GATAKIS & GATAKIS
[2020] FCCA 616
•2 April 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| GATAKIS & GATAKIS | [2020] FCCA 616 |
| Catchwords: FAMILY LAW – Property settlement – long marital relationship – consideration of ‘myriad of contributions’ – where wife’s ill health and limited life expectancy affects future needs. |
| Legislation: Family Law Act 1975 (Cth), ss.72(1), 75(2), 79(2), 79(4) |
| Cases cited: Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116 |
| Applicant: | MS GATAKIS |
| Respondent: | MR GATAKIS |
| File Number: | DGC 2162 of 2019 |
| Judgment of: | Judge Mercuri |
| Hearing dates: | 29 and 30 August 2019 |
| Date of Last Submission: | 30 August 2019 |
| Delivered at: | Melbourne |
| Delivered on: | 2 April 2020 |
REPRESENTATION
| Counsel for the applicant: | Ms Colla |
| Solicitors for the applicant: | TNV Lawyers |
| Counsel for the respondent: | Mr McFarlane |
| Solicitors for the respondent: | RB Flinders Lawyers |
ORDERS
For the purposes of these orders, any reference to the applicant wife includes the executrix of the estate of the applicant wife and the applicant wife’s legal personal representative, Ms A.
Within 60 days from the date of these orders (“the date”), the respondent husband pay to the applicant wife the sum of $484,485, via her lawyers TNV Lawyers (“the payment”).
Contemporaneously with the payment, the applicant wife do all acts and things and sign all documents, at her expense if any, as may be required to withdraw the caveat dealing no … (“the caveat”) registered over the real property situate at and known as B Street, Suburb C in the State of Victoria, more particularly described in Certificate of Title Volume … Folio … (“the B Street, Suburb C property”).
Subject to the payment being made to the applicant wife by the respondent husband pursuant to order 1 herein, the respondent husband shall be solely liable for and indemnify the applicant wife in relation to any liabilities associated with the B Street, Suburb C property.
In the event that the whole of the payment has not been made by the date, the parties shall forthwith do all acts and things and sign all such documents as may be required to place the B Street, Suburb C property on the market for sale (“the sale”) on terms and conditions as agreed between the parties, and failing agreement:
(a)By auction with an agent as agreed between the parties and failing agreement in writing, such agent as is appointed by the President of the Real Estate Institute of Victoria (or his or her nominee) (“the agent”);
(b)The reserve price be agreed in writing between the parties and failing agreement, as determined by a valuer appointed by the President of the Australian Institute of Valuers (or his or her nominee) (“the valuer”);
(c)Each of the parties do all acts and things and sign all documents as may be required to execute a contract of sale in the form prepared by the solicitor or conveyancer having the conduct of the sale as agreed between the parties, and failing agreement, such solicitor as nominated by the President of the Law Institute of Victoria (“the solicitor”);
(d)The respondent husband give authority to the agent, valuer and solicitor with conduct of the sale to communicate with the applicant wife and this order serve as authority;
(e)The parties each cooperate in every way with the agent including:
(i)Making keys available to the agent;
(ii)Allowing inspection of the B Street, Suburb C property at all reasonable times requested by the agent;
(iii)Doing or saying nothing to hinder or prevent a sale being effected; and
(iv)Ensuring the B Street, Suburb C property, including the grounds, is in a neat and clean condition at the time of inspection by the agent and prospective purchasers, and the respondent husband be liable for any costs incurred to prepare the B Street, Suburb C property for sale as advised by the agent;
(f)In the event that bidding at the auction does not reach the reserve price, the parties shall negotiate with the highest bidder/s or any other interested person/s to effect a sale of the B Street, Suburb C property at a price which is not more than 5% below the reserve price or such other price as the parties then agree in writing; and
(g)If the B Street, Suburb C property remains unsold following the auction, the B Street, Suburb C property shall remain on the market until sold, the method and the terms of conditions of the sale to be agreed between the parties and failing agreement, to be determined by the agent, save that the sale/reserve price is to be agreed between the parties, and failing agreement as determined by the valuer.
Upon a contract of sale for the sale of the B Street, Suburb C property being entered into by the respondent husband, the respondent husband:
(a)Provide the applicant wife (via her lawyer) with a copy of the properly executed contract of sale within 48 hours of execution;
(b)Keep the applicant wife (via her lawyer) with a copy of the statement of adjustments in relation to the sale prior to settlement of the sale; and
(c)Inform the applicant wife (via her lawyer) with respect to any expenses and disbursements associated with the sale, prior to settlement of the sale.
Liberty be reserved to either party to apply with respect to the terms and conditions of the sale.
Pending the payment or sale:
(a)The respondent husband shall pay all insurances, rates, taxes and like apportionable outgoings incurred in respect of the B Street, Suburb C property as and when they fall due;
(b)The parties hold their respective interests in the B Street, Suburb C property upon trust pursuant to these orders; and
(c)The respondent husband be restrained by injunction from encumbering or further encumbering the B Street, Suburb C property without the written consent of the applicant wife.
At settlement of the sale, the applicant wife do all acts and things and sign all documents that may be required to withdraw the caveat at her expense, if any.
Upon completion of the sale, the proceeds of the sale be applied in the following manner and priority:
(a)Firstly, to pay all costs, commissions and expenses of the sale;
(b)Secondly, to pay such sum as is required to pay the whole of the payment outstanding, together with interest calculated at the rate pursuant to the Family Law Rules 2004 to the applicant wife, via her lawyers; and
(c)Thirdly, the balance then remaining to the respondent husband, via his lawyers.
The respondent husband shall retain for his sole and exclusive use, enjoyment and benefit all items of property (both real and personal and including choses-in-action and financial resources) in his name, possession and/or control, including but not limited to:
(a)His bank accounts and savings, including:
(i)Commonwealth Bank account ending …34;
(ii)P Bank account ending …33; and
(iii)Visa debit card;
(b)His Motor Vehicle 1; and
(c)His personal belongings and effects.
