G and C
[2009] FCWA 43
•30 APRIL 2009
[2009] FCWA 43
| JURISDICTION | : | FAMILY COURT OF WESTERN AUSTRALIA |
| ACT | : | FAMILY COURT ACT 1997 |
| LOCATION | : | PERTH |
| CITATION | : | G and C [2009] FCWA 43 |
| CORAM | : | PENNY J |
| HEARD | : | 25 & 26 SEPTEMBER 2008 |
| DELIVERED | : | 30 APRIL 2009 |
| FILE NO/S | : | PT 2969 of 2007 |
| BETWEEN | : | G Applicant |
| AND | ||
| C Respondent | ||
| Catchwords: |
Property settlement - de facto relationship - initial contributions of applicant now 98% of asset pool - respondent greater contributions to welfare of family - s 205ZD(3) factors favour respondent
Legislation:
Family Court Act 1997 - s 205ZG
Category: Not Reportable
Representation:
Counsel:
| Applicant | : | Mr S Jones |
| Respondent | : | Mr J Tydde |
[2009] FCWA 43
Solicitors:
| Applicant | : | Paterson & Dowding |
| Respondent | : | O'Sullivan Davies |
Case(s) referred to in judgment(s):
Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener)
(2003) FLC 93-143
Phipson and Phipson [2009] FamCAFC 28
Pierce v Pierce (1999) FLC 92-844
[2009] FCWA 43
1 The parties, [Mr G] and [Ms C], never married but lived in a de facto
relationship for approximately nine years. There is one child of that relationship, [Tania], born [in] 1999. The parties have been able to agree that [Tania] should reside with [Ms C] and [Mr G] will spend time with her on two weekends out of each three, and for half the school holidays. However, they have been unable to agree the manner in which their assets should be divided.
The issues
2 [Mr G] had purchased a property in [the metropolitan area] 10 years prior to the
parties living together. This property was the home in which they resided during the course of their relationship. At the commencement of the relationship [Ms C] had little in the way of assets. The [suburban] home is now the only asset of any significance owned by the parties. [Ms C] says she has made a considerable non- financial contribution to that property by way of her assistance in completing renovations during the course of the relationship and maintenance and renovations performed by her post-separation. [Mr G] disputes the extent of the contributions alleged by [Ms C].
3 [Tania] suffered from medical issues as an infant. She refused to eat and was
fed through a tube until she was three years old. She has also suffered from developmental delay. [Ms C] says she has made a significantly larger contribution to the welfare of the family than has [Mr G] as a result of the care she has given [Tania] while the parties were living together and since separation.
4 [Ms C] alleges she has a limited capacity for work as a result of suffering from
Chronic Fatigue Syndrome. [Mr G] disputes this fact and says that [Ms C]’s ability to earn is greater than submitted by her.
The position of each of the parties
5 [Mr G]’s case is that the assets of the parties, of which the home in [the
metropolitan area] represents 98%, should be divided 35% to [Ms C] and the balance
to him. [Ms C]’s case is that she should retain 55% of the assets and [Mr G] 45%.6 They both agree that as part of the settlement, the [suburban] home will be
transferred to [Mr G], and [Ms C] will move out of the premises upon being paid out
her entitlements pursuant to this judgment.
Comment
7 It is clear from around February 2007, when these parties physically separated that each of them has been focussed on potential legal proceedings in this Court.
8 The transcript of [Ms C]’s evidence when she sought a Violence Restraining
Order before the magistrate on 9 February 2007, the day the parties physically separated, makes interesting reading. In that transcript [Ms C] describes [Mr G] discussing with her the fact that she had been having a relationship with another man. She admitted to him that this had occurred. She described [Mr G] as being relatively
[2009] FCWA 43
understanding about this fact initially, but after a few days he became angry about it. [Ms C] describes herself leaving the house and leaving [Tania] with [Mr G]. She came back in the morning. They discussed when [Mr G] was going to look after [Tania] that week. [Mr G] stated that he had been documenting the times that [Ms C] had been away on a weekend visiting the person she is in a relationship with. [Ms C] says [Mr G] was recording the conversation.
