Girum & Kabede
[2023] FedCFamC1F 728
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Girum & Kabede [2023] FedCFamC1F 728
File number(s): MLC 3674 of 2021 Judgment of: CARTER J Date of judgment: 25 August 2023 Catchwords: FAMILY LAW – PROPERTY – modest pool – assessment of contributions – assessment of s 75(2) factors – child with special needs – whether there should be a superannuation splitting order – determination that orders enabling the wife to retain the home were just and equitable Legislation: Family Law Act 1975 (Cth) ss 75, 79 Cases cited: Aleksovski v Aleksovski (1996) FLC 92-705
Bevanv Bevan (2013) 279 FLR 1
Dickons v Dickons (2012) 50 Fam LR 244
Kennon v Kennon (1997) FLC 92-757
Kowaliw & Kowaliw (1981) FLC 91-092
Mallet v Mallet (1984) 156 CLR 605
Stanford v Stanford (2012) 247 CLR 108
Division: Division 1 First Instance Number of paragraphs: 38 Date of hearing: 10 – 11 July 2023 Place: Melbourne Counsel for the Applicant: Cameron Allen Solicitor for the Applicant: MMH Lawyers Counsel for the Respondent: Timothy Byrne Solicitor for the Respondent: Shapra Lawyers ORDERS
MLC 3674 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR GIRUM
Applicant
AND: MS KABEDE
Respondent
ORDER MADE BY:
CARTER J
DATE OF ORDER:
25 AUGUST 2023
THE COURT ORDERS THAT:
B Street, Suburb C
1.Within 60 days of these orders the husband do all things necessary to transfer to the wife all his right, title and interest in the property located at B Street, Suburb C VIC (‘the real property’).
2.Contemporaneously with the transfer;
(a)the wife refinance any mortgage secured over the real property into her sole name; and
(b)the husband remove at his expense any caveat lodged by him or on his behalf with regard to the real property.
Personal Loan
3.The wife assume responsibility for, and indemnify the husband fully against, the joint personal loan of the parties as owed to the Commonwealth Bank (being loan number …53).
Collection of chattels
4.Within 14 days of these orders, the parties agree on a date and time for the husband’s nominee, or for the husband in the presence of Victoria Police to personally attend the real property to collect such of the following chattels as the wife is able to locate:
(a)the husband’s vocational certificates including the certificate acquired in Country D;
(b)the husband’s photo albums that he brought from Country F including all his sporting career photos and family photos of his adult children; and
(c)the husband’s shoes and clothes.
Property to be retained by the husband
5.The husband retain for his sole use and benefit to the exclusion of the wife all other assets, resources and liabilities in his sole name and possession including, but not limited to, the following:
(a)any monies in bank accounts in his sole name;
(b)any superannuation entitlements in his name;
(c)any motor vehicles in his name; and
(d)his personal effects and chattels in his possession.
Property to be retained by the wife
6.The wife retain for her sole use and benefit to the exclusion of the husband, all other assets, financial resources, and liabilities in her sole name including but not limited to the following:
(a)any monies in bank accounts in her sole name;
(b)any superannuation entitlements in her name;
(c)any motor vehicles in her name;
(d)her personal effects and the furniture and chattels in her possession save for the husband’s chattels listed in Order 4.
Miscellaneous
7.Unless otherwise specified in these orders and save for the purpose 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 property (including choses-in-action) owned by or in the possession of such party as at the date of these orders;
(b)each party forego any further claims they may have to any superannuation benefits belonging to or earned by the other;
(c)insurance policies remain the sole property of the owner named therein;
(d)cash in any joint accounts be divided equally between the parties;
(e)any monies or liabilities held in any bank or credit accounts remain the sole property of owner in whose name the accounts are held;
(f)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(g)each party remain responsible for any debts in that party’s name; and
(h)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.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUSTICE CARTER
ISSUES IN DISPUTE
The parties were able to reach an agreement about the parenting of the parties’ six children. Consent orders were made on the first day of the hearing pursuant to which the mother has sole parental responsibility for the parties’ children, who will remain in her care. The older children are to spend time and communicate with the father pursuant to their wishes. There were no orders for the younger children to spend time with their father, but he is at liberty to send the children cards, letters and gifts.