That the respondent husband shall be solely liable for and indemnify the applicant wife in relation to all debts and liabilities in his name or attaching to any item of property which he is to retain pursuant to these orders.
The applicant wife shall retain for her sole and exclusive use, enjoyment and benefit all items of property (both real and personal and including choses-in-action and financial resources) in her name, possession and/or control, including but not limited to:
(a)Her bank accounts and savings, including:
(i)Westpac Life account ending …06;
(ii)Westpac Choice account ending …83; and
(iii)ANZ account ending …76;
(b)D Bank Life Cover Policy number …50;
(c)Her Motor Vehicle 2; and
(d)Her personal belongings and effects.
That the applicant wife shall be solely liable for and indemnify the respondent husband in relation to all debts and liabilities in her name or attaching to any item of property which he is to retain pursuant to these orders, including but not limited to her ANZ Visa credit card.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all other real and personal property (including choses-in-action and financial resources) registered in the name or possession of such party, or to which that party is legally or beneficially entitled, as at the date of these orders;
(b)monies standing to the credit of the parties in any joint bank account are to be divided equally and the account closed;
(c)each party retain for their sole use and benefit any superannuation or employment benefits accrued in their sole name;
(d)insurance policies remain the sole property of the owner named thereon;
(e)each party shall be solely liable for and indemnify the other against any liability/ies in their name or encumbering any item of property to which that party is entitled pursuant to these orders; and
(f)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
AND THE COURT NOTES THAT:
(A)Pursuant to section 81 of the Family Law Act 1975 (Cth) the parties intend that these orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.
(B)Section 121 of the Family Law Act 1975 (Cth) provides that it is an offence punishable by imprisonment for up to one year to publish or disseminate to the public any account of family law proceedings which identifies the parties, witnesses or other people concerned with the proceedings, unless specifically authorised by the court.
IT IS NOTED that publication of this judgment under the pseudonym Gatakis & Gatakis is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT DANDENONG |
DGC 2162 of 2019
| MS GATAKIS |
Applicant
and
| MR GATAKIS |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for property adjustment under section 79 of the Family Law Act 1975 (“the Act”).
For the reasons which will become apparent shortly, the application filed on 8 July 2019 was listed with some urgency, initially for mediation and ultimately for trial. As the matter was unable to be resolved at mediation, it was heard before me on 29 August 2019.
Both parties gave evidence and were subject to cross examination. There were difficulties with the evidence given by both parties. The wife was clearly unwell and at times, struggled to focus on the questions being asked. At times, her answers were non-responsive. The husband sought for the court to draw adverse inferences in relation to the wife’s evidence.
The husband gave evidence with the assistance of a Greek interpreter. It was apparent that the husband understood some English and at times, answered questions directly in English before the interpreter was able to translate. Notwithstanding the availability of an interpreter, his evidence was sometimes difficult to understand.
Overall however, I found both parties to have done their best to answer questions of them honestly in the circumstances. Like many families that come to this court, these parties engaged in litigation at a difficult time in their lives having been unable to resolve an impasse about the appropriate adjustment to their property interests consequent upon their relationship coming to an end.
However, unlike many cases before this court, I did not detect the animus that one usually finds in family law disputes. The concession made by the husband that the relationship between him and the wife was one filled with love and that he still cared for the wife is evidence of that observation.
Background
The facts in this matter are not largely in dispute.
The parties met and commenced cohabitation in 2001. They married in 2002 and separated in about May 2019 initially under the one roof. For his part, the husband gave evidence that he first learnt of the wife’s desire to separate upon receiving a letter from her lawyers dated 27 May 2019.
There are no children of the relationship, although the husband has two adult children and the wife has one adult child. The wife also gave evidence, which I accept, that she had unofficially adopted her niece shortly after her birth and has financially supported her niece throughout her life.
The husband is 82 years of age. In 2009, he underwent triple heart bypass surgery.
At the time of the trial, the wife was 74 years of age. The wife was diagnosed with breast cancer in 2010 and underwent treatment at that time. It appears from the evidence that her condition went into remission. However, in 2015 the wife was diagnosed with an incurable form of lung cancer. Since May 2019, the wife has spent time on and off in palliative care.
The evidence before the court at trial was that the wife’s condition was such that she had a limited life expectancy of some months.
The wife gave evidence that the father of her daughter who was born in 1977, returned to the Country E shortly after her birth and the wife raised their daughter on her own. The wife also gave evidence that in 1978, her sister had a daughter whom she was unable to look after and as a result, the wife took on the responsibility of raising her niece and providing for her financially.
The wife stated that:
a)in 1984, she met and married an Australian man, and she and her daughter (but not her niece) moved to and settled in Australia;
b)she trained as a tradesperson, the wife commenced working in her husband’s business;
c)the wife and her then husband separated in 1994; and
d)following this separation, the wife deposed to receiving a property settlement of $23,000 in cash and several sewing machines.
In about 1998, the wife’s niece moved to Australia and commenced living with her. The wife, her daughter and her niece commenced renting a shop and dwelling on F Street, Suburb G (“the F Street, Suburb G property”). They lived there and ran a business from the F Street, Suburb G property.
The parties met in about 1996 through work. The husband and the wife commenced a romantic relationship in about 1999 and the husband moved in with the wife at the F Street, Suburb G property in about 2001.
At the time of cohabitation, the wife was still renting the F Street, Suburb G property and the parties lived there together for about a year.
It was common ground that the husband was previously married and had two children. It was also common ground that at or around the time the parties commenced their relationship, the husband separated from his first wife, ultimately divorcing her in 2001 and obtaining a property settlement. As a result of this property settlement, the husband retained the former matrimonial home at B Street, Suburb C, which was unencumbered at that time (“the B Street, Suburb C property”).
The wife relied upon an affidavit of Mr H who provided a retrospective valuation of the B Street, Suburb C property. Mr H valued the property as at 2001 at $350,000.[1] The husband did not seek to cross examine Mr H nor did he provide any evidence as to the value of the B Street, Suburb C property at the commencement of the relationship.