9 [Ms C] stated that she went upstairs where she knew there were some
pornographic magazines owned by [Mr G]. She dropped the box on the floor. She
describes as follows:“He knew exactly what I was trying to get, because I didn’t have anything on him, and I know it’s desperate but I did do that because I thought “I’m going to take that, even though it probably won’t stand up”. I know that it’s pathetic, but that’s what I did.”
10 The parties then scuffled over the box and she was pushed down. The police
were subsequently called. She described [Mr G] as not having been violent before, but he restrained her for an hour, lying on top on her, because she wanted to leave the house.
11 [Ms C] told the magistrate she rang a lawyer. She states:
“I rang a lawyer and she said “it’s not looking good, well, she said in terms of - because he’s had the house for 21 years”, but the property – I renovated that whole home with him, with my own arms. …But I can’t prove any of these things.”
12 [Ms C] talks about being terrified “that she is going to choose the wrong lawyer and going to lose her daughter”.
13 As stated previously, issues relating to the child have been resolved. In my
opinion, [Ms C] has taken steps to maximise her entitlements to property settlement and to exaggerate her contributions. I will discuss this later in the judgment. An example of her attitude to the application is reflected in the chronology. In [Mr G]’s chronology he describes the parties moving in together in January 1998 and states:
“Respondent and respondent’s seven year old son move into the
respondent’s house at [the metropolitan area].”
14 At that time the property had been owned by [Mr G] for 10 years and was clearly his house. In [Ms C]’s response, she amends that entry as follows:
“Respondent and respondent’s seven year old son move into the
respondent’s house at [the metropolitan area] house.”
15 Why [Ms C] would want to make this distinction I do not know other than to attempt to improve her case.
16 [Ms C]’s affidavit for trial totalled 42 pages of affidavit with 460 paragraphs.
Attached to the affidavit was a further 47 pages of annexures. At the hearing she
[2009] FCWA 43
tendered a book of photographs. This book has in excess of a 100 pages of photographs. After separation [Ms C] did some maintenance work around the house. Every step she has taken she has photographed and recorded, no doubt for the purpose of this litigation. In my opinion, this work was completed for the purpose of enhancing her claim. There is no evidence that the improvements made by her have necessarily increased the value of the property, although I am sure that they improved ambience in the environment in which she was living.
17 [Mr G], on the other hand, was reluctant to give [Ms C] credit for the work done
by her around the house. He was also reluctant to acknowledge that, in fact, much of the renovation work completed on the house while the parties were together was funded by way of mortgage rather than from his income.
| The law | ||||||||
| 18 | The approach to be taken in relation to an application for property settlement | |||||||
| pursuant to s 205ZG of the Family Court Act 1997 is the same as a property settlement pursuant to s 79 of the Family Law Act 1975. It is a four step process. Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143. Those steps are: | ||||||||
|
Assets and liabilities
19 At trial I made rulings on the assets and liabilities which should be included in
the schedule. In particular, I determined that expenses incurred by the parties after separation, in particular [Ms C]’s very significant borrowings for legal fees, should not be taken into account as liabilities of the relationship.
20 The assets and liabilities of the parties are as follows:
| Assets | $ |
| [The suburban home] | 925,000 |
| [Mr G]’s NAB Smart A/c | 1,114 |
[2009] FCWA 43
| [Mr G]’s van, tools and motorcycle | 14,965 |
| [Ms C]’s motor vehicle and contents | 17,065 |
| [Ms C]’s Commonwealth Bank A/c | 100 |
| [Mr G]’s superannuation | 14,654 |
| [Ms C]’s superannuation | 9,001 |
| [Mr G]’s interest in [a business] | 1,892 |
983,791
Liabilities
| NAB home loan | 138,984 |
| [Mr G]’s Visa credit card (at separation) | 9,917 |
| Esanda finance contract ([Mr G]) | 13,586 |
| [Ms C]’s car loan | 23,467 |
| 185,954 | |
| Net Assets | $797,837 |
| Contributions | |
| Financial contributions |
21 [Mr G] purchased the [suburban] property in May 1988 for $78,000. He
borrowed $62,000 to purchase the property, which sum was secured by way of a mortgage. [Mr G] says that in 1992 he commenced renovating the house and borrowed funds for this purpose as an owner builder. He stated that he added a second storey and carried out extensive renovations and improvements. He says these renovations were completed long before he met [Ms C].
