Fitzpatrick and Griffin
[2008] FMCAfam 555
•27 August 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FITZPATRICK & GRIFFIN | [2008] FMCAfam 555 |
| FAMILY LAW – Property – binding financial agreement – failure to receive independent legal advice. |
| Family Law Act 1975, Part VIII, ss.75 (2), (2)(g), (k), (o), 79 (2), (4), 85A, 90G, 90G (1)(b) & (c) |
| AJO v GRO (2005) FLC ¶93-218 Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies (Fourth Edition) (R.P. Meagher, J. D. Heydon, M.J. Leeming) (Sydney: LexisNexis, 2002) |
| Applicant: | MR FITZPATRICK |
| Respondent: | MS GRIFFIN |
| File Number: | CAC 620 of 2007 |
| Judgment of: | Neville FM |
| Hearing dates: | 8 & 9 May 2008 |
| Date of Last Submission: | 9 May 2008 |
| Delivered at: | Canberra |
| Delivered on: | 27 August 2008 |
REPRESENTATION
| Counsel for the Applicant: | Ms Godtschalk |
| Solicitors for the Applicant: | Rachel Bird & Co |
| Counsel for the Respondent: | Mr Kearney |
| Solicitors for the Respondent: | Anne Marie Proctor and Associates |
ORDERS
The Husband be entitled, to the exclusion of the Wife, to the following property:-
(a)Superannuation entitlements in his name including those with the PSS and AGEST;
(b)All motor vehicles in his name, in particular motor vehicle ACT registration [omitted]; and
(c)His personal wine collection.
The Wife be entitled, to the exclusion of the Husband, to the following:-
(a)Superannuation entitlements in her name including those with the Australian Retirement Fund; and
(b)All motor vehicles in her name, in particular motor vehicle registration [omitted].
The Wife shall do all things and sign all documents necessary to transfer all of her right, title, and interest in the property known as Property [B] in the Australian Capital Territory to the Husband.
The Husband shall, within 60 days of these Orders, pay to the Wife the sum of $64,400.
In the event that the sum pursuant to Order 4 is not paid within 60 days, the [B] Property is to be sold and the net proceeds divided so that the Wife receives $64,400.
The Wife retain the monies advanced to her by the Husband in the sum of $5,450.
The Wife return to the Husband the personal items belonging to the Husband as set out in his affidavit of 3 March 2008 at paragraph 29.
Each party pay their own costs.
NOTATION:
The parties note that this order, and payments made as a result, will be affected by the Superannuation Legislation Amendment (Family Law) Act 2004 which came into effect on 18 May 2004 and the Family Law (Superannuation) Regulations which together provide for a separate superannuation interest to be created for the non member spouse and for consequential effects on payments.
IT IS NOTED that publication of this judgment under the pseudonym Fitzpatrick & Griffin is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT CANBERRA |
CAC 620 of 2007
| MR FITZPATRICK |
Applicant
And
| MS GRIFFIN |
Respondent
REASONS FOR JUDGMENT
Introduction
In her closing submissions, with characteristic [and significant] understatement, Counsel for the applicant husband, Ms Godtschalk, described a central characteristic or feature of the relationship between Mr Fitzpatrick and his former wife, Ms Griffin, this way:
… this case … is a somewhat unusual one in that the parties conducted their marriage in an unusual fashion with regards to their financial dealings.[1]
I am sure it is no coincidence that Counsel used the word “unusual” deliberately, and that she did so twice within a very short space of time. Other adjectives would be no less apt.
[1] Transcript (9th May 2008) p.118.
In any event, I agree with Ms Godtschalk’s brief characterisation. There were other features of the relationship, of course, but what
Mr Fitzpatrick’s Counsel described portrays the predominant and distinctive quality of it, and which was, to a significant degree, a focal point in the course of the trial.
By any measure, the relationship between and subsequent marriage of the parties was somewhat short: approximately 6½ years. The parties met in 1999, they married in March 2002 (having co-habited since either late 1999 or early the following year) and separated (under the one roof) in 2006.[2]
[2] In his affidavit filed on 10th April 2008, Mr Fitzpatrick helpfully records the following (par.3): “Paragraph 2 of [Ms Griffin]’s affidavit of 27 March 2008 states that we had lived together for about 2.5 years before our marriage on 31 May 2002. I say the period of cohabitation was 2 years, 4 months and 30 days. I say the total period of cohabitation and marriage was 6 years, 9 months and 10 days, with the marriage duration being 4 years, 4 months and 11 days within that period.”
Mr Fitzpatrick is aged 54, and Ms Griffin is 55. He is a public servant who works in the Commonwealth Department of [omitted]. He is currently at a salary level of “Executive Level 2”, which provides him with an average weekly income of $2354.00, which translates to approximately $120,000 per annum. She works as an executive assistant, and earns $54,000 per annum. There are no children of the relationship.