[1] Affidavit of Mr H affirmed 21 and filed 22 August 2019 at annexure -1, page 10.
The husband also gave evidence that at the commencement of cohabitation, he also had the sum of $100,000 being the remainder of his superannuation payout, which he received on retirement and rolled over into a term deposit.
There is some confusion as to whether the husband had an additional $65,000 at the commencement of the relationship which was used during the course of the relationship for travel purposes and the like. I will return to this in due course.
F Street, Suburb G property
The wife’s evidence was that at about the time that the husband moved in with her, the landlord offered to sell the F Street, Suburb G property to her for $200,000. She said that she wanted to purchase the F Street, Suburb G property, had accumulated savings of about $30,000 at the time and was still operating her business. The wife stated that the husband persuaded her not to purchase the F Street, Suburb G property but convinced her to move in with him to the B Street, Suburb C property where she could run her business from the family home.
The wife’s evidence in relation to the question of the purchase of the F Street, Suburb G property was as follows:
We discussed this issue at length as I was very interested in purchasing the freehold which would eventually provide me with some financial security but the husband told me not to worry about that, that I could live with him in the house in B Street, Suburb C and that this would be my financial security. I therefore did not purchase the property in F Street, Suburb G, to my detriment.[2]
[2] Affidavit of the wife sworn 6 and filed 8 July 2019 at paragraph 4.
The husband denied preventing the wife from purchasing the F Street, Suburb G property. His evidence in this regard, which he maintained in cross examination, was:
… I did not persuade or encourage the Applicant to turn down any alleged offer by her landlord that she purchase the residence in F Street, Suburb G. It was very early in our relationship and she was more than capable of making her own independent financial decisions.[3]
[3] Affidavit of the husband sworn and filed 7 August 2019 at paragraph 9.
The wife also gave evidence that just before the parties married, the husband continued to pressure her to terminate the lease at the F Street, Suburb G property on the basis that he wanted to get the pension and was concerned that her income, together with his earnings from a term deposit, would mean he would not qualify for the aged pension.[4]
[4] Affidavit of the wife sworn 6 and filed 8 July 2019 at paragraph 5.
The wife said that she was initially concerned about this as it would leave her without an income. However, the husband assured her that he would look after her and that the B Street, Suburb C property was large so she could continue to undertake work from home.[5] She said that on this basis, she ceased operating her business from the F Street, Suburb G property.[6]
[5] Affidavit of the wife sworn 6 and filed 8 July 2019 at paragraph 5.
[6] Affidavit of the wife sworn 6 and filed 8 July 2019 at paragraph 5.
Other than the comments set out above, the husband did not respond to the wife’s allegation in his affidavit material. In the course of cross examination, the husband rejected the suggestion that he had dissuaded her from purchasing the F Street, Suburb G property as a result of concerns that retaining it would affect his pension. He said:
She wanted me to buy it not… to buy it herself.[7]
[7] Transcript page 46 at line 32.
The husband denied telling the wife not to purchase the F Street, Suburb G property, and said that at that time he did not want to buy any more properties and that is what he told her.[8]
[8] Transcript page 47 at lines 29 to 30.
I prefer the husband’s evidence in relation to the proposed purchase of the F Street, Suburb G property and conclude that he did not persuade her to forego the opportunity to purchase the F Street, Suburb G property. However, I find that a discussion took place between the parties about the offer to purchase the F Street, Suburb G property, that the husband was not interested in funding the purchase and in those circumstances, the wife did not purchase the F Street, Suburb G property.
B Street, Suburb C property
Save for the first year of their relationship when the parties lived in the F Street, Suburb G property, the parties resided at the B Street, Suburb C property throughout the course of their relationship.
The husband’s evidence, which I accept, is that the B Street, Suburb C property is the home where he raised his children with his first wife, which he retained after he separated from his first wife and where he wanted to live for the remainder of his life.
It was common ground that the wife arranged for various boarders to reside with the parties at the B Street, Suburb C property. They were either members of the wife’s family or friends of her family. They paid for food and board.
The wife’s evidence, which I accept, is that she used the board money to pay for food and household bills. The husband paid for rates but otherwise the wife was expected to meet other household bills until recently when the husband met the costs of insuring the B Street, Suburb C property and paid water charges. The husband conceded however, that other than these recent expenses, historically he only met the council rates for the B Street, Suburb C property.
The wife also gave evidence, which I accept, that she continued to work from home. I accept her evidence that on average, she earned between $10,000 and $15,000 each year which she applied towards food, petrol, bills and car expenses. Her evidence was that she continued to work until 2015 when she received her most recent diagnosis.
The parties’ health
As stated, it is not in dispute that the wife was diagnosed with breast cancer in 2010. It is also not in dispute that the wife was diagnosed with lung cancer in 2015 and at that time, she was told that she had two years to live.
In her affidavit in support of her abridgment application, the wife annexed a copy of a letter to the court dated 14 May 2019 from Dr J, Oncology Registrar at K Hospital which said:
…She has had extensive treatment and further chemotherapy is unlikely to extend life expectancy. She is currently receiving compassionate access erlotinib oral targeted therapy with hope of extending life expectancy for a few months.[9]
[9] Affidavit of the wife sworn 7 and filed 8 July 2019 at annexure 1.
No other expert evidence was filed regarding the wife’s health or medical prognosis. The wife attended the hearing in a wheelchair. In the course of cross examination, she conceded that she had recently become wheelchair bound. She also conceded that until some two weeks prior to the trial, she had been able to walk with the aid of a walking stick but that her health had deteriorated.
The husband gave evidence that he:
a)is 82 years of age and suffers poor health;
b)has a heart condition, hip, leg and back ailments; and
c)uses a walking stick and takes medication for his heart.
No expert evidence was led as to the impact, if any, of these conditions on the husband’s life expectancy.
