to make payments towards each liability beyond that date in the same fashion as had previously occurred.
(h)I accordingly consider that I am able to infer that the smaller of the two loans has now been fully discharged given the nominal balance that was outstanding and on the assumption that the $5.00 per fortnight rate had been maintained.
(i)In relation to the larger of the two liabilities, and without doing a precise calculation, I accept that the balance is likely to now be in the vicinity of $11,000.00, on the assumption that the $20.00 per fortnight payments had been maintained.
(j)In circumstances where this liability was in existence prior to the physical separation of the parties, I consider that it is appropriate that the same be included in the property of the parties to be divided.
[13] Exhibit “W5”
In relation to the store 1 MasterCard and store 2 MasterCard liabilities:
(a)The wife does not accept the inclusion of either of these MasterCard liabilities.
(b)During cross examination of the husband, the husband was asked questions by the wife’s counsel to try and understand both liabilities. In answer to those questions the husband asserted that both credit cards facilities were held by him during the parties relationship, however he could not recall when he opened the accounts and nor the balance owing on the accounts at the time of separation.
(c)As a consequence of this evidence, the wife’s counsel called for production of statements for both accounts.
(d)The husband did not produce any statements for either MasterCard liability.
(e)The husband did however produce documents for his National Australia Bank (“NAB”) savings account, which were also the subject of a call for production during cross examination of the husband by the wife’s counsel.
(f)It is not clear to me why the husband was able to produce bank statements for the NAB savings account, and not any statements for the MasterCard accounts.
(g)With reference to the NAB savings account statements that were produced, I am prepared to accept that the husband has two MasterCard liabilities in circumstances where a perusal of those statements reveals electronic transfer withdrawals from that account were made towards the payment of a “Store 1 Mastercard” and towards a “Low Rate Mastercard”.[14]
(h)However in circumstances where it is not clear to me what the current balances of those accounts are, nor what amounts were owing at the time of physical separation, nor how those liabilities were accrued, I do not consider that I am in a position to include those liabilities.
[14] Exhibits “W6”, “W7”, “W8”, “W9”, “W10”
In relation to the child support liability:
(a)This liability was raised by the wife in her affidavit filed 15 May 2021, where she deposed:
“114. I currently owe a debt to the Child Support Agency in the total sum of $7,443.42 by way of child support arrears.
…
129. I currently pay a sum of $51.28 in Child Support each fortnight.
130. Since April 2017 I have paid a total amount of $7,608.52 in Child Support payments, and an additional sum of $5,024.19 in extra agency payments that were made to X directly.
131. As at 16 April 2021 the Child Support Agency have erroneously assessed me as owing a total sum of $7,443.42 in Child Support arrears.”
(b)The wife’s oral evidence about child support, and in particular regarding the alleged “erroneous” liability was to some degree confused. Ultimately however it became apparent that the wife considered that the “extra agency payments” were a figure calculated by the wife to bring to account amounts she asserted that she had expended on activities with X together with expenses paid to her benefit, including buying her items of clothing and “healthy foods.”
(c)So far as the child support liability is concerned, I accept that there is a present liability owing to the husband in the amount of $7,443.42.
(d)However, I was not presented with any evidence as to steps being undertaken by the wife to challenge this liability, nor any evidence from the husband as to what, if anything might be done through the agency to recover the liability.
(e)In addition, neither party had an application before the court to deal with the topic of child support.
(f)In all of those circumstances, I consider that the Child Support Agency is the appropriate forum for the husband to pursue recovery of this debt from the wife. I accordingly do not propose to account for the same.
(g)Having said that, I consider this topic is a relevant topic to consider when I turn to section 75(2).
The parties superannuation entitlements
There was agreement between the parties that the wife holds superannuation entitlements with Super Fund O. In relation to those entitlements:
(a)The wife asserted that the current balance of her Super Fund O entitlements is an amount of $17,102.28.
(b)The husband asserted that the current balance of the wife’s Super Fund O entitlements is an estimated amount of $12,341.00.
(c)While I have not seen a statement for the wife’s superannuation entitlements with Super Fund O, I propose to accept the amount deposed to by the wife in her Financial Statement filed 12 May 2021, being an amount of $17,390.00.
(d)I otherwise have no evidence as to the nature, form and characteristics of the wife’s Super Fund O entitlements, beyond her identification in her Financial Statement that it is accumulation interest.
The husband also asserted in his case outline that the wife had “ATO Held Super” in the amount of $2,049.00. I did not however hear any evidence about this topic during the trial. Significantly, the wife did not depose to holding any superannuation entitlements beyond her Super Fund O entitlements. In addition, she was not challenged about her evidence. In all of the circumstances, I am not satisfied that this superannuation entitlement exists. I accordingly do no propose to include this item.