I also agree with the following comment from Mr Kearney’s closing submission (Mr Kearney is Counsel for Ms Griffin):
… this is … a case involving an orthodox application of the discretion [re]posed in the Court pursuant to s.79 … and to approach it in any other way … is something that would result in a fundamental error….[3]
[3] Transcript (9th May 2008) p.124.
Having said that, for the sake of completeness there are a few matters that I will need to address summarily or en passant, such as the relevance, weight or otherwise of various agreements that the parties purported to enter at various times of their relationship. It is to those matters that I will immediately turn before taking what Mr Kearney described as the `orthodox road’ of the famous four steps, described in Hickey and AJO v GRO, among many other cases.[4] But before all else, it will be helpful to set out the orders sought by each of the parties.
[4] In the Marriage of Hickey (2003) 30 Fam LR 355 at p.370 [39]; AJO v GRO (2005) FLC ¶93-218 at p.79,619.
A. Orders Sought
Stated summarily, the applicant Mr Fitzpatrick, seeks that each party keep their superannuation entitlements and their respective cars. He also seeks that he keep his wine collection in toto. As well, he seeks an order whereby Ms Griffin transfers all of her `right, title and interest’ in what is called `the [B] property’ (the former matrimonial home) and that Mr Fitzpatrick will, within 30 days of that transfer, pay her $30,405.00. Otherwise, he seeks orders to the effect that certain personal items of his (set out in par.29 of his affidavit of 3rd March 2008) be returned, and that Ms Griffin be entitled to retain (or presumably not be required to repay) a sum of $5450.00 advanced to her by Mr Fitzpatrick.[5]
[5] In her closing submissions, Ms Godtschalk contended that the Court should use the [alleged] pre-nuptial agreements and make orders having regard to them pursuant to s.85A of the Act. Transcript (9th May 2008) p.122. The “Minutes of Orders Sought by Applicant”, filed on 6th May 2008 contain no reference to s.85A. Mr Kearney opposed such a course, among other things, saying that “Section 85A falls and doesn’t even arise on anything that has been said in this case for contemplation. Firstly, no order of relief is sought pursuant to it.” Transcript (9th May 2008) p.126. I agree with Mr Kearney. I see no need to have regard to s.85A in these proceedings.
The orders sought by Ms Griffin are rather more extensive. Among other things, they are that Mr Fitzpatrick pay her $267,000 within 28 days of the orders made by the Court, or in the event that that sum is not paid, and the [B] property is sold, half of the proceeds of sale. She also seeks orders – again summarily stated – that would provide her with half of Mr Fitzpatrick’s wine collection as well as half of his superannuation entitlements. She also seeks an order for costs. Curiously, perhaps, Mr Fitzpatrick did not seek a corresponding order.
B. Marital Agreements?
Among other documents attached to Mr Fitzpatrick’s affidavit, sworn 3rd March 2008, are two agreements. The first is styled “Pre-nuptial Agreement” and dated 6 March 2002; the second is headed “Amendment to Pre-Nuptial Agreement” and dated 2 June 2006.
Both documents were prepared by a local firm of solicitors who practised under the name of “Diana Burns Solicitors.” It appears to have been a husband and wife firm.
In the course of submissions, and at other times, it was conceded by
Ms Godtschalk, and understandably pressed by Mr Kearney, that the two agreements did not comply with the strict requirements of Part VIIIA of the Family Law Act1975 (“the Act”).[6]
[6] Among other places, see Transcript (9th May 2008) p.78, where Ms Godtschalk said: “My concession is a legal concession, that the document is not a binding financial agreement under the Family Law Act because it does not comply with section 90G. It does not have the required annexure.” She further conceded [recorded in the same reference in the Transcript] that even though the second, later document did have the required annexure, because the two documents were mutually dependent, the flaw in the first document irreparably infected the second agreement. The description of “infection” was not used by Counsel.
At the outset of the hearing, and at various stages during it, relying particularly on the recent Full Court decision in B & B,[7] and the much older but venerable authority of Isaacs J’s judgment in Watkins v Combes,[8] Mr Kearney urged the Court to ignore the flawed agreements in their entirety. For her part, Ms Godtschalk submitted that the Court was entitled, among other things on the Full Court authority of Woodcock v Woodcock,[9] at least to have regard to the fact that the parties lived their lives essentially in accordance with what was proposed and recorded in those agreements.
[7] B & B (2008) 38 Fam LR 503; (2008) FLC ¶93-357.
[8] (1922) 30 CLR 180 at 197.
[9] (1997) FLC ¶92-739.
