FLV and FGRJ
[2003] FMCAfam 174
•28 May 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FLV & FGRJ | [2003] FMCA fam174 |
| FAMILY LAW – PROPERTY SETTLEMENT – Contributions – Change in circumstances – Foster children – Care of foster children not a contribution under s.79 – Foster children not children of the marriage – gift by husband’s parents a contribution Family Law Act 1975 Ferraro (1992) 16 Fam LR 1; (1993) FLC 92-335 |
| Applicant: | L V F |
| Respondent: | G R J F |
| File No: | PAM 4429 of 2001 |
| Delivered on: | 28 May 2003 |
| Delivered at: | Parramatta |
| Hearing Dates: | 9 & 20 August 2002, & 18 March 2003 |
| Judgment of: | Scarlett FM |
REPRESENTATION
| Solicitor Advocate for the Applicant: | Michael Brown |
| Counsel for the Respondent: | Mr Givney |
| Solicitor for the Respondent: | Cluff and Sant |
ORDERS
The Respondent husband is to pay to the Applicant wife the sum of $73,560 within three (3) months of the date of this Order.
Upon payment to her of the sum of $73,560 the wife is to transfer to the husband the whole of her right, title and interest in the former matrimonial home being the whole of the land contained in Certificate of Title Folio Identifier situate at and known as 16 C Crescent H in the State of New South Wales.
If the husband fails to pay to the wife the said of $73,560 within the time specified in Order 1, then:
(a)the Respondent is to pay interest on the said sum or such part of it remains unpaid at the rate provided by Rule 22.01;
(b)the former matrimonial home is to be sold at a price agreed between the parties and failing agreement at a price as determined by the President of the Real Estate Institute of New South Wales or his or her nominee and the proceeds of sale are to be divided as follows:
(i)In payment of the mortgage presently secured over the former matrimonial home;
(ii)In payment of all legal fees and estate agents’ commissions relating to the sale;
(iii)In payment to the Applicant of the sum of $73,560 together with any interest due pursuant to these Orders; and
(iv)The balance to the Respondent.
The Applicant is declared the sole owner to the exclusion of the Respondent of the Mitsubishi Star Wagon motor vehicle currently in her name and possession and the Applicant is to indemnify the Respondent and keep him indemnified in respect of the debt owing to AGC in relation to the said vehicle.
The Respondent is declared the sole owner to the exclusion of the Applicant of the Toyota Hi-Lux motor vehicle currently in his possession.
Each party is to retain the sole right title and benefit to all other items of personal property and financial resources presently in their respective name possession or control.
The parties are to do all acts and things and sign all documents necessary to transfer into the husband’s name the personal loan from AGC Finance relating to the construction of the garages at the former matrimonial home.
In default of either party doing all such things and executing all such documents as may be necessary to comply with these orders within seven (7) days of being called upon to do so then the Registrar or a Deputy Registrar of the Federal Magistrates Court shall be appointed pursuant to s.106A of the Family Law Act to execute such document in the name of the person to whom the direction was given and to do all acts and things necessary to give validity and operation to such documents.
All documents produced in answer to any subpoena other than exhibits may be returned.
The Application is removed from the Pending Cases List.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAM 4429 of 2001
| L V F |
Applicant
And
| G R J F |
Respondent
REASONS FOR JUDGMENT
This is a property application by the wife, who originally sought orders that the husband should pay to her the amount of $52,500, being 70 percent of the equity in the former matrimonial home at 16 C Crescent, H and, on receipt of that amount, she would transfer her interest in the property to him.
The other orders that the wife seeks are to this effect:
(a)the wife should be declared the sole owner of a Mitsubishi Star Wagon motor vehicle whilst being responsible for the debt owing to AGC in relation to the vehicle;
(b)the husband should be declared the sole owner of a Toyota Hi-Lux motor vehicle;
(c)the parties should retain the items of personalty that they presently hold; and
(d)the husband should remain responsible for a personal loan from AGC Finance.