So far as the husband’s superannuation entitlements are concerned, the husband annexed to his affidavit filed 11 May 2021 a copy of a print out from the Australian Taxation Office in relation to his superannuation entitlements which recorded that:
(a)He presently does not hold any superannuation entitlements.
(b)That he previously held superannuation entitlements with three separate funds, however each was closed; Super Fund P on 21 November 2019, Super Fund Q on 21 October 2019, and Super Fund R on 14 November 2019.
I note that the husband had earlier deposed to holding Super Fund P superannuation entitlements in the amount of $3,000.00.[15]
[15] Affidavit of the husband filed 16 December 2019, paragraph 83.
The husband did not provide the court with any documentary evidence as to what he had previously held by way of superannuation entitlements, and nor what he had done with the funds that he had previously held with each fund when the accounts were closed.
The wife annexed to her affidavit filed 12 May 2021 a statement for the husband’s Super Fund Q superannuation entitlements, which showed that the husband’s entitlements on 30 June 2017 were $22,660.38, and on 7 February 2018 they were $13,070.95, as a consequence of a $10,000.00 withdrawal.[16]
[16] Annexure “-10” to the Affidavit of the wife filed 15 May 2021.
During cross examination of the husband it became apparent that:
(a)The husband had made applications to withdraw amounts from his various superannuation entitlements which had been approved under hardship provisions.
(b)With reference to the NAB savings account statements earlier referred to, it became evident that the husband had received the following amounts from his superannuation entitlements:
(i)$3,779.15 from Super Fund S on 15 June 2017;[17]
(ii)$7,800.00 from Super Fund Q on 2 August 2017;[18] and
(iii)$4,025.48 from Super Fund P on 22 November 2019.[19]
[17] Exhibit “W7”
[18] Exhibit “W8”
[19] Exhibit “W9”
The husband asserted that the funds he had withdrawn were applied to both his and X’s living expenses, including buying home furniture after the wife vacated the home, paying various utilities and outgoings for the Suburb K property. This is evidence that I am prepared to accept, with reference to the NAB savings account statements that were produced by the husband during the trial. From those statements it appears to me that the husband lived frugally and effectively week to week.
The Approach that the parties invited the court to take
The parties agreed that the N Street, Town M property owned by the wife and purchased with the funds that she received by way of inheritance, be treated as a financial resource.
While it is open to me to include this item of property in the property of the parties to be divided, in light of the mutual approach that the parties have invited the court to take, I propose to treat this item of property as requested by them. Accordingly I shall exclude this item from the property to be divided and rather treat it as a financial resource available to the wife when I come to consider s75(2)(b) hereunder.
The parties otherwise did not agree how the court should treat the wife’s superannuation entitlements.
The position of the husband was that the court adopt a “single pool” and include the wife’s superannuation entitlements in the property of the parties that is to be divided.
The position of the wife is that in circumstances where the husband has drawn down and expended all of his superannuation entitlements, largely in the post separation period, the wife’s superannuation entitlements should equally be treated to the exclusion of the husband, and not brought to account in the property of the parties to be divided.
While I accept that either option is available to the court, in circumstances where I am satisfied that the funds utilised by the husband from his superannuation entitlements were applied to both his and X’s living expenses, I do not consider that he has acted inappropriately in that regard.
My view is amplified in that regard when I consider the NAB savings account statements produced by the husband to which I have already referred which shows that aside from two child support payments, one of $2,336.39 on 9 November 2017, and a further on 16 January 2018 in the amount of $575.33, it appears that over the period of time for which statements have been produced, the husband was either not receiving any child support payments from the wife, and when he was, those payments were of a nominal amount. I am also conscious that there are significant child support arrears owed by the wife.
It is not lost on me that the wife’s superannuation entitlements were accrued during the relationship, as were at least a significant portion of the husbands, given he continued to be in paid employment for the majority of the parties relationship.
In all of those circumstances, I consider it appropriate to include the wife’s superannuation in the property to be divided, understanding that neither party has sought a superannuation splitting order, and that I otherwise do not know any details about the nature, form and characteristics of the wife’s superannuation entitlements.
The “pool” of property to be divided
For all of the reasons that I have enunciated, I find the property of the parties to be as follows:
Asset
Ownership
Value
Net proceeds from sale of Suburb K property
Joint
203,690.07
Interim distribution of proceeds of Suburb K property
Husband
30,000.00
Interim distribution of proceeds of Suburb K property
Wife
30,000.00
Motor Vehicle 1
Wife
3,000
Super Fund O
Wife
17,390
TOTAL ASSETS
284,080.07
Liability
Company L liability
Husband
(11,000)
The net assets of the parties are therefore $273,080.07.
THE POSITION PROMOTED BY EACH OF THE PARTIES
While I accept that the parties applied different approaches to the composition of the property to be divided between them as already discussed, the parties also each promoted very different positions as to how their property was to be divided.