The parties were also able to reach an agreement that the wife retain the former matrimonial home, B Street, Suburb C Victoria, and that title of the property be transferred into the wife’s sole name. They also agreed that the wife assume responsibility for the joint personal loan of the parties owed to Commonwealth Bank.
The parties were not able to agree whether there would be any further adjustment to achieve an appropriate division of the parties’ assets and liabilities on the basis of the parties’ respective contributions and needs.
THE EVIDENCE
The wife relied on her trial affidavit and Financial Statement filed 2 July 2023.
The husband relied on his trial affidavit and Financial Statement filed 4 July 2023.
Each party gave brief evidence, with the assistance of an interpreter. Both gave their evidence in a straightforward manner and appeared to answer questions directly. The husband in particular made appropriate concessions.
THE ASSET POOL
The parties were able to agree the asset pool comprised as follows:
B Street, Suburb C, Victoria - Owned jointly
$575,000
Motor vehicle – wife
$2,500
Bank account – husband
$20,000
Bank account – wife
$1,200
TOTAL GROSS ASSETS
$598,700
LIABILITIES
Mortgage – Commonwealth Bank of Australia
($369,678)
Joint personal loan
($20,000)
TOTAL LIABILITIES
($389,678)
NET TANGIBLE ASSET POOL
$209,022
Husband’s superannuation entitlements
$81,713
Wife’s superannuation entitlements
$2,000
TOTAL SUPERANNUATION
$83,713
NET POOL INCLUSIVE OF SUPERANNUATION
$292,735
Whilst there was some suggestion from the husband that he did not know about the procurement of the personal loan taken out in around 2015, it was conceded that there was no evidence to suggest the funds were used other than for the benefit of the family unit. In those circumstances, it was further agreed that the loan would be included in the pool as a joint liability. As indicated, the wife has agreed she will continue to be responsible for the repayment of that loan, as she has been doing to date.
IS IT JUST AND EQUITABLE TO MAKE AN ORDER?
Prior to making any order that alters parties’ interests in property, I must be satisfied that it is just and equitable that such an order be made: Stanford v Stanford (2012) 247 CLR 108. There is no presumption that parties’ existing entitlements should be altered, or that one party has the right to have the parties’ property divided between them only on the basis of the considerations in s 79(4).
If I am satisfied it is just and equitable for an order to be made, I am then empowered to make such order as I consider appropriate taking into account a number of factors as set out in s 79(4) and 75(2) of the Family Law Act 1975 (Cth), insofar as they are relevant.
The parties both agree it is just and equitable that an order be made. I agree. In my view this is one of the “vast majority of cases” referred to by the plurality of the Full Court in Bevanv Bevan (2013) 279 FLR 1 at [164] in which the requirements of s 79(2) of the Family Law Act are fairly readily satisfied. If no adjustment is made, there could be no consideration as to the parties’ circumstances, including the wife’s primary care and support of the parties’ six children. In my view, it is plainly just and equitable to make an order pursuant to s 79 of the Family Law Act in these proceedings for a division of property between the parties.
THE PARTIES’ PROPOSALS
It was the husband’s case that the wife should pay him the sum of $19,304, and that each party otherwise retain their assets and superannuation. Counsel for the husband submitted that resulted in the wife retaining a little over 62% of the asset pool, on the assumption that the equity in the home was $210,000. However, on the pool as set out, this proposal equates to the wife receiving approximately 59% of the pool, and the husband 41%. On his proposal, the husband would receive or retain about 19% of the tangible pool, and almost the entire superannuation pool.