As a matter of law, I agree with Mr Kearney. And should it need to be said, I am bound by the authorities of B & B and the High Court in Watkins v Combes. Once flawed, the agreements fall by the wayside, even if the evidence more generally in relation to the “agreements” was, or may be, of benefit to his client. But that does not, in my view, completely or satisfactorily deal with the issues in play here. At the very least, the circumstances in which the agreements came into existence provide useful context for the larger discussion.
For example, in evidence, Mr Fitzpatrick confirmed that he was the person who (a) initiated the agreements, (b) instructed the solicitors – both at the outset as well as during the course of the drafting and re-drafting of the documents – and (c) that he was the one who paid the account for the preparation of them, as well as for the preparation of the parties’ wills.[10]
[10] Transcript (8th May 2008) pp.60-61.
At least two issues arise out of the course of conduct surrounding (both before and after) the preparation of the documents. First, there is the admitted requirement – statutory and otherwise - for there to be independent legal advice provided to both parties.[11] There are a number of matters to consider here.
[11] Statutorily, see s.90G(1)(b) & (c).
For example, admittedly not in the context of family law proceedings, in Powell v Powell, Farwell J said: [12]
… the donee [of a gift] does not discharge this burden by shewing that his own solicitor acted for both parties. A solicitor who accepts such a post puts himself in a false position; if he acts for both, he owes a duty to both, to do the best he can for both. But the Court requires that the donor should be placed in as good a position as if her were in fact emancipated. The solicitor, therefore, must be independent of the donee in fact, and not merely in name, and this he cannot be if he is a solicitor for both.
[12] [1900] 1 Ch 243 at pp.246-247.
In the seminal High Court decision of Yerkey v Jones, Dixon J distinguished between two types of cases: the first involved undue influence; the second involved situations where there was no or insufficient independent advice given to the party at risk of being misled, overborne or otherwise susceptible of not sufficiently comprehending the import and likely consequences of signing the document presented to them for signature. In relation to the second category of case, his Honour noted the importance of receiving advice from a “stranger” who, on reasonable grounds, would be believed to be “competent, independent and disinterested.”[13] The requirements of s.90G of the Act clearly seek to mirror, to a significant degree at least, what Dixon J said in Yerkey v Jones.
[13] (1940) 63 CLR 649 at pp.685-686. See also his Honour’s multi-textured reference [at p.675] to “… equitable presumptions of an invalidating tendency.”
Comments similar to those of Dixon J were made by Street J in Bester v Perpetual Trustee Co Ltd.[14] And it should be recalled that Dixon J’s observations were endorsed in the joint judgment of Gaudron, McHugh, Gummow and Hayne JJ in Garcia v National Australia Bank Ltd. The High Court stressed the importance of the need for advice to be “competent, independent and [from a] disinterested stranger.”[15]
[14] (1970) 3 NSWR 30 at p.35.
[15] Garcia v National Australia Bank Ltd (1998) 194 CLR 395 at p.409. The joint judgment could properly be seen as a studied reflection and endorsement of Dixon J’s judgment in Yerkey v Jones. See also the Court’s approval [at pp.404 & 405] of the importance of ensuring that there is `adequate and accurate explanation’ of the document/transaction about to be undertaken, and that there be “proper information about the purport and effect of the transaction.” Callinan J’s judgment [at pp.436-443] is to similar effect. For a comprehensive historical (and other) analysis, see for example, Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies (Fourth Edition) (R. Meagher, J. D. Heydon, M. Leeming) (Sydney: LexisNexis, 2002) Chapter 15 “Undue Influence.”
On the basis of the significant authorities just mentioned, and in the light of the relatively simple facts of the case whereby it is acknowledged that the same firm of solicitors acted for both parties to the purported agreements, there can be no question that there was little that resembled “independent advice.” As well, the somewhat limited evidence of Ms Griffin regarding the circumstances in which the documents – especially the 2006 document – were signed, may also question the quality or competence of the advice.[16] Apart from something of an aside, I need not deal with this matter. The “aside” relates to this factual curiosity: it seemed almost to be common ground that the relationship was beginning to falter from about 2004. In part because of the concession by Ms Godtschalk regarding the financial agreements, in the light of the facts of this matter and the authorities of Powell, Yerkey v Jones, Bester, and Garcia v National Australia Bank, in other circumstances the Court would very likely be required to consider any possible legal implications of entering such an agreement. How and why someone [Mr Fitzpatrick] would require, and how and why someone else [Ms Griffin] would agree to enter, a qualifying financial agreement that could only add extra pressure to an already fragile relationship is, to say the least, surprising, if not troubling.[17] But as I have said and for reasons already given, I can leave that aspect alone.[18]
[16] It was accepted by Counsel for both sides that the principals of the firm of solicitors who acted for the parties in relation to the documents in question have retired and that the firm itself no longer exists. See Transcript (9th May 2008) p.112. I should also note that, having regard to the concession by Ms Godtschalk about the “agreements”, and in the light of the judicial authorities noted, it is unnecessary to consider any statutory provisions, or professional regulatory guidelines, concerning lawyers acting for two parties in the same matter.