Property in the Country L
The husband asserted that the wife has an interest in property in the Country L which she has failed to disclose in these proceedings. His evidence is that he believes that the wife owns two properties in the Country L which he estimates to be valued at about $100,000 each. He said that he and the wife travelled to the Country L together during the relationship and they visited these properties and the wife told him that she owned them.
The wife denied owning any property in the Country L. She stated that during the marriage, the parties travelled to the Country L on two or three occasions for some three weeks each time. She said that during these holidays, the parties stayed with her family. She said that the first property referred to in the husband’s affidavit is in City M and is an apartment, not a two storey home as alleged. Moreover, the wife deposed that the first property is owned by her nephew. The wife stated that the second property referred to by the husband is owned by the applicant’s sister, was damaged by a typhoon in 2013 and again in 2018 when road extension works were undertaken and is uninhabitable.
On the basis of the evidence before me, while I accept that the parties visited the wife’s family in the Country L, there is insufficient evidence, on which to find that the wife owns or has an interest in any property in the Country L. Moreover, there is no expert evidence before the court as to the value of any such property. I place little, if any, weight on the husband’s assertions as to the value of these properties. There is no evidence as to the basis on which these assertions are made or his ability to give evidence as to the value of property in the Country L.
I therefore find that there is no proper basis on which to include any property in the Country L in the asset pool.
Similarly, I do not accept that any adverse inference ought to be drawn against the wife for not calling evidence from the owners of property in the Country L. The wife gave evidence, which I accept, that:
a)she did not own any such property;
b)the parties did visit some properties in the Country L whilst they holidayed there, which is consistent with the husband’s evidence;
c)those properties belong to other members of her family; and
d)one of those properties has been damaged in a cyclone.
Money sent to the Country L
It is common ground that the wife sent money to her family in the Country L from time to time.
The wife’s evidence, which I accept, is that she sent a total of $15,000 to $20,000 to her extended family living in the Country L. Of this amount however, the wife deposed that only about one third was her money. The remainder of the money came from her sister and her nephew who both live in Melbourne.
The husband produced one transfer in January 2018, in which the wife transferred just over AU$1,000.[10]
[10] Affidavit of the husband sworn and filed 7 August 2019 at annexure PG-3.
Counsel for the husband put to the wife in cross examination that she sent money to the Country L to purchase the two properties in the Country L referred to earlier in these reasons. The wife stated that she sent money to help her family, that her brother in law was a tradesman and that he was building a house in the Country L. Given the wife’s condition whilst giving evidence, it was difficult at times to be sure that she understood the question that was being put and at other times, it was difficult to understand her answer. On this point however, put at its highest, the wife appears to have conceded that:
a)she occasionally sent money to the Country L to help her family; and
b)some of this money was sent to her brother-in-law who is a carpenter and who was building a home.
These concessions do not establish, as the husband sought to do, that the wife consequently acquired an interest in a property in the Country L. In the face of the wife’s denial, which I accept, I make no such finding.
Moreover, it is common ground that during the parties’ relationship, the husband also gifted money to members of his family from time to time when they needed it.
On the basis of the totality of the evidence, I find that both parties, with the knowledge of the other, gave money from time to time to their respective families. This was supported by both of them and consistent with the nature of their relationship.
As previously stated, the evidence clearly shows that whatever income generated by the parties from
a)their respective pensions;
b)any work undertaken by the wife;
c)interest from term deposits; and
d)income from the boarders,
the parties were able to pay all household expenses, undertake their hobbies and pursue their interests, travel overseas and generally live a full life.
In this context, the payment of money to family members is not a factor which weighs in either party’s favour in determining what, if any, orders would be just and equitable in adjusting the parties’ property interests.
Gambling
The husband also asserted that the wife regularly gambled during the relationship and, in doing so, used almost the entirety of her income from a pension and carer’s allowance that she received for that purpose. It is not entirely clear whether this argument was put in support of a wastage claim or in support of the husband’s contributions during the relationship.
In any event, the wife’s evidence was that she did gamble from time to time during the relationship, but only when she had the funds available to do so. Her evidence was that on occasion, she won money whilst playing bingo and any winnings were applied to the mutual benefit of both parties.
When the issue of gambling was put to the wife in cross examination, she maintained that she only gambled when she had money available to do so, and did not gamble when she did not have the funds available to do so.[11]
[11] Transcript pages 23 to 27.
Counsel for the husband put bank statements to the wife from her Westpac bank account which showed that she had made numerous withdrawals at what appeared to be gambling venues during the period from 2016 to 2019.[12] Counsel also put bank statements from the wife’s ANZ Access Cheque account which showed numerous withdrawals at what appeared to be gaming venues over the period from 1 August 2016 to 2019.[13]
[12] Exhibit B.
[13] Exhibit C.
It was submitted that the combined value of the withdrawals from each of these accounts at gaming venues amounted to a total of $48,605 in the period from February 2016 to June 2019. It was further submitted that this equates to almost the total value of the wife’s pension and carer’s allowance over that period.
In cross examination about this issue, the wife strenuously denied that she gambled excessively. She maintained that she only gambled when she had money available. She conceded that she did go to Crown Casino with friends although she did not concede that she knew of or attended the N Hotel or another venue in Suburb O.
Counsel for the wife properly conceded that irrespective of the wife’s oral evidence in relation to this issue, the documents speak for themselves. They show that the wife withdrew money from her accounts at various gaming venues. It was submitted however, that what these statements do not show is what the money was spent on. Moreover, even accepting that some of that money was spent on gambling, it was submitted that the spending does not amount to wanton or wasteful conduct as required by the cases which refer to wastage or addbacks, or which would warrant consideration under section 75(2)(o) of the Act. Rather, it was submitted that everyone in a relationship has hobbies and interests. In this case, the wife enjoyed gambling. Her evidence was that she did gamble, however she did not gamble if there was no money available and she only did it when she had spare funds. I accept the wife’s submissions in this regard.