It was the wife’s case that there be no further cash adjustment to the husband, and that there be a superannuation splitting order using a base rate of $39,000 from the husband’s superannuation entitlements to her. That equates to her receiving approximately 78.5% of the total pool and him 21.5%. On her proposal the husband would retain less than 10% of the tangible pool, with an equal division of superannuation entitlements.
SECTION 79(4) OF THE ACT
In determining what orders are to be made pursuant to s 79(4) of the Family Law Act, I must weigh and assess all the contributions made by the parties throughout their relationship, post separation, and somehow give a reasonable value to all the disparate elements that go to making up the entire relationship: Aleksovski v Aleksovski (1996) FLC 92-705 at 83,443.
This is not a mathematical exercise, and instead requires an holistic assessment; Dickons v Dickons (2012) 50 Fam LR 244 at [21] and [25]. There is no presumption of equality of division of the pool, even in long relationships. The contributions of each party must be assessed on the particular facts of each particular case; Mallet v Mallet (1984) 156 CLR 605.
Contributions during the marriage
Neither party had assets of significance at the commencement of the relationship.
I am satisfied that over the course of their relationship from 1996 until separation in June 2018 the parties’ contributions were approximately equal. The husband worked in paid employment, and as the primary breadwinner, generated an income to support the wife and children. The wife worked primarily as homemaker and parent for the parties’ six children. She also worked in paid employment at times during the marriage. The parties both applied any income they generated to the wellbeing of the family. The deposit to purchase the former matrimonial home accumulated during the relationship, from the parties’ hard work.
Counsel for the wife sensibly conceded there was insufficient evidence in his client’s affidavit material to provide a foundation for a Kennon argument (Kennon v Kennon (1997) FLC 92‑757).
Contributions post-separation
There is some dispute regarding contributions post separation. Part of that dispute relates to an incident which occurred in June 2018, being the date of separation. At that time, a vehicle the husband was driving crashed into the former matrimonial home, causing substantial damage. The wife was in the front bedroom with some of the children at that time.
The police were called to the home and conducted an investigation. Ultimately, the husband was charged with an infringement. No criminal charges were laid. The wife and children moved into rental accommodation at that time. About four months after the accident, the wife received around $12,000 from the home insurance claim. Her evidence is that a modest amount of that claim was used to effect temporary repairs on the Suburb C property, but that most of the funds were used to house her and the children elsewhere in rental accommodation for a period. She and the children returned to live in the Suburb C property about six months later. The damage caused to the property in June 2018 has only been temporarily repaired. I note the husband asserted the wife used at least part of the insurance monies to fund an overseas holiday for herself and the children, which was denied by the wife.
It was the wife’s evidence that the husband deliberately and repeatedly drove into the house, in what she said was an attempt to kill her. It was the wife’s contention that the husband’s actions that day, whether deliberate or reckless, damaged the property and reduced the value of the former matrimonial home. She said that should be treated as wastage by the husband. Her counsel referred to the case of Kowaliw & Kowaliw (1981) FLC 91-092. The Court in that matter determined that losses incurred by one party are generally to be shared by the parties, save where one party has embarked on a course of conduct aimed to reduce the matrimonial pool, or where one party has acted recklessly, negligently or wantonly such that the pool has been reduced.
The husband objected to that approach. He said the incident was an accident, and occurred in circumstances where he had been working long hours, had consumed some alcohol and fallen asleep in the car.
Whilst it is plain that substantial damage had been caused to the property, I was not provided with any evidence as to:
(a)what impact the damage had on the value of the property; or
(b)the costs of repairing the damage.
In the absence of that evidence, it is impossible to quantify the loss the wife asserted to the value of the pool. It does appear from the photographs provided that there would need to be quite a large amount of work to repair and restore the property.
Having heard the parties’ evidence about that evening, and in circumstances where there was a police investigation and the husband was not charged with any offences more serious than an infringement, I am not prepared to find that the husband deliberately damaged the home. I was more inclined to accept the husband’s evidence, that this was an accident. In those circumstances, I do not regard it as appropriate to make an adjustment in favour of the wife on the basis of the damage done to the home, particularly in circumstances where the wife has also had the benefit of a modest insurance claim being paid to her.