22 A retrospective valuation has been obtained of the [suburban] property at the
time cohabitation commenced. The property was valued at $325,000 at that date. There was a loan outstanding secured by mortgage on the property in the sum of $98,000.
23 [Mr G] says that during the period that he and [Ms C] lived together they carried
out maintenance on the home, but not renovations. In cross-examination documents from the National Australia Bank were put to [Mr G]. On 27 November 2000 the mortgage on the [the metropolitan area] property was increased by $25,000. In March
[2009] FCWA 43
2004 the mortgage increased again by $50,000. According to [Mr G]’s evidence after
seeing these documents, the funds were spent on painting and renovations.24 At the commencement of the relationship [Ms C] says she had funds in the bank
of $12,000, a [motor] vehicle valued at $9,000, entitlement to a taxation rebate of $1,000 and furniture of $4,000. [Ms C] has no proof of the $12,000 she stated that she had in savings and I find it hard to believe that these savings existed. At the time the parties commenced living together [Ms C] was studying and working part-time doing leaflet drops. She was renting premises, and she was supporting her son [Jon] who was then 7 years old, without the assistance of any child support from the father of [Jon]. Her estimated income for the entirety of the financial year 1998 was $2,000. The only other source of income which [Ms C] would have received at this time would have been family benefits from the government. Without proof, I am not prepared to accept that these sums were held by her in a savings account.
Financial contributions during the course of the marriage
25 [Ms C]’s estimated taxable income during the course of the relationship was no
more than $3,000 in any year until 2004, when her taxable income was $5,650. In 2005 she commenced working as a [coach driver] and earned $36,158, and in 2006 $24,807.
26 At the time the parties commenced living together [Mr G] was operating [his
own business]. [Ms C] says he was earning approximately $20,000 per year. [Mr G] does not comment on his earnings at that time. In 2002 his taxable income was $17,006, and for the financial year ended 30 July 2003, his taxable income was $40,304. During this time he also worked part-time as a security officer.
27 In 2004 [Mr G] ceased operating the car repair business and started
[another business], which was to [repair and install equipment]. For the financial year ended 30 June 2004 his taxable income was $43,871, and for 30 June 2005 his taxable income was $21,126. The following year his taxable income was $24,391.
28 [Ms C] says that when [Mr G] was self-employed in [the business] he received
large sums of money for work completed by him in cash. She says at any one time [Mr G] held up to $50,000 in cash. In support of this contention, she produced to [Mr G] a business diary that he kept for the year 2005. [Mr G] stated that the sums written in the diary were quotes for work, not cash funds received for work done.
29 In this diary there are entries which indicate sums of money applicable on
certain jobs. There is no indication that these sums were payable in cash. On some of the pages there is a breakdown for parts, as well as labour. I cannot accept the evidence of [Ms C] that these sums indicate cash payments received by [Mr G].
30 [Mr G] says that there were some cash monies received by him, but no more
than $500. In my opinion, that is probably not a truthful estimate either, but I cannot
say with any certainty what funds were retained by [Mr G] by way of cash payments.
[2009] FCWA 43
31 [Ms C] has taken photographs of the place in the roof where she says the cash
funds were stored. This evidence was not helpful in assisting me to determine this
issue.32 It is clear that neither party earned large sums of money during the course of the
relationship. They were able to complete maintenance and renovations on the [suburban] property because they increased the mortgage by the sum of $75,000 during the course of the relationship.
33 [Jon]’s father paid no child support, apart from paying the occasional bill, until
2003. [Ms C] then received child support payments from him from May 2003 until January 2006 in the sum of around $600 per month. In that time $22,200 was paid towards [Jon]’s maintenance. During this time [Ms C] was in receipt of a carer’s pension and family benefit. Bank statements produced around this time indicate that her income was mainly spent on household expenses and personal expenses for [Ms C].