The only evidence given by the husband in relation to this issue is as follows:
I am aware that the Applicant has regularly used her funds for gambling including poker machines, bingo, and lottery tickets. There have been a number of occasions where she has asked me for money as she has lost her money gambling.[14]
[14] Affidavit of the husband sworn and filed 7 August 2019 at paragraph 18.
When viewed in the context of the other evidence given by the parties, including that the wife met the costs of the running of the household such as weekly grocery shopping and the like, as well as being able to send money to the Country L from time to time, there is insufficient evidence from which to conclude that the wife’s gambling, such as it was, ought to be taken into account in determining what is a just and equitable adjustment under section 79 of the Act.
The approach to applications under section 79
Section 79 of the Act gives the court the power to alter the property interests of the parties following the breakdown of their relationship.
It is well settled since Stanford v Stanford (2012) 247 CLR 108 (“Stanford”) that the proper approach to an application under section 79 of the Act, is as follows:
It will be recalled that section 79(2) provides that “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under this section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under section 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.[15]
[15] Stanford v Stanford (2012) 247 CLR 108 at [35].
The court went on to say:
The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to a marriage and whatever may have been their stated or unstated assumptions about property interests during the continuance of marriage.
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. … What order, if any, should then be made is determined by applying s 79(4) (footnotes omitted).[16]
[16] Stanford v Stanford (2012) 247 CLR 108 at [41]-[42].
In this case, both parties agree that the relationship has come to an end. Both parties also agree that some adjustment is appropriate under section 79. The dispute relates to the adjustment in percentage terms in the circumstances of this case.
Having regard to the principles in Stanford, I am satisfied that in all of the circumstances, it is just and equitable to make orders adjusting property matters between these parties on a final basis.
Having come to this view, in considering what orders ought to be made, the court must have regard to the following issues:
a)what are the assets and liabilities of the parties;
b)what assessment is to be made of the parties’ respective contributions, both financial and non-financial;
c)the effect of any proposed order on the income earning capacity of either party;
d)the section 75(2) factors, to the extent that they are relevant; and
e)and ultimately, having regard to all of these factors, what, if any, order is just and equitable.
The wife’s proposal at trial was that the assets of the parties be divided equally between them and that this be achieved by selling the B Street, Suburb C property.[17]
[17] Outline of case document filed on behalf of the wife on 28 August 2019 at page 6.
The husband’s proposal at trial was that the asset pool be divided in the proportions of 70% to the husband and 30% to the wife. The husband also sought an interim distribution of $100,000 to the wife within 7 days of the trial, pending the final determination of this matter. An order to that effect was made by consent of the parties on 30 August 2019.
Issues
The issues which arise for determination therefore are:
a)the assets and liabilities to be included in the pool and in particular, whether the wife has any property interests in the Country L which ought to be included;
b)contributions by each of the parties both at the commencement and during the relationship; and
c)section 75(2) factors.
Assets and liabilities
In large part, the parties agreed to the asset pool as follows:
Assets
Owner
Estimated Value
B Street, Suburb C
Husband
$1,350,000
P Bank account
Husband
$5,000
Commonwealth Bank account
Husband
$9,000
P Bank Term Deposit
Husband
$100,000
Westpac Life account
Wife
$1,223
Westpac Choice account
Wife
$1,063
ANZ account
Wife
Nominal
Motor Vehicle 2
Wife
$3,000
Motor Vehicle 1
Husband
$5,000
Total assets
$1,474,286
Liabilities
Owner
Estimated Value
Visa debit card
Husband
$500
ANZ Visa credit card
Wife
$428
Total liabilities
$928
TOTAL ASSET POOL
$1,473,358
For the reasons discussed above, the husband has not established to the requisite standard that the wife has an interest in any property in the Country L, or if she does, what the value of any such assets are. I have therefore not included any such assets in the pool.
Contributions
It is conceded that at the commencement of the relationship, the husband’s contribution comprised the B Street, Suburb C property, which was unencumbered and $100,000 which was placed in a term deposit. The wife’s contribution comprised approximately $30,000 in savings and the business. No evidence has been produced about the value of the business.
This however, is a long relationship. Although it is not the first relationship for either party, the parties were in a relationship for approximately 18 years. During that time, the parties jointly made decisions about where they lived, how they invested their money, how they supported their respective family and other matters.
It was submitted on behalf of the husband that the wife made no financial contributions to the B Street, Suburb C property which has increased in value over the course of the parties’ relationship, and therefore the husband’s initial significant contribution must be recognised in the final orders adjusting the parties’ property interests.
Similarly, the husband submitted that the sum of $100,000 received on his retirement in 1999 remains intact in the husband’s P Bank Term Deposit account.
It was also submitted on behalf of the husband that:
a)when one considers the nature of the assets which the husband brought to the relationship, namely the B Street, Suburb C property (being a larger than usual family home), the parties were given the opportunity to have boarders come and live with them who provided further income which was utilised by the parties; and
b)by providing a home in which the wife could have members of her family live with them, the wife derived some additional personal benefit which ought to be recognised as a further contribution made by the husband.
In addition to the provision of the B Street, Suburb C property, it was submitted that the husband also contributed the interest which accrued on the superannuation payout. I note that no evidence was led about this, either in terms of the quantum of the interest paid or how the interest was applied.
In essence, the husband’s case was that the parties’ contributions during the relationship were equal. The husband submitted that:
a)he performed work outside the home whilst the wife performed domestic duties within the home; and
b)any contribution by the wife during the relationship was counterbalanced by her gambling.
On behalf of the wife, it was submitted that the parties lived together as a married couple for 18 years, and in the context of a relationship of that duration, it is important to weigh the husband’s initial contribution together with the myriad of other contributions that each of the parties made during the relationship.[18]
[18] Jabour & Jabour [2019] FamCAFC 78 at [55].