[17] Generally, see the recent discussion in P. Staindl & L. Bradley, “Financial agreements: Risks, responsibilities and rewards,” (2008) 13 Current Family Law 64.
[18] It is also unnecessary to comment on, or in relation to, the facts of this case, let alone explore, the innate risks in binding financial agreements. By this I simply mean to refer to the inherently, or at least potentially, corrosive effect a financial agreement may have on a relationship. While the protection of an individual’s assets is understandable, that principle, with its emphasis on the material, could be seen to be mutually exclusive to the other principle (with its emphasis on the relational) regarding life-long, unconditional commitment in marriage recognised under the Act (cf. s.43(a) Family Law Act). To put it another way, the Act recognises two fundamental principles that are, logically, mutually exclusive: (a) mutuality, life-long commitment and shared responsibility [presumably that also includes sharing of financial resources] versus (b) individuality and financial protectionism. Stated more colloquially, there is an inevitable tension between, on the one hand, that all aspects of marital life are entered into [unconditionally] for life, which includes mutual support and the sharing of life in all its intimacies, but on the other hand, finances and other material assets are to be quarantined for the benefit of one party alone. Mr Fitzpatrick’s assets were substantial when entering the relationship with Ms Griffin; her assets were very modest. It is not apt to speculate on what impact, if any, the financial agreements had on the ultimate stability and security of their relationship.
The second issue that arises from the [acknowledged non-binding financial] documents and the circumstances of their construction relates to their relevance and weight (if any) in pursuing the `orthodox road’ (previously referred to), which comprises the “four steps” - to which I now turn. In my view, the circumstances in which the documents were prepared are generally relevant in the Court’s consideration of [at least] s.75(2)(o). I will come to that in good time.
C. The Assets and Liabilities of the Parties
At the conclusion of the trial, it was agreed that the value of the former matrimonial home, known as “the [B] property,” was $560,000.[19] Otherwise, the principal assets of the parties may be tabulated as follows:[20]
[19] Transcript (9th May 2008) p.133.
[20] The figures are from Mr Fitzpatrick’s documents; any figures in parentheses are the values claimed by Ms Griffin in relation to the relevant entry.
Asset Husband Wife
Car 6700 (12,600) 4500
Super (AGEST) 74,521 Nil
Super (PSS) 799,207 Nil
Super (Aust Super) Nil 76,435
Wine Collection $130,000 (E) (180,000) Nil
Both parties provided estimates of the value of the contents of their respective abodes, $30,000 in the case of Mr Fitzpatrick, and $11,400 in the case of Ms Griffin. Unsurprisingly, some of the estimates were questioned in cross-examination. Various amounts were claimed in relation to legal fees incurred to date, including Ms Griffin taking out a personal loan of $25,000 to deal with legal and other expenses. There were also modest bank balances deposed to by both parties, and a not insignificant Visa/Mastercard debt owing by Mr Fitzpatrick. In the light of the evidence given in the trial regarding his scrupulous attention to finance, I confess to some surprise at a debt of this kind and for this amount. Mr Fitzpatrick also claims that he has incurred a superannuation surcharge of $2540.00. I propose taking out of the pool the claims by both parties in relation to their furnishings/house contents, and as I note below, I will do the same in relation to “legal fees.”
It will be readily apparent that the principal assets of the relationship, speaking generally, comprise the former matrimonial home, the superannuation, and the wine collection. According to Mr Kearney the combined superannuation pool totals $950,163.00, and the total net pool of assets (including superannuation) is $1,773,674.[21] There is, in my view, little to quibble with the mathematics of Mr Kearney. For the purposes of these reasons and the orders, my focus will be on the real estate, the superannuation and the wine collection: what might be called more colloquially, “the big ticket items.” Although they will be considered further but summarily in the context of “contributions” I will deal with each of them briefly now.
[21] For my part, the discussion about “add-backs” in the course of the trial, essentially relating to legal fees, is best dealt with by excluding them. This was one of two options put to the Court by Mr Kearney in his closing submissions (Transcript [9th May 2008] p.129. A not dissimilar position was put by Ms Godtschalk, although she pressed (not surprisingly) that Ms Griffin’s legal fees and the personal loan she has taken out to pay her costs are post-separation and not from marital assets (Transcript [9th May 2008] p.117.
The Real Estate: The parties have both been previously married.