34 In [Ms C]’s affidavit for trial she stated that from 2002 to 2005 she received
child support back payments of around $25,200 from her previous partner. Those facts were not correct and [Ms C] would have been well aware of that fact. She put into evidence a schedule showing every amount for expenses relating to the family paid from the year 2000 until the parties separated. I have no doubt as a result of doing this she was well aware of when these payments from [Jon]’s father to her account were made and the total received.
35 During the relationship [Ms C] registered [a business]. [Mr G] says that a number of expenses for [materials] for this business were made from his credit card.
Non-financial contributions
36 The photographs produced by [Ms C] show that gardening and painting work
was completed around the house during the course of the relationship. There was also work completed on a bathroom, an air conditioner installed and other maintenance work completed during the time the parties lived together.
37 I have no doubt that the parties were both involved in effecting these improvements to the property.
38 Post-separation [Ms C] continued to complete maintenance work on the property
and to repaint the house. This contribution needs to be looked at in the context of her
living rent free in the home. [Mr G] was meeting the interest payments on the loan.39 [Ms C] says she assisted [Mr G] in his business activities. I accept that they
were both involved in doing what they could to maintain [Mr G]’s business when he was running [the previous business] and to set up the [new business], but again, in my opinion, [Ms C] has grossly exaggerated the works completed by her. These works were completed by her in a situation where both parties were doing their best to maximise household income.
[2009] FCWA 43
Contributions to the welfare of the family
40 At the time the parties commenced living together [Ms C]’s son, [Jon], was
around 7 years of age. In cross-examination [Ms C] was reluctant to concede that [Mr G] had made any contributions towards [Jon]’s living expenses from the time the parties commenced living together. Until 2003 [Ms C] received virtually no financial support from [Jon]’s father. She received government benefits when the parties were living together. When pressed, [Ms C] agreed that [Mr G] paid for family outings, provided accommodation for herself and [Jon] and paid most of the cost of the utilities for the family when they were living together and before [Ms C] was working. He also paid expenses for the registration of her car and other car expenses. It is clear that the only income, apart from some government benefits coming into the household, was [Mr G]’s income, and that it was used to support the family unit of himself, [Ms C] and [Jon].
41 After [Ms C] became pregnant with [Tania] she was frequently ill. [Mr G] was
primarily responsible for caring for [Jon] over that period. After [Tania]’s birth in September 1999, [Ms C] was not working and primarily [Tania]’s care-giver. [Tania] had feeding problems from shortly after birth and spent a significant time in hospital where efforts were made in an attempt to feed her. One two occasions she was in hospital for a three week period.
42 Eventually [Tania] was fed only by way of a tube and the parties had to insert
the tube themselves at home, which was distressing for both of them. While [Ms C] was primarily responsible for [Tania]’s care during this time [Mr G] would, after work, when [Tania] was hospitalised, spend the night with her to give [Ms C] a break.
43 [Tania] was later diagnosed as suffering from developmental difficulties. She
had appointments with occupational therapists and family psychologists. During this
time [Ms C] was mainly responsible for [Tania]’s care.44 [Ms C] says that [Mr G] refused to attend many appointments for [Tania]. [Mr
G] says that he was unaware of most of the appointments. During the period up to the time that [Ms C] commenced full-time employment as a [coach driver], [Mr G]’s income was the sole source of income for the family, apart from family benefit payments, and [Ms C] obviously had more time to attend to [Tania]’s needs.
45 [Ms C] worked on a full-time basis in 2005 and then took a year off because of
[Tania]’s poor health. When she returned to work she reduced her work hours to be
available to care for [Tania].
Conclusions on contributions
46 The net value of the former matrimonial home now makes up 98% of the assets
of the parties. Given the income of the parties during the course of the relationship, and the expenses associated with maintaining the family unit, it is unlikely that they would have been able to own a home if it had not been brought into the relationship by [Mr G].