In his Response, filed on 11th March 2002, the husband seeks to pay the wife the sum of $25,000 in return for her share of the former matrimonial home. He consents to the other orders sought by the wife.
What has happened since the matter was originally heard is that the wife’s situation changed, in that four foster children who were residing with her left her care on 21St October 2002. Her financial circumstances have changed, which will have an effect on the subsection 75(2) factors.
The matter was re-opened before me on 18th March 2003 and Mr Brown, for the wife, submitted that the change in circumstances would have an effect on the wife’s claim. He conceded that she would no longer be entitled to a 20 percent adjustment in her favour, which would see her entitled to 70 per cent of the value of the matrimonial assets, but rather less, namely 10 per cent.
The husband’s counsel, Mr Givney, submitted that the wife could expect no adjustment in her favour from subsection 75(2) factors, and that the wife’s claim falls within the range of 25 to 30 per cent, at best.
Background
The parties commenced to reside together in November 1992. They were married on 19th June 1999 and separated on 7th February 2001. There are no children of the marriage. The parties are divorced. A decree nisi of dissolution of the marriage became absolute on 25th July 2002.
The parties were both working at the time they met. The wife was working as a clerk; the husband was working for M L. They resided together in rental accommodation at W H.
The husband was a widower. His first wife was killed in an accident and on 24th June 1992 he received the sum of $148,933.84 by way of compensation.
In 1993, the husband purchased a block of land at 16 C Crescent H for $95,000, using some of the money he had received the year before. The wife was unemployed for the duration of that year, but she obtained employment in 1994. That same year, the husband started two businesses, “G F M” and, in partnership with one W J, a business called “W S”.
In March 1995, the husband obtained a loan of $120,000 from a solicitor’s mortgage for the purpose of building a house on the land. He also borrowed an amount of $35,000 from Avco Financial Services. When the house was built, the parties moved into it. The husband’s parents painted the house internally and externally.
In 1996 the parties refinanced the mortgage through St. George for $160,000. Further amounts were borrowed from Avco, bringing their indebtedness to $19,150. The parties also borrowed the sum of $11,000 from a friend called P K, who later died.
In 1997, the mortgage fell into arrears. Eventually, after legal proceedings, the mortgage was again refinanced, this time through Broadway Credit Union.
In 1999, the husband’s parents gave him the sum of $20,000, which he used to purchase a Holden Commodore motor car. This car was subsequently traded in on a Mitsubishi Star Wagon. The husband borrowed the sum of $5,000 from Avco Financial Services to meet the balance of the purchase price for the Star Wagon.
The parties were married in June 1999, although they had been residing together since 1992. In July of that year, they commenced to act as foster parents to two children, having successfully completed a course run by the Department of Community Services. In February 2000, they also commenced to care for two other foster children, the elder sisters of the two children they already had.
The parties separated on 7th February 2001, after an incident involving one of the children. The four foster children remained living with the wife. The husband remained living in the former matrimonial home.
The wife has formed a new relationship, and she lives in a de facto relationship with one D S. They commenced cohabiting in June 2002. On 25th July 2002 the husband and wife were divorced.
On 21st October 2002 the Department of Community Services removed the four children from the wife’s care. The wife continues to reside with Mr S, and they now have a child of their own, a little girl who was born on 2nd December 2002.
Issues
The issues between the parties concern the amount of contribution by each party and what adjustment, if any, should be made pursuant to subsection 75(2) of the Family Law Act. The Wife says that her contribution to the assets should be assessed at 50 percent and that the s.75(2) factors call for a further adjustment of 10 percent in her favour, so that she would be entitled to 60 percent of the net value of the assets.
For the husband, Mr Givney submits that the husband’s contribution should be assessed as significantly greater than that of the wife, to the extent that the contributions favour him to the extent of 75 percent by him and 25 percent by the wife. He also submits that there should be no adjustment in favour of the wife for s.75(2) factors. In short, he submits that the husband should be entitled to 75 percent and the wife to 25 percent.