Mr Fitzpatrick’s first wife died in 1999. Ms Griffin has two non-dependant children from an earlier relationship. At the time he met
Ms Griffin he lived in a property in the Canberra suburb of [K]. In 2001, that property was sold and, following Ms Griffin’s searching for a suitable alternative for the relatively newly established couple, the unit/townhouse at nearby [B] was purchased.
The [K] property was sold for $264,000 in early 2002. It was owned by Mr Fitzpatrick. The [B] property was purchased jointly by the parties in March 2002 for $420,000. It was financed by a joint loan of $180,000, the balance coming from Mr Fitzpatrick’s sale of the [K] property. In large measure, and subject to what is said further below, I agree with Ms Godtschalk’s submission that the husband’s substantial initial contribution to the purchase of the matrimonial home was of the kind referred to by the Full Court in Pierce v Pierce.[22]
[22] (1999) FLC ¶92-844.
In cross-examination, Mr Fitzpatrick acknowledged that Ms Griffin contributed financially `to the property’ by paying “half the mortgage repayments, half the rates and half the body corporate fees.”[23]
[23] Transcript (8th May 2008) p.46. He qualified the financial contributions more generally of both parties a little later in his cross-examination saying that “… during that time [between 2002 and 2005], during the entire period of our cohabitation and the relationship financially I paid for virtually all the food and groceries that we ate. I paid for all the alcohol that we drank.” And later still, he confirmed the practice in relation to credit card debt whereby he would go through the monthly statement, highlight the items considered to be personal to Ms Griffin, and ask or require her to ensure that payment of those items was achieved by the due date. He deposed that this practice was established very early on in the relationship. See Transcript (8th May 2008) pp.46-48. Not surprisingly, Ms Griffin gave evidence that she grew increasingly tired of the financial controls exerted by Mr Fitzpatrick in the course of the relationship. She contended that the “financial agreements” were another example of this control. See Transcript (8th May 2008) pp.69-70, 73-76 & (9th May 2008) p.94. It was not disputed also that Mr Fitzpatrick lent funds to Ms Griffin to repay a HECs debt and to purchase a car. She initially claimed that she repaid Mr Fitzpatrick $800 per month, but later conceded that the figure was in fact $300. Transcript (9th May 2008) pp.89-91. In passing, I note that a number of inaccuracies and lack of evidence was evident in Ms Griffin’s case, of the kind just noted, and which included some “double-dipping” in the figures in her Financial Statement. See Ms Godtschalk’s submissions in this regard: Transcript (9th May 2008) p.108. It would appear that Ms Griffin’s solicitors did not check such items with her or consider, for example, obtaining her bank statements to substantiate a number of matters alleged. Such advice or course of action would have been helpful, to say the least.
The Superannuation: The substantive or actual figures in relation to this item are not seriously, and could not be, disputed. The issue for consideration and determination here is what, if any, is the contribution that either party made to the other’s superannuation. Put shortly, I agree with Ms Godtschalk’s submissions regarding superannuation. She said: “… we have a situation where he [Mr Fitzpatrick] came in with the PSS superannuation at [$]379,000, and this is a case where we say the wife really made no contribution to his superannuation because of the peculiar way in which these parties had their financial affairs.” She continued: “… we say the same in relation to his AGEST, which is salary sacrificed solely by him and it is not as if his income was freed up somehow by something that the wife did as a contribution in the relationship….”[24] Having said that I agree with her submissions, there will be an order as sought by Mr Fitzpatrick in relation to his superannuation entitlements.
[24] Transcript (9th May 2008) p.121.
The Wine Collection: Mr Fitzpatrick’s evidence is that he started collecting wine in 1980.[25] Ms Griffin gave evidence that she sometimes bought wine on Mr Fitzpatrick’s behalf “on a few instances” and that “he paid me back.”[26] Although not confirmed, there is an extremely high probability that Mr Fitzpatrick gave very specific instructions about what wine he wanted purchased. Even though I accept all of the qualifications of Mr Kearney regarding significant question marks about its value – on any measure, significant - in the circumstances,[27] I find it difficult otherwise to resist Ms Godtschalk’s submission relating to the wine collection. She said: “He [Mr Fitzpatrick] has the control and intellectual industry in choosing wines … she [Ms Griffin] made no contribution to it; it should come in to the relationship and should go out as his.”[28] Formally, I accept this submission.
[25] Transcript (8th May 2008) p.39.
[26] Transcript (8th May 2008) p.70.
[27] Transcript (9th May 2008) p.128.
[28] Transcript (9th May 2008) p.121.
There is another aspect, however, in relation to the wine collection that is at least factually relevant to “contributions.” In 2005, the mortgage over the [B] property was discharged. This was achieved pursuant to Mr Fitzpatrick selling part of his wine collection. It will be recalled that its value has been placed at between $130,000 and $180,000.