[2009] FCWA 43
47 The Full Court (Ellis, Baker and O’Ryan JJ) in Pierce v Pierce (1999) FLC 92- 844 at p 85,881 stated in relation to the issue of the weight to be given to initial financial contribution:
“28. In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home: See also Campo and Campo (unreported, Full Court (Ellis, Lindenmayer and Finn JJ), Sydney, delivered 19 May 1995 at pages 21 and 22 of the joint judgment) and Zahra and Zahra (unreported, Full Court Sydney, delivered 3 October 1996, per Ellis J at page 10).”
48 [Mr G]’s contribution of the [suburban] home is signficiant. Both [Mr G] and
[Ms C] made financial contributions during the course of the relationship and since separation, but [Mr G]’s contributions were greater. [Ms C] made a significantly greater contribution to the welfare of the family, especially taking into account the health issues relating to [Tania]. In my opinion, the assets of the parties should be divided to take into account their contributions 65% to [Mr G] and 35% to [Ms C].
Section 205ZD(3) factors
49 [Mr G] is now aged 53. His employment involves heavy physical work
installing and repairing [equipment]. He has only very modest superannuation and
obviously has a significantly shorter working life than [Ms C], who is aged 38 years.50 [Mr G] stated in evidence that he now earns $40,000, but he does not know the
full extent of his income. He currently resides in his mother’s property and is not
paying any rent, although he says he is doing some renovations on the house.51 He was cross-examined in relation to the expenses incurred by him as declared
in his financial statement completed in 2007 compared to expenses as stated by him in May 2008. In the latter document he stated that his total expenditure, other than for fixed items, was $700 per week. [Mr G] did not pay child support, but paid the rates, water usage and mortgage in lieu of child support. His expenses indicated that he spends approximately $36,000 per year in after tax income. It is hard to see where these funds go, given his lack of living and rent expenses. His only explanation was that he quite often takes people out to dinner and spends money. It is obvious that [Mr G] has a reasonable disposable income.
52 [Ms C] says she is unable to work full-time, partly because of her obligation to
care for [Tania], and because of the fact she suffers from Chronic Fatigue Syndrome. In support of that contention, she provided an affidavit of [Dr D]. This affidavit was
[2009] FCWA 43
filed very shortly before the trial and stated that [Ms C] suffered from Chronic Fatigue
Syndrome. His diagnosis was as a result of self-report by [Ms C] of her symptoms.53 According to him, [Ms C] has suffered from Chronic Fatigue Syndrome since at
least 2004. However, in 2004 she worked full-time as a [coach driver]. In addition, she helped with painting and renovation work on the [suburban] property since that time and she attended on numerous medical appointments for [Tania] around this time.
54 [Ms C] has only seen [Dr D] on three or four occasions. I am not satisfied on the
evidence provided by [Ms C] that, in fact, she does suffer from Chronic Fatigue Syndrome and that it affects her ability to work. In evidence given by her in the Magistrate’s Court in February 2007, she described being “forced” to go back to work, but stated it was the best thing she ever did because she loved her job and it was “fantastic”. This occurred in 2004. She described being very happy when she went back working part-time two nine hour shifts a week. This occurred in 2006. These were not the comments you would expect someone with the symptoms of Chronic Fatigue Syndrome to make.
55 In [Ms C]’s affidavit she indicates that [Tania] now attends school on a full-time
basis and is progressing well. She has not been back in hospital since an operation to remove her tonsils. [Ms C] is now working 18 hours per week. She says she is unable to work any more because of medical difficulties. As I have stated previously, in my view, [Ms C] has exaggerated most of the evidence she has given in respect of her contributions during and after the relationship, her assets at the commencement of the relationship and, in my view, her medical condition. At a time when she says she was suffering from Chronic Fatigue Syndrome she commenced working full-time as a [coach driver] and, in her own words, loved it.
56 She is now in a relationship with [Mr O] and has been for some time. He did not
give any evidence and there is no evidence about his financial situation other than he is working. It is anticipated that this relationship will continue after these proceedings are completed.