The wife relied upon the reasoning of the Full Court of the Family Court in Jabour & Jabour [2019] FamCAFC 78 (“Jabour”), in which the court considered the weight to be given to an initial contribution by one party to a relationship when viewed in context of the myriad of other contributions made by the parties during the course of a long relationship. The wife submitted that for the same reasons as those articulated in Jabour, in a long relationship such as this, the husband’s initial contribution is but one of the contributions which must be weighed in the balance.
The husband conceded that the length of the relationship was significant. However, it was submitted on his behalf that the mere length of the relationship does not necessarily reduce the husband’s initial contribution to nothing.
Counsel for the husband submitted that the facts in this case are distinguishable from those in Jabour. It was suggested that a party’s initial contribution may be ‘reduced’ in circumstances where one party has taken on the role of primary carer in the relationship, and that party has therefore foregone income which otherwise would have been derived over the course of the relationship.
In this case, reliance was placed on the following agreed facts:
a)this was a second relationship for the husband and a third relationship for the wife; and
b)both parties were in receipt of a pension for much, if not all of their relationship.
I do not accept the husband’s submission in this regard. Each relationship is different and consequently, the nature of contributions made during the course of that relationship will also vary significantly. The parties’ contributions in the context of their relationship, including the husband’s initial contribution, must be weighed in balance with the myriad of other contributions made by each of the parties throughout their relationship.
Over the course of the parties’ long marriage, the parties made both direct and indirect financial and non-financial contributions for the benefit of their family. I do not accept the husband’s submission that the fact that these parties commenced their relationship later in life, at a time when they did not have children together and when they both had either finished working or were approaching retirement fundamentally changes the nature of those contributions. The contributions must be assessed in the context of the relationship between the parties themselves.
The inequity of the husband’s argument is evident from the following analysis. At the time of the trial, the B Street, Suburb C property was valued at $1,350,000, meaning there has been an increase over the life of the relationship of $1,000,000. There is no evidence before this court that there was any action or inaction taken by the husband which contributed to the increase in value of the B Street, Suburb C property which ought to be weighed in his favour in undertaking the balance required by section 79(4) of the Act. Further, there is no evidence upon which a distinction could be made between the contributions made by the husband or the wife during the relationship towards the ‘conservation or improvement of any of the property of the parties to the marriage or either of them’.[19]
[19] Family Law Act 1975 (Cth), s. 75(4)(a).
In looking at the financial implications of the husband’s case in this manner, I do not suggest that the exercise which the court must undertake is a mathematical one; it is not. However, it highlights the inequity of an assessment which, in effect, gives the husband total credit for the increase in value to the B Street, Suburb C property and assumes the wife’s conduct in supporting the husband and contributing to the relationship in a number of ways, receives no credit.
It was submitted on behalf of the husband that the parties’ contributions during the relationship was equal.[20]
[20] Transcript page 51 at lines 1 to 5.
On the other hand, the wife submitted that her contributions during the relationship were greater than the husband’s. She pointed to the fact that she continued to work and contribute financially to the relationship well after the husband retired and commenced receiving a pension. The wife gave evidence that her earnings were in the order of $10,000 to $15,000 per annum.
I note that the husband deposed to the following in relation to the wife’s business:
(The wife) did own a business in F Street, Suburb G. She continued to work from home in this business and as far as I am aware derived an income from her work. The Applicant continued to do her work at the B Street, Suburb C Residence from a dedicated room up until at least a few months ago.[21]
[21] Affidavit of the husband sworn and filed 7 August 2019 at paragraph 8.
The wife also pointed to the fact that she undertook the bulk of the domestic duties in the home during the relationship as further evidence of her greater contribution.
In the course of closing submissions, counsel for the husband made the following argument:
…In this case… it’s not like a young couple, he’s got a big house unencumbered, she stops work, they have two children, she doesn’t go back into the workforce for 15 years, comes back out earning 45, 50 grand, he’s on 200. Putting aside the 75(2) needs, she’s foregone a lot.
In that case, after 18 years, there would be a very good… argument that he would get little or nothing. …This case is one where it’s 18 years, significant initial contribution, but there hasn’t been much by way of contributions which go to offset that initial contribution because during the relationship, they still continued to contribute in different ways, but there’s nothing really startling in her contributions which go to reducing significantly his initial contributions. …time may be relevant, but the focus is on contributions to which… perhaps didn’t offset, but other contributions which will go to mitigate the impact of the initial contribution. And what I say in this case is… those contributions by (the wife)… are not as great as they would be in other cases where there’s been a significant reduction.[22] (T 91)
[22] Transcript page 91 at lines 2 to 19.
Counsel for the wife took issue with this submission. She said:
They’ve had 18 years together from their life and stage when they were… 18-20 years younger. So my client would have been 56, working in a business. And the husband was 64, ready to retire; ready to have his 65th birthday… and they have had their 18 years together. And over the course of those 18 years… they’ve just lived their lives as people with that age and stage of life do.[23]
[23] Transcript page 99 at lines 40 to 45.
There is some force to the wife’s submission. Whilst the nature of the contribution that a person makes when they have young children and potentially take time out of the workforce is different to that which they make when they are closer to retirement, the different nature of the contribution is not determinative of itself.
A marriage is a social and economic union. It is clear from the evidence in this case, and I find, that the parties made joint decisions throughout their relationship about both social and economic matters. The evidence is that at the commencement of their relationship, the wife was offered the opportunity to purchase the F Street, Suburb G property for $200,000. I accept the husband’s evidence that he did not prevent the wife from going through with this purchase. However, I find that the parties jointly decided not to pursue this opportunity on the basis that once the husband’s settlement with his first wife was concluded, they would have a family home to live in. They indeed did reside in that home for the duration of their married life; a period of 18 years.
I find that the parties made joint decisions throughout their relationship. The evidence is that they each assisted members of their respective families when required. They also made the B Street, Suburb C property available for boarders and the wife applied money from the boarders to meet the household expenses.
The valuer of the B Street, Suburb C property was not required for cross examination. Whilst the question of contribution is not a mathematical exercise, the historical valuation of the B Street, Suburb C property does give some indication of the increase in the B Street, Suburb C property’s value during the relationship.