One issue that was argued was whether subsection 75(2) applied to the wife’s care of the foster children. When the matter was originally before the Court, the children were still living with the wife, but, when the matter came back for re-argument due to a change in circumstances, the children were no longer in her care. Mr Brown, for the wife, submits that it is relevant that the wife’s income has decreased because of the fact that she no longer has the children in her care. She was receiving the sum of $1264 per week, but the family income has been reduced to $727 per week. At the same time, she now has a child of her own to support.
Mr Givney submits that the wife is trying to “have it both ways” in that she is saying that she no longer has the children and she no longer has the large income, so she should still be entitled to an adjustment in her favour. He submits that, as she no longer has the care of the foster children and she is already in a new relationship, there are no grounds for any s.75(2) adjustment in her favour.
Principles to be applied
When dealing with applications to vary property interests, courts exercising jurisdiction under the Family Law Act must not make an order under the provisions of s.79 unless satisfied that, in all the circumstances, it is just and equitable to make the order[i]. Subsection 79(4) sets out a number of matters the court must take into account. They include:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties of the marriage or either of them;[ii]
(b)the contribution (other than a financial contribution) made directly or indirectly or on behalf of a party to the marriage or a child of the marriage;[iii]
(c)the contribution made by a party to the welfare of the family, including any contribution made in the capacity of homemaker or parent;[iv]
(d)the effect of any proposed order upon the earning capacity of either party to the marriage;[v]
(e)any relevant matters referred to in subsection 75(2);[vi]
(f)any other order made under the Family Law Act affecting a party or a child of the marriage;[vii] and
(g)any child support under the Child Support (Assessment) Act 1989.[viii]
In dealing with applications under s.79 of the Family Law Act, the Full Court of the Family Court has made it clear that there are three steps to be followed by a court. First, the Court must identify the property of the parties and ascertain its net value.
Second, the court must look at the contributions of the parties, following the principles set out in s.79(4).
Third, the court then considers the relevant factors as set out in Subsection 75(2). This may involve an adjustment in favour of one or other of the parties. This approach has been laid down in cases such as Ferraro (1992) 16 Fam LR 1; (1993) FLC 92-335 and McLay (1996) 20 Fam LR 239; FLC 92-667.
The Matrimonial Assets
The parties’ legal advisers have submitted an agreed list of the assets and liabilities. They are the following:
a)Real estate at 16 C Crescent H $425,000.00
b)Husband’s Toyota Hilux motor vehicle $6,000.00
c)Husband’s furniture $3,000.00
d)Husband’s lawnmowing business $2,000.00
e)Husband’s Commonwealth Bank account 28001486 $100.00
f)Wife’s Mitsubishi Star Wagon $18,000.00
g)Wife’s Westpac Bank account 139286 $500.00
h)Wife’s furniture $3000.00
TOTAL $457,600.00
The gross value of the matrimonial assets is $457,600.00.
The parties’ agreed liabilities are:
(a)Broadway Credit Union $170,000.00
(b)GE Finance $4,400.00
(c)AGC (husband) $800.00
(d)Husband’s AGC car loan $3,600.00
(e)Australian Taxation Office (Husband’s tax debt) $7,200.00
TOTAL LIABILITIES $186,000.00
By subtracting the liabilities of $186,000.00 from the gross value of $457,600 I arrive at a net value of the matrimonial assets of $271,600.
The contributions of the parties – Section 79(4)
The Court is required to take into account three different types of contributions made by or any behalf of a party to the marriage. Subsection 79(4)(a) requires the Court to consider the financial contribution made directly or indirectly to the “acquisition, conservation or improvement of any of the property”. Subsection 79(4)(b) requires the Court to consider the contribution other than a financial contribution to the “acquisition, conservation or improvement of any of the property”. Subsection 79(4)(c), on the other hand, requires an examination of the contributions made by the parties to the welfare of the family, “including any contribution made in the capacity of homemaker and parent.”