57 [Ms C] intends to move out of the suburban] home after these proceedings are
finalised. She has been spending a significant period of time with [Mr O], either in his home or in her home. It is highly likely this relationship will progress to them living together.
58 [Ms C] says that [Mr G] is in a position to manipulate his income such that he
will not disclose the full extent of it to the Child Support Agency and, therefore, will not make appropriate financial contributions to [Ms C]’s care in the future. I was unimpressed with [Mr G]’s evidence about his income and the manner in which he disposes of it. While he says his income is around “$40,000”, he was not sure and was vague about his expenses. In my view, it is likely that he could put himself in a position where he would not make a proper contribution towards [Tania]’s upbringing.
59 In my opinion, there is no medical reason, established to my satisfaction, why
[Ms C] could not work full-time as a [coach driver] as she has done previously. However, I am mindful of the difficulties suffered by [Tania] in the past, including her developmental difficulties. The brunt of these problems will be borne by [Ms C]. I
[2009] FCWA 43
am satisfied, taking into account those considerations, [Ms C] has the ability to work
at least 30 hours per week.60 An apportionment of the assets taking into account contributions alone would
result in [Mr G] retaining assets totalling $518,594, and [Ms C] retaining assets
totalling $279,243.61 [Mr G]’s income is at least $40,000 per year. As a result of this judgment he
will have to borrow funds to pay out [Ms C]’s entitlements. He spends time with [Tania] two weekends out of three, and half the school holidays. He is likely to, and should, be assessed to pay child support in addition to the expenses he incurred when she spends time with him.
62 The above matters justify an apportionment to take into account s 205ZD(3)
factors in favour of [Ms C]. As to the issue of the appropriate percentage, the Full Court in Phipson and Phipson [2009] FamCAFC 28 at paragraph 39 of the judgment stated as follows:
“It is always important to keep in mind that an adjustment of X% for s 75(2) factors leads to a disparity in the value of property received by the parties representing 2 x X%. It is that disparity, measured in “money terms”, that requires consideration in determining whether the result is just and equitable: see Campbell v Kuskey (1998) FLC 92-795 at 84,928. In the present matter, the 12% adjustment led to a disparity in favour of the wife equivalent in value to 24% of the assets, or in “money terms” an amount of $226,947 out of a total asset pool of $945,614.”
63 Taking into account all the factors mentioned above and the comments in
Phipson (supra), in my view, there should be an apportionment to take into account s 205ZD(3) factors of 7.5% in favour of [Ms C]. This will result in [Mr G] retaining 57.5% of the assets and [Ms C] 42.5%. This will result in [Mr G] retaining assets totalling $458,756, and [Ms C] retaining assets totalling $339,081. [Ms C] will retain the following assets:
| Assets | $ |
| Motor vehicle and contents | 17,065 |
| Bank Account | 100 |
| Superannuation | 9,001 |
26,166
Liabilities
[2009] FCWA 43
| Car loan | 23,467 |
2,699
2,699
| Cash to be paid by [Mr G] | 336,382 |
| Total retained by [Ms C] | $339,081 |
64 This cash component will enable [Ms C] to put a significant deposit on a house,
should she wish to do so. In my view, she has the capacity to earn an income to
service a loan to establish herself in some accommodation with [Tania].65 [Mr G] will retain:
| Assets | $ |
| [The suburban home] | 925,000 |
| [Mr G]’s NAB Smart A/c | 1,114 |
| [Mr G]’s van, tools and motorcycle | 14,965 |
| [Mr G]’s superannuation | 14,654 |
| [Mr G]’s interest in [the business] | 1,892 |
983,791
Liabilities
| NAB home loan | 138,984 |
| [Mr G]’s Visa credit card (at separation) | 9,917 |
| Esanda finance contract ([Mr G]) | 13,586 |
| Cash amount to be paid to [Ms C] | 336,382 |
[2009] FCWA 43
162,487
| Net retained by [Mr G] | $458,756 |
66 Such a result, in my opinion, would be just and equitable in the circumstances.
I certify that the preceding [66] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court
Associate
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