The wife conceded that the husband brought the B Street, Suburb C property into the relationship, which was unencumbered and provided the parties with a home for the duration of their relationship.
That contribution, together with the wife’s contribution at the commencement of their relationship of some $30,000 however, must be weighed against the myriad of other contributions made by the parties during the course of their relationship. The wife lived in the B Street, Suburb C property, continued to run her business from there, organised the boarders, undertook the bulk of running of the household, paid for the bulk of the home expenses and continued to work from 2000 to 2015. During that period, she continued to earn a modest income which contributed to meeting those daily expenses.
The wife gave evidence that the income she generated was in the order of $10,000 to $15,000 and did not impact her pension entitlements. The court was invited to reject this evidence on the basis that she could not have earned that amount without impacting her pension. There was no evidence led about the maximum amount which the wife could earn before it affected her pension, nor what the effect would have been on her pension entitlements. On the basis of the evidence before me, I accept the wife’s evidence that she continued to earn between $10,000 and $15,000 from her business from 2000 to 2015.
In terms of expenses, I find that:
a)the husband met the costs of the council rates and general maintenance and repairs for the B Street, Suburb C property for the duration of the relationship; and
b)the wife met all other household expenses, including the costs of motor vehicle registration until recently, when the husband started to pay for insurance in respect of the B Street, Suburb C property.
I also find on the basis of the evidence that the wife organised the boarders which generated further income applied towards general household expenses.
To the extent that the husband sought to characterise the boarders living in the B Street, Suburb C property as a contribution on his part, I do not accept this submission. There is no evidence that the husband objected to the boarders living in the home. On the contrary, I am satisfied that this was an example of the parties making joint decisions in the context of their relationship. Whilst there is some evidence that the boarders looked after their own space, I find that the wife facilitated the boarders living in the B Street, Suburb C property and to the extent required, looked after them, including shopping and cooking for them.
It was also conceded by the wife that in addition to the B Street, Suburb C property, the husband also contributed $100,000 which he received on retirement and which has been kept for the duration of the relationship in a term deposit. I accept that any interest earned from those funds was applied for the benefit of the parties.
In the course of cross examination, it was suggested that the husband had an additional $65,000 in cash at the commencement of the relationship which was expended on various overseas holidays and the like. The evidence in relation to this was less than clear.
Importantly, there was no mention of this sum (a not insignificant amount in the circumstances) in the husband’s affidavit sworn and filed 7 August 2019. Similarly, the oral evidence given from the husband in relation to this ‘additional’ $65,000 was less than satisfactory.[24]
[24] See transcript at pages 45, 78 to 79.
There is insufficient evidence on which to find that the husband had an additional $65,000 at the commencement of the parties’ relationship.
For completeness, whilst I have found that the wife has engaged in some gambling during the course of her relationship, I accept her evidence that she only gambled when she had spare money. Whilst the bank statements produced for the period 2016 to 2019 show that the wife made withdrawals of money from ATMs at or near gambling institutions, there is no evidence as to how that money was spent.
More importantly however, it appears that other than the husband’s comment that on occasions, the wife asked him for funds as she had suffered losses gambling, there does not appear to be any general criticism that any gambling engaged in by the wife reduced her contributions during the relationship. On the contrary, as stated, the husband conceded that the wife paid the bulk of the bills, other than the council rates, did the majority of the grocery shopping for the family and boarders and undertook most home duties.
Contributions – Conclusions
On the totality of the evidence before me, I find that the parties’ contributions during the relationship were equal.
Having said that, I am satisfied that the husband contributed the B Street, Suburb C property at the commencement of the relationship and as such, his initial contributions were greater than that of the wife. However, when that initial contribution is weighed against the myriad of other contributions made by each of the parties during the parties’ long relationship, I find that an adjustment ought to be made of no more than 5% in the husband’s favour.
Section 75(2) factors
The husband submitted that in the particular circumstances of this case, the section 75(2) factors weigh in his favour. I will address each of the relevant section 75(2) factors in turn.
Age and state of health of each of the parties
The husband pointed to the wife’s current medical condition and poor prognosis. It was submitted that the evidence before the court suggests that she has, at best, months to live and therefore limited future needs.
By comparison, there is no evidence that the husband will not live for some years. Although he is 82 years of age and with some health issues, there is no evidence before the court as to how long he will live. However, nor is there any evidence before the court that the husband has any terminal health issues.
I accept that at trial, the wife had limited life expectancy of months at the most. Her condition had recently deteriorated resulting in her no longer being able to walk and being confined to a wheelchair. It was evident that she was struggling to give evidence and remain alert while doing so.
However, it was submitted on behalf of the wife that whilst she has a terminal illness, that is not determinative. It was further submitted that the wife has defied prognosis given as to her life expectancy in the past, and it is possible that this might occur again. Having said that, counsel for the wife conceded that the wife’s condition was such that she had a matter of months to live as at the date of trial.[25]
[25] Transcript page 99.
In Re Lawrie & Lawrie (1981) FLC 91-102, Fogarty J, in considering a not dissimilar fact situation, said:
It is appropriate and, in my view, necessary to consider the relative future just and equitable order under sec. 79. Where there is a significant disparity that would ordinarily be reflected in the orders. This is frequently a result in cases of a more usual type. Further, where in any case it is clearly established that the future financial needs of a party will terminate (or perhaps significantly diminish) upon the happening of a definite future event, it is proper to take that into account. A number of examples of that readily spring to mind. The weight to be given to that will obviously vary from case to case.[26]
[26] Re Lawrie & Lawrie (1981) FLC 91-102 at [61-750].
These comments were referred to with approval in Jurlina & Jurlina [2014] FamCA 284 at [127].
Financial resources of each of the parties and their capacity for gainful employment
Neither party has any capacity for gainful employment. Both parties receive the aged pension and neither has access to any other financial resources of any significance.