There is evidence that in 1999 the husband’s parents gave him the sum of $20,000, which he used to purchase a 1997 Holden Commodore motor car.[1] This car was traded in on the Mitsubishi Star Wagon that the wife still has in her possession. The decisions in Gosper (1987) 11 Fam LR 601; FLC 91-818 and Kessey (1994) 18 Fam LR 149; FLC 92-495, make it clear that it is still open to the court, in an appropriate case, to regard the gift as a contribution by the party to whom the donor is related. The decision by Chisholm J, in Pellegrino (1997) 22 Fam LR 474; FLC 92-789 supports this view. In my view, this gift should be regarded as a contribution by the husband.
[1] Husband’s affidavit sworn 5.8.2002, paragraph 18
The evidence clearly shows that the husband’s initial contribution to the marriage was a significant one, in that he provided the funds needed to purchase the land at 16 C Crescent out of the compensation money that he had received the year before. Neither party had any other significant asset at the commencement of cohabitation. This contribution must still be given a considerable amount of weight (Pierce (1999) FLC 92-844).
The husband worked throughout the period of cohabitation, except for a period of time in 1993 or 1994 when he lost his job with M L and was unemployed for some time. He still has the business called “G F M”, which he commenced in 1994. In addition, there was the gift of $20,000 by the husband’s parents referred to above in paragraph 32.
For her part, the wife was working when cohabitation commenced but was unemployed in 1993. She recommenced working in 1994 and remained in employment until September 1999. The wife ceased work to care for the foster children.
Mr Givney for the father has submitted that the wife’s contribution to the care of the foster children from 1999 until 2002 cannot be regarded as a contribution for the purposes of s.79(4), as the children are not children of the marriage. I agree with this submission. Subsections (a), (b) and (c) of s.79 all refer to “a child of the marriage” or “any children of the marriage.” The wife has certainly made a contribution as an income provider and as a homemaker but this only applies to the family constituted by the husband and herself. Whilst it is true that the wife received a regular amount from the Department of Community Services, this payment was obviously for the support of the four foster children, and there is no evidence that the wife made any sort of a profit out of the allowance.
At the same time, the wife’s contribution should not be undervalued. There is evidence that the husband was a very poor financial manger and that the mortgage on the former matrimonial home had to be refinanced on two separate occasions. One of those occasions arose when the Sheriff had actually arrived with some form of legal process.
The husband’s actions in indecently assaulting the child T, which led to the breakdown of the marriage, was argued as a factor to be taken into account, because the wife was so distressed by the discovery of the offences (for which the husband later received a sentence of periodic detention) that she required counselling for some time. I am not satisfied that this can be taken into account under s.79, as the parties separated almost immediately. The wife was left with the task of caring for the four foster children after the separation, but, as they were not children of the marriage, this cannot be taken into account under s.79.
I am of a view, however, that the husband’s poor financial management is a factor that I can take into account as having some effect on the wife’s contribution (Kennon (1997) FLC 92-757. The wife contributed to the domestic side of the family and her contribution should have some weight.
That being said, I am not convinced that the wife’s contribution approaches the 50 percent submitted by Mr Brown. The significant financial contributions by or on behalf of the husband are matters to which I attach a fair degree of weight, and I find that the contributions favour the husband by 65 percent to 35 percent for the wife.
Subsection 75(2) Factors
Subsection 79(4)(e) requires the Court to take into account “the matters referred to in subsection 75(2) so far as they are relevant”. I propose to consider them in order.
Subsection 75(2)(a) requires the Court to take into account the age and state of health of each of the parties.
The husband was born on 19th March 1960, so he is now aged 43 years. The wife was born on 15th May 1969. She is aged 33 years. The husband appears to be in good health.
The wife has undergone counselling as a result of the revelations relating to the husband’s abuse of the foster child. She had been seeing a psychologist called S S assistance in dealing with the stress. Her consultations were initially weekly, then fortnightly, and the counselling has apparently now concluded. The psychologist gave evidence that the wife appeared to be finding support from her new relationship. There is no evidence before me to indicate that the wife is not otherwise than in good health.
Subsection 75(2)(b) requires the Court to consider the income, property and financial resources of each of the parties and their physical and mental capacity for gainful employment.