The position of the husband was that there be a 65% division in his favour on the basis that:
(a)That there should be no adjustment between the parties at the contribution stage of analysis on the basis that the court consider that the parties’ contributions be treated as equal.
(b)That there should be a 15% adjustment in favour of the husband when considering the relevant factors pursuant to section 75(2).
The position of the wife was that the only asset that the court adjust was the proceeds from the sale of the former matrimonial home on the basis that the same be divided on a 75/25 basis in the wife’s favour. In that regard I comment:
(a)The wife’s counsel struggled to enunciate why this outcome was appropriate with reference to an analysis of contributions and section 75(2) factors, but ultimately indicated that the position was promoted on the basis that contributions be assessed at 65/35 in favour of the wife, and that there be a further adjustment in the wife’s favour on account of section 75(2) factors, and in particular the husband’s “non-disclosure” regarding his financial dealings, particularly in the post separation period.
(b)The wife’s counsel advanced that there be no adjustment at the section 75(2) stage of analysis to deal with the N Street, Town M property that the wife now holds freehold.
(c)The wife’s counsel indicated that the position promoted on behalf of the wife was in accordance with his instructions.
THE CONTRIBUTIONS OF THE PARTIES
The initial financial contributions of the wife towards the acquisition of the Suburb K property were not the subject of any significant controversy. As I indicated earlier in these reasons, I accept that the wife contributed $40,516.00 to the acquisition of the property.
I also accept the evidence of the financial arrangement between the parties while they lived together was that the wife was responsible for the payment of the mortgage for the Suburb K property and that the husband was largely responsible for the balance of the parties’ expenses, including the day to day living expenses and other outgoings for the property.
The wife during her oral evidence stated that she was not only responsible for the payment of the mortgage but also the balance of the parties’ expenses such as living expenses and other outgoings. The wife’s position was that the husband did not financially contribute at all to the Suburb K property or the living expenses of the family.
Counsel for the husband examined the wife about this assertion.
The wife gave evidence that at those times when she was not in receipt of an income she lived off both her savings and Family Tax Benefit monies she received from Centrelink of approximately $130.00 to 140.00 per week.
The wife asserted that her income form Centrelink was applied to the mortgage repayment of the Suburb K property as well as the outgoings in relation to the former matrimonial home property and the parties living expenses. The wife’s evidence was that the mortgage repayment was no less than $320.00 per fortnight.
I am satisfied as a result of the wife’s evidence that it was financially impossible for the wife to have met the mortgage repayments together with additional expenses and outgoings. I am satisfied of this in circumstances where the wife did not produce any evidence as to her savings (beyond the lump sum WorkCover payments she received) and where her Centrelink benefit would not have been enough to cover the mortgage repayment.
I am however satisfied that the wife may well have had some capacity to make financial contributions to the outgoings of the Suburb K property and to other daily expenses, including food, at those times when she received each of the various lump sum WorkCover payments.
I equally have not lost sight of the fact that after the wife vacated the Suburb K property, the husband was unable to keep up with the payment of various outgoings for the property, and that the same was ultimately paid from the net proceeds of sale when the property sold.
From the evidence that I have previously summarised, it appears that:
(a)The husband was employed and earning an income from the date of cohabitation in early 2004, until he settled his WorkCover claim in 2015.
(b)During the relationship the wife had three relatively short periods of paid employment and that she otherwise received three not insubstantial WorkCover payments to cover lost income from the date that she stopped working with each employer until the settlement of each of her WorkCover claims.
I find that while the parties did not combine their finances, they each otherwise applied their incomes to their mutual benefit and to that of the household.
I am also satisfied that the parties each made significant non-financial contributions, in particular:
(a)The wife appears to have home schooled X during the period of cohabitation; and
(b)The husband appears to have shouldered the majority of the parenting responsibilities for X in the period post the parties’ physical separation.
I am also mindful that the parties have each made serious allegations of family violence, but in circumstances where neither of them seek any adjustment in relation to these factors, the effects of the family violence on each of them is not something that I have taken into account.
I am however satisfied that the wife suffered periods of mental ill health and that as a consequence, the husband’s non-financial contributions as parent and homemaker necessarily would have increased to fill the void created by the wife’s difficulties.
The approach promoted by the wife appears to be that her initial financial contributions to the contribution of the Suburb K property are such that the court should make an adjustment in her favour when weighed against the balance of the contributions made by the parties.
As identified by the Full Court in Jabour & Jabour [2019] FamCAFC 78, such an approach is erroneous. Rather the correct approach and that which I shall adopt, is to weigh all of the parties contributions, including the wife’s initial contribution of funds as “one of the myriad of contributions made”.[20]
[20] Jabour & Jabour [2019] FamCAFC 78 at [73]
On balance, and when considering the totality of the parties contributions, it is my view that while different, the parties contributions to the acquisition, conservation and improvement of property should be regarded as being equal.