A standard of living that in all the circumstances is reasonable
The husband has given evidence, which I accept, that he will likely need to pay for a professional carer if his health deteriorates in the near future.
For her part, it was submitted that having left the B Street, Suburb C property, the wife needed to accommodate herself appropriately for the remainder of her life. At the time of trial, the wife was residing in a palliative care unit and, as stated above, had a limited life expectancy.
The husband is likely to require ongoing longer term housing. The proposed orders will allow the husband the opportunity to retain the B Street, Suburb C property if he is able, with assistance, to obtain funding to pay out the wife (or her estate).
The proposed orders also provide that if the husband is not able to do so, the B Street, Suburb C property will be sold and he will receive a sum which he will be able to put towards obtaining alternative accommodation. I accept that given the husband’s evidence that the B Street, Suburb C property is his family home and he would like to remain living there for the rest of his life, the latter option may not be palatable for him. However, he will have funds which can provide alternative accommodation for him.
The duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration
It was conceded by the husband that this is a long marriage. However, counsel for the husband submitted that this factor had to be weighed against the following facts:
a)this was a second marriage for the husband and a third marriage for the wife;
b)the parties married at a later stage in their lives, in the case of the husband when he retired from the workforce; and
c)the parties did not have any children together.
I have commented on the duration of the relationship and how that impacts on the weighing of the parties’ respective contributions above. There is no evidence that the duration of the relationship has impacted upon either party’s earning capacity.
Any other fact or circumstance
There are no other factors which need to be taken into account and which have not already been addressed.
Future needs – Conclusions
On the basis of the totality of the evidence before me, I find that the husband has greater future needs than the wife. The wife’s prognosis at trial was very poor.
The only evidence on this issue was the letter from an Oncology Registrar dated 14 May 2019, which stated that it was hoped that treatment she was then receiving would extend her life for a ‘few months’.[27]
[27] Affidavit of the wife sworn 7 and filed 8 July 2019 at annexure 1.
The wife sought to rely upon further correspondence referred to in the husband’s case outline document which stated that following mediation, the ‘wife’s lawyer provided medical evidence dated 15 August 2019 that the wife had received an updated medical prognosis and was expected to live a further 8-12 months only.’[28]
[28] Case outline document filed on behalf of the husband on 27 August 2019 at page 6.
At trial, counsel for the husband objected to reliance being placed on that statement and the correspondence referred to was not itself placed before the court.
Be that as it may, I am satisfied that the wife had a very poor prognosis at trial and a matter of months, at best, to live. By comparison, whilst aged 82 years and suffering from some health issues, the husband is not suffering from any terminal illness. He will require accommodation and potentially some additional care if he is to reside in the B Street, Suburb C property on his own. No evidence was led by the husband about what care might be required, the cost if any of such care, and the like.
I therefore find that further adjustment is required in the husband’s favour having regard to his future needs, such adjustment taking into account his age and his own state of health.
What order is just and equitable?
It was submitted on behalf of the husband that when one considers the husband’s significant initial contributions, the equal contributions made during the relationship and the greater 75(2) factors in the husband’s favour, a just and equitable order would see the wife receive 30% of the asset pool and the husband receiving 70%.
On the husband’s proposal, the wife would retain:
a)all money in her bank accounts;
b)her car;
c)the liability for her credit card debt; and
d)receive a payment of $437,000 (less the $100,000 interim payment made pursuant to the orders of 30 August 2019).
This would leave the husband with his pension and the option of refinancing the B Street, Suburb C property to remain living in it and service a payment of $337,000 to the wife.[29] The husband conceded that if the payment cannot be made within the timeframe stipulated in the orders, the B Street, Suburb C property would need to be sold. Based on the value of the B Street, Suburb C property at trial, the husband would retain equity in that property of over $1,000,000.
[29] Although no evidence was led from the husband about this nor was any evidence led from the husband’s son, counsel submitted that whilst the husband himself could not obtain the finance to pay out the wife and retain the former matrimonial home, his son could – see transcript page 83 at lines 16 to 19.
For the wife, it was submitted that a just and equitable order in this case would see a division of the assets of the parties on an equal basis.
Having regard to all of the evidence before me, the analysis of the section 79(4) factors including the 75(2) factors, I find that an order which would see the husband retain 60% of the asset pool is just and equitable in all of the circumstances. This takes into account both his initial contribution, when weighed against the myriad of other contributions of the parties during their long relationship, as well as the husband’s greater future needs.
On 30 August 2019, orders were made by consent of the parties for the sum of $100,000 to be paid to the wife from the term deposit by way of an interim distribution.[30] I have taken this interim distribution into account in adjusting the parties’ overall property interests.[31]
[30] Order 1 of the interim property orders made by consent on 30 August 2019.
[31] Notation A of the interim property orders made by consent on 30 August 2019.
The property adjustment between the parties has been calculated as follows:
Husband to retain
Value
B Street, Suburb C
$1,350,000
P Bank account
$5,000
Commonwealth Bank account
$9,000
Motor Vehicle 1
$5,000
Payment to wife
($484,485)
Visa debit card
($500)
Total – 60%
$884,015
Wife to retain
Value
Interim distribution
$100,000
Westpac Life account
$1,223
Westpac Choice account
$1,063
ANZ account
Nominal
Motor Vehicle 2
$3,000
Payment from husband
$484,485
ANZ Visa credit card
($428)
Total – 40%
$589,343
The orders provide for the B Street, Suburb C property to be sold in the event that the husband is unable to make the payment to the wife by the date. In recognising the limitations of conducting a sale in the current climate, I have given the parties liberty to apply with respect to the terms and conditions of the sale.
I make the orders as set out at the beginning of these written reasons for judgment.
I certify that the preceding one hundred and forty-three paragraphs are a true copy of the reasons for judgment of Judge Mercuri
Date: 2 April 2020
Key Legal Topics
Areas of Law
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Family Law
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Property Law
Legal Concepts
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Injunction
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Remedies
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Costs
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