The wife’s income has dropped since the four foster children have left her care. She filed a fresh financial statement on 12th February 2003, showing that she receives a Family Allowance of $77 per week. Her de facto partner has an income of $650 per week. She has no real estate of her own and no financial resources. She has the Mitsubishi Star Wagon and some furniture and personal effects.
The husband has the real property in his name, he has a Toyota Hilux truck which he uses in his lawnmowing business, and the lawnmowing business itself. He has some furniture and a small bank account. In his financial statement he estimated his income from the lawnmowing business at $800 per week. Whilst Mr Brown for the wife expressed scepticism at that figure and suggested that it was actually higher, I am not satisfied that it has been shown to be significantly higher. The husband’s financial statement does not show any financial resources.
I refer to subsection 75(2)(c), and note that neither party has the care and control of a child of the marriage who has not attained the age of 18 years.
Subsection 75(2)(d) states that the Court must consider the commitments of each of the parties that are necessary to enable that party to support both himself and herself and also a child or another person that the party has a duty to maintain.
The husband does not have a commitment to support anyone other than himself. The wife now has a young child from her current relationship. The child Eleanor was born on 2nd December 2002.
Subsection 75(2)(e) requires the Court to consider the responsibilities of either party to support any other person. Neither party has any responsibility to support any other person.
Subsection 75(2)(f) refers to the eligibility of either party for a pension, allowance or benefit.
The husband does not receive any pension, allowance or benefit. The wife receives Family Allowance, but I understand this to be an income-tested allowance and I do not propose to take it into account.
Subsection 75(2)(g) requires the court to take into account a standard of living that in all the circumstances is reasonable. The husband’s standard of living does not appear to have changed, as he is still residing in the former matrimonial home. The wife is now residing with her de facto partner.
Subsections 75(2)(h), (j), (k) and (l) refer to matters which are not relevant to the property proceeding, but are more referable to maintenance issues.
Subsection 75(2)(m) requires the court to consider, in the case where either party is cohabiting with another person, the financial circumstances relating to the cohabitation.
The husband is not cohabiting with another person. The wife now resides in a de facto relationship.
An order made or proposed to be made under section 79 is referred to in subsection 75(2)(n). As these are property proceedings, the Court will be making an order that the parties should divide the proceeds of the sale matrimonial home once all relevant matters are considered.
Subsection 75(2)(na) refers the court to any child support under the Child Support (Assessment) Act 1989. It is not relevant to these proceedings.
Subsection 75(2)(o) refers the Court to any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account. There do not appear to be any facts or circumstances that need to be taken into account, other than those already referred to. Whilst there may have been a consideration under this heading if the wife was still caring for the foster children, the fact is that these children were removed from her care in October 2002. I am not persuaded that there are any grounds for an adjustment under this paragraph of subsection 75(2).
After considering all the relevant matters under subsection 75(2), I am not satisfied that any adjustment should be made.
Conclusions
The entitlement of the parties should be 65 percent to the husband and 35 percent to the wife. The net value of the assets is $271, 600, so the wife should receive 35 percent of that amount, namely $95,060. she currently holds the following assets:
(a) The Mitsubishi Star Wagon $18,000.00
(b) Westpac Bank account $500.00
(c) Furniture $3,000.00
TOTAL $21,500.00
By subtracting the amount of $21,500 from the sum of $95,060, I arrive at a figure of $73,560 for the entitlement of the wife. That is the amount that the husband should pay to her. The parties should retain the motor vehicles and the personalty that they currently have in their possession.
It is for these reasons that I make the orders in the attached schedule.
I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of Scarlett FM
Associate: A. Coutman
Date: 23 May 2003
[i] Section 79(2)
[ii] Subsection 79(4)(a)
[iii] Subsection 79(4)(b)
[iv] Subsection 79(4)(c)
[v] Subsection 79(4)(d)
[vi] Subsection 79(4)(e)
[vii] Subsection 79(4)(f)
[viii] Subsection 79(4)(g)
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