RELEVANT SECTION 75(2) FACTORS
I now turn to those relevant future needs factors set out in section 75(2) of the Act.
The parties’ relationship is of significant duration, their cohabitation subsisting for a period of approximately thirteen years.
Understanding that both of the parties have been the recipients of WorkCover claims and that they each have been out of paid employment for a significant period of time now, I consider it readily foreseeable that both parties are unlikely to be in paid employment in the future and that they will each be largely reliant on government benefits of some sort.
I consider that this conclusion is also open to me when I take into account:
(a)That the husband is now 60 years of age and that the wife is 53 years of age;
(b)That since at least October 2017 until the present, the wife has been in receipt of Centrelink benefits as she has been considered unfit for “work or study” as a result of her mental health difficulties, including but not limited to anxiety and depression, insomnia, lack of motivation and poor concentration.[21]
(c)The unchallenged evidence of the husband that he was diagnosed with Type 2 diabetes in 2018, suffers from kidney disease, and suffered a heart attack in 2009 and three months later a minor stroke.[22]
(d)The husband’s unchallenged assertions that his ability to find employment is also impacted by his parenting responsibilities for X, which are complicated by the issues relating to her poor school attendance and the husband’s need to personally transport her to and from school.[23]
[21] Exhibit “W3”
[22] Affidavit of the husband filed 11 May 2021, paragraph 66.
[23] Affidavit of the husband filed 11 May 2021, paragraph 68 – 69.
I am conscious that X presently lives with the husband and that I have identified earlier in these reasons that she appears to spend very little time with the mother.
For the reasons identified earlier in these reasons, I also accept that X has significant needs.
As I discussed earlier in these reasons the topic of child support is one that requires further consideration, and in that regard:
(a)That there are significant child support arrears owed by the wife to the husband, and the wife’s assertions that the same were “erroneously” assessed, would suggest that I would have to have reservations that those arrears will ever likely be paid by the wife.
(b)The wife is otherwise paying a nominal rate of child support, noting that for the period 1 October 2020 to 31 December 2021, the wife was assessed to pay child support in the amount of $36.92 per month.[24] On any view this is not an amount that could possibly cover X’s day to day needs.
[24] Exhibit “H2”
As a consequence, I am satisfied that the husband will shoulder the responsibility of meeting X’s financial needs at least until she turns 18 years of age.
I am also mindful that as a consequence of the sale of the Suburb K property, there is now a significant disparity between the parties living arrangements, and in particular the wife resides in a freehold property at N Street, Town M that she owns, whereas the husband is now renting a home for himself and X to reside in.
Added to this, is that because of the approach that the parties invited the court to take to the composition of the property to be divided between them, I can not ignore that the property at N Street, Town M has a value of $252,000.00, a sum almost equivalent to the net assets of the parties falling for division. On any view this is a very significant factor which must be brought to account.
For all of the reasons that I have identified, I consider it appropriate that there be an adjustment in favour of the husband on account of section 75(2) factors in the amount of 15%, resulting in a 65/35 division in favour of the husband.
When I consider the effect of such an adjustment as set out below I consider such an adjustment is just and equitable in all of the circumstances.
CONCLUSION
As I set out earlier, the net assets of the parties total $273,080.07.
The husband holds net assets of $19,000.00, taking into account the partial property settlement of $30,000.00 and his Company L liability of $11,000.00.
The wife holds net assets of $50,390.00, taking into account her partial property settlement of $30,000.00, her car of $3,000.00 and her superannuation entitlements of $17,390.00.
In addition, the wife owns the N Street, Town M property with a value of $252,000.00, which was purchased using the inheritance she received in the amount of $142,000.00 in 2016.
A 65% adjustment in the husband’s favour would see him retaining assets in his possession with a value of $177,502.00. Understanding that the husband has net assets in his possession of $19,000.00, this would mean that the husband would receive the sum of $158,502.00 from the net proceeds of sale from the Suburb K property.
From the wife’s perspective a 35% adjustment in her favour would require the wife to retain assets totalling $95,578.00.
Understanding that the wife has assets in her possession of $50,390.00, this would see the wife receiving $45,188.00 from the proceeds of sale from the Suburb K property.
A 65/35% division in favour of the husband would result in a differential between the parties of $81,924.00 in favour of the husband.
However, when I add the value of the N Street, Town M property to that which the wife is retaining, the wife is retaining assets totalling $347,578.00, while the value of assets to be retained by the husband will remain at $177,502.00. This would put the differential between the parties at $170,076.00 in the wife’s favour.
For all of the reasons that I have discussed, I therefore make those orders set out at the commencement of these reasons.
I certify that the preceding one hundred and twenty-two (122) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Kari. Associate:
Dated: 19 August 2021
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