In his affidavit of 3rd March 2008 (par.18), Mr Fitzpatrick deposed to selling some of his wine through the Ultimo Wine Centre, with the sale taking place on 19th March 2005. The discharge figure was $149,992.96. While there were significant and valid questions posed regarding the value of Mr Fitzpatrick’s wine collection (past and present), there was no challenge to the amount of the discharge of the mortgage, or to the proceeds used in the discharge coming from the sale of [part of] the wine collection. I turn now to the more formal consideration of “contributions.” The wine collection should remain intact, with Mr Fitzpatrick.
Contributions
From what has been said already, it will be readily apparent that
Mr Fitzpatrick brought to the relationship a significant pool of assets in real estate, superannuation and the wine collection. His significant income also enabled him to provide what were in effect, or in large measure, loans to Ms Griffin, for example, in relation to discharging her HECS debt and enabling her to purchase a car that had been leased. He also provided funds, also to be repaid, to enable Ms Griffin to travel to Egypt for a holiday and to undertake some dental work.[29]
[29] See Transcript (8th May 2008) p.83.
It is also clear that he provided, at least until 2004, shared credit card facilities with Ms Griffin, albeit that it was virtually conditional on immediate payment [that is, at the end of each month or statement period] of any personal items incurred by her.
The largely uncontested evidence is that the couple often ate takeaway food, and some slightly questioned evidence that there was a degree of, but still essentially basic, sharing of domestic chores. Both matters do not, in my view, require any formal findings and do not, in any event, affect greatly the ultimate result.
There was more testing of evidence regarding what contributions
Ms Griffin brought initially to the relationship. Mr Fitzpatrick contended that she moved to Canberra to be with him, although they did discuss him moving to Adelaide, including Mr Fitzpatrick making inquiries of his Department whether a transfer to Adelaide was possible. He claimed that at the time of Ms Griffin’s move, she was in a very low paid job, had some debts and, by implication, little general prospects. In this light, his summation that the move to Canberra was, in every respect, a “plus” for Ms Griffin is understandable.
For her part, Ms Griffin said that she had significant furniture in Adelaide but that she sold it before moving to Canberra because it was `superfluous to requirements’ given that Mr Fitzpatrick’s house was fully furnished. It did seem, however, that there could be little dispute that she was earning a modest salary. It was more problematic that she was, in my words expressing Mr Fitzpatrick’s evidence, very keen (among other things) to escape her job in Adelaide, which (he said) she hated.
From what has been said, it is patent that Ms Griffin did not bring much at all financially, or in other tangible assets, to the relationship. This is not a criticism of her, but simply a statement of fact. It is also demonstrably true that she did assume joint responsibility for the mortgage of the [B] property, and that for most of the marriage she contributed equally to the mortgage payments as well as to the rates and body corporate fees. And this equal contribution was out of a significantly lesser income than that of Mr Fitzpatrick. In my view, this and the preceding paragraphs are sufficient to deal with the considerations prescribed in s.79(4) of the Act.
Other Considerations
I intend here to consider what is often referred to as “the s.75(2) factors.” It is apt to begin with a qualification made by Mr Fitzpatrick during cross-examination in relation to an alleged promise or statement that he gave or made to Ms Griffin.
It is as well to present the whole of the exchange between Mr Kearney and Mr Fitzpatrick. The following is in the context of and questions concerning Ms Griffin moving to Canberra or Mr Fitzpatrick moving to Adelaide.
FEDERAL MAGISTRATE: There is no suggestion of any pressure or coercion on anyone's part?
MR KEARNEY: No and I make that as clear as I can. The only other way this relationship could have started couldn't it was for you to relocate to Adelaide?---[Mr Fitzpatrick] If we wanted to physically live together yes.
The two of you discussed that option, albeit briefly, and it was decided that wasn't something that the two of you would pursue?---We discussed that option with [name omitted](?) briefly.
Indeed you didn't pursue it because of, and I put it (indistinct) the very dislocation of those existing arrangements on your part that it would have entailed?---That's not correct, I made enquiries at my place of work at the time about the possibilities of relocating to Adelaide.
Yes?---There was nothing obvious but my superior at the time said that if I did want to pursue it he would see what he could do. I had discussions with [Ms Griffin] about it and it was clear that there was a discrepancy in the income between us and that the result of her discussions was I said to her, "Well, if you want to move to Canberra I think that will be better for our circumstances if you are prepared to do it and I made a commitment at that time which I've said in my affidavit if this doesn't work out "I won't leave you destitute." That commitment referred to her initial move to Canberra where we were commencing cohabitation and there was no mention of marriage or anything like that at the time.
Do you mean that that last part of the answer, and I am just paraphrasing, the commitment to not leave her destitute is not one you consider continues to this day?---I'm not leaving her destitute.[30]
A little later in his cross examination, Mr Fitzpatrick commented as follows in answer to further questions from Mr Kearney:
[30] Transcript (8th May 2008) p.45.
In the final March 2002 agreement being executed by you and your wife, might I suggest you said to your wife, "If anything happens to our marriage I would look after you and not let you be destitute"?---No.
You didn't say that?---I made a statement along the lines that I would not leave her destitute in relation to our move to Canberra.
No, let us be very clear about this, listen to the question. I am asking you at or about the time of entry of the agreement in March 2002?---No.
Did you say anything like that?---No.
Not at all?---No.
You knew, I suggest, that your wife was reluctant to enter into that agreement?---Is that a question?
Yes?---I reject that, I didn't know such a thing, she was not reluctant.
You were certainly the one, if I can call it, that was the moving party in relation to the entry of that agreement?---I don't recall who actually suggested it but we had a number of conversations about our entire financial circumstances.
You suggested, I would like to suggest - - -?---I can't confirm or deny that, I honestly can't recall.[31]
[31] Transcript (8th May 2008) p.57. Notwithstanding this exchange, having regard to the totality of the evidence, including his earlier testimony, in my view it is clear that Mr Fitzpatrick was the moving party behind both financial agreements. In the result, little or nothing turns on such a view.
Curiously, in the course of submissions (by both Counsel) little emphasis was placed on this offer/promise of Mr Fitzpatrick not to leave
Ms Griffin destitute – qualified or otherwise. While not seeking to over-exaggerate it, it is nonetheless one among a number of considerations here. As well, it is another indicator of the approach of Mr Fitzpatrick to the relationship, and it should be said too, of Ms Griffin’s acceptance of it. By these remarks I mean only to indicate, as acknowledged in many respects by Ms Godtschalk, that the foundation for the relationship was – to a significant degree – predicated upon acknowledging the financial disparity between the parties, so that the superior position of
Mr Fitzpatrick invariably dictated the outcome. For my part, and again without overly emphasising it, I am not as sure that Mr Fitzpatrick’s qualification about the statement is – or was - as unequivocal as he suggests. Apart from anything else, one might reasonably wonder how [or why] anyone could or would enter a relationship qualified in the way indicated by Mr Fitzpatrick. Indeed, I would be astonished if, when
Mr Fitzpatrick proposed to Ms Griffin that she move to Canberra, she would have done so on the [now] significantly qualified basis that she would not be left destitute, but only in relation to or in the context of the move to Canberra, without any reference to the serious relationship that had already begun.But to return more directly to s.75(2): I have already noted the ages of the parties and their respective employment. Mr Fitzpatrick clearly has the greater income, property and financial resources between the two parties. Fortunately, there are no health issues for them. And neither party has any child dependent on them, nor does either of them have any other person to support.
The only two other matters that conceivably arise on the facts of this case are to consider formally the issues embraced or contemplated by subsections (g) [`a reasonable standard of living in all the circumstances’] and (k) [`the duration of the marriage…’]. In my view, given her gainful employment, I do not see – vis-à-vis Mr Fitzpatrick - that there is any impediment to Ms Griffin being able to live the life-style that she chooses.
Conclusion
In my view, the most significant considerations revolve around the modest duration of the marriage, and Ms Griffin’s financial contribution to the mortgage, rates and body corporate fees. Another relevant consideration, perhaps a factor under s.75(2)(o), relates to the already mentioned consistently pressured financial arrangements that permeated the marriage, at least from the side of Ms Griffin. About the “unusual” (to use Ms Godtschalk’s favoured and decidedly apt word) financial basis of the relationship, there can be no doubt. Mr Fitzpatrick seemed to indicate that he saw nothing unusual about it, and that Ms Griffin readily accepted “the arrangements” under which the relationship was to be conducted. Given the nature of the proceedings, and that Mr Kearney acknowledged in the context of the financial agreements that there was no coercion asserted, it is not appropriate to comment about a stringent financial arrangement being a suitable foundation for a long-term marital relationship. Adults of the age and maturity of these parties should be left to organise their lives as they determine.
I have already commented that the relationship was, by any measure, of modest length. The financial contribution to the outgoings, in paying half of the mortgage repayments, half the rates and half the body corporate fees, for approximately 3 years, and given her income compared to Mr Fitzpatrick’s, is a not insignificant consideration.
I should also say – and I do so without intending any undue criticism - that the relationship gave all the appearances of being at least as much (and in some respects even more so) a financial partnership as it was a marriage. In this respect, it was clearly a situation of a senior financial partner who had essentially all the equity and who literally pulled all the purse strings, and a junior partner who was required, in effect, to “buy in to” the partnership.
One other comment should be made. It concerns Mr Fitzpatrick’s proposal that Ms Griffin be paid $30,405. Viewed from the perspective of Mr Fitzpatrick attributing a value to the relationship with the woman he said he once loved, both in terms of its quality and duration, it could be contended that such a proposal was bordering on the derisory.
An alternative perspective might be that it reflected something of an assessment on Mr Fitzpatrick’s part of his disappointment at the failed relationship. Which of the two views should be preferred, or whether there should be a further exploration of any other possible explanations for the extremely modest proposal, need not be decided here. However, from what has already been stated, it is clear that
Mr Fitzpatrick has viewed the [value of the] relationship essentially, if not exclusively, in economic terms. Such a view is necessarily one dimensional. To state the obvious, relationships comprise more than the economic and financial assets that each party brings to them. There is a fundamental warp and woof, if not essential sinew, to a relationship that cannot be measured in financial terms. All of that said, that is precisely what this Court is required to do under the Act.
In the light of the facts presented to the Court, Ms Godtschalk pressed that the Full Court decision in GBT & BJT[32] was instructive. In that case, in a relationship of approximately 6 years, the trial judge, Strickland J, divided the asset pool 82.5% to the husband and 17.5% to the wife. On appeal, the Full Court, comprising Kay, Holden and Warnick JJ, held that his Honour erred and that a narrower band of assessment was called for on the facts of the case. Their Honours assessed that that range should be within the span of 5-7.5% of a total asset pool of approximately $3 million. It should be noted that the Full Court and Strickland J were considering an award that embraced the whole of the asset pool, whereas here, two of the three quite large assets have effectively been quarantined in favour of the husband, and that Ms Griffin’s award will be solely referable to the agreed value of one asset only, the former matrimonial home.
[32] [2005] FamCA 683.
Having regard to the statutory requirement in s.79(2) that any award be just and equitable, in my view a modest adjustment should be made in favour of Ms Griffin.[33] I have already noted that both parties should keep their respective superannuation entitlements untouched by the other, and that Mr Fitzpatrick should also keep pristine his wine collection. Mr Fitzpatrick should also not expect any repayment of the “loan” earlier referred to of $5450.00. In those circumstances, the point of reference for the award to Ms Griffin should be the value of the [B] property, which was agreed to be $560,000.
[33] Given that it could be argued that, as a matter of jurisprudence, s.79(2) (if not Part VIII of the Act more generally) is a statutory manifestation of the principle of “distributive justice” in the legal [and in a sense the moral or equitable] resolution of property disputes between persons who have been in a relationship, and notwithstanding that the remarks are from a totally other area of the law, it may not be inapt to note the comments of Lord Steyn in McFarlane v Tayside Health Board [2000] 2 AC 59, where his Lordship said [at p.82]:
It may be objected that the House must act like a court of law and not like a court of morals. That would only be partly right. The court must apply positive law. But judges’ sense of the moral answer to a question, or the justice of the case, has been one of the great shaping forces of the common law. What may count in a situation of difficulty and uncertainty is not the subjective view of the judge but what he reasonably believes that the ordinary citizen would regard as right.
It may be that Lord Steyn’s comments have wider application in determining the “just and equitable” orders to be made in appropriate family law proceedings. But such matters are, of course, for higher authorities to determine and do not form part of the formal resolution of the current litigation between Mr Fitzpatrick and Ms Griffin.
In my view, the justice and equity of the case requires that the adjustment in favour of Ms Griffin should not be the figure proposed by Mr Fitzpatrick of $30,405, which (on my calculations) represents approximately 5.5% of the agreed value of the [B] property. It does little justice, in my view, to either the nature of the marriage or the mutual commitment (and of course other things) that each brought to it, albeit in significantly different ways.
Rather, the order should be that Mr Fitzpatrick pay to Ms Griffin, within 60 days of these orders, the sum of $64,400. This represents 11.5% of the agreed value of the [B] property.[34] In the event that that sum is not paid within 60 days, the [B] property is to be sold and the net proceeds divided so as to reflect the payment to Ms Griffin of the amount stated. Otherwise, the orders will be as sought by Mr Fitzpatrick.
[34] For comparative purposes, measured against the total asset pool as calculated by Mr Kearney of $1,773,674, the sum I have ordered Mr Fitzpatrick to pay to Ms Griffin (assuming my mathematics are correct) represents approximately 3.65% of the total asset pool.
For the sake of completeness, and given the proclivities exhibited throughout the evidence, and to ensure there are no further grounds for dispute, each party should pay their own costs of the proceedings.
I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Neville FM
Associate: Renee Davidson
Date: 27 August 2008
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