I am satisfied, however that the wife’s post separation contributions otherwise outweigh those made by the husband. She has had the sole care of the children since separation. The husband did pay the mortgage until May 2020, but did so in lieu of paying child support.
The wife has paid all outgoings and the mortgage on the property since May 2020. She has also made all repayments towards the parties’ joint personal loan. The wife has continued to meet the vast majority of the children’s expenses post separation. The husband conceded he had not provided the wife with any additional contributions towards, for instance, V’s medical and allied health professional costs beyond the very modest child support he now pays.
The husband also travelled to Country F for three months in 2023. He said he spent approximately $8,000 on that travel.
RELEVANT CONSIDERATIONS PURSUANT TO SECTION 75(2) OF THE ACT
The wife is 47 years old. She works as an allied health professional, and earns $36,000 per annum through that employment. She has the benefit of monies though Centrelink, together with modest child support. She currently works three days per week. Her ability to earn is necessarily impacted by her obligation to care for the parties’ children.
The husband is 60 years old. He works in security, and is able to work full time. Three payslips were tendered, which indicated he earns around $67,000 per year. Clearly, his income earning capacity exceeds that of the wife. However, he is older than she, and close to retirement age. That of course means he will be able to access his superannuation entitlements sooner than the wife will be able to do. He does not have the care of any of the parties’ children. He is paying child support as assessed, but it is common ground that that does not come close to meeting the costs of housing, clothing, feeding, entertaining, and otherwise caring for the children. I did not have a copy of the assessment, and there is some dispute in the material as to the quantum. As best as I can tell, the husband is paying approximately $150 per week (equating to $3.60 per day per child).
V has significant special needs. I was not provided with any evidence as to what actual costs the wife must meet in providing appropriate care for him, but it is reasonable to assume there must be some out of pocket expenses in relation to medical and allied health professional appointments, medical equipment and the like.
The wife also deposed that the twins have some behavioural issues, which may require therapeutic interventions. Additionally, the mother’s evidence is she has needed to arrange private tuition for some of the children in various subjects.
It is difficult to create a reasonable standard of living for both of the parties given the modest financial circumstances.
ASSESSMENT OF CONTRIBUTIONS AND PROSPECTIVE NEEDS
I am satisfied that the parties both worked hard during the marriage, and contributed approximately equally, substantially in different spheres. Post separation, the wife’s contributions outweigh those made by the husband over the last five years for the reasons outlined. In terms of contributions, I assess the parties’ respective contributions overall as being 53/47 in favour of the wife.
The parties agree that the considerations pursuant to s 75(2) of the Family Law Act favour the wife. I note that in matters where the pool available for distribution is modest, the parties’ prospective needs may be more critical. The wife has a lower income earning capacity than the husband. She also has the sole care of the parties’ six children. Although she is younger than the husband, her ability to increase her income is necessarily impacted upon by the demands on her time in providing care for the children. V requires significant care. The twins are not yet seven years old. The wife has many years of providing primary care ahead of her. I am satisfied that a further adjustment in favour of the wife of 12% is appropriate, such that she should receive 65% of the pool, and the husband 35%.
In my view, an appropriate division of the asset pool is that the wife retain the home, the mortgage on the home, responsibility for the personal loan and the assets and superannuation otherwise in her control. That would leave her with 65% of the pool, with the bulk of her entitlements comprising the equity in the home.
The husband will retain his cash savings together with his superannuation entitlements. That equates to about 35% of the asset pool. Most of his entitlements are made up from his superannuation.
I am satisfied these orders are just and equitable:
(a)the pool is very modest. In the context of an extremely modest pool, percentage considerations are often not of great assistance. The Court is instead to consider the implications for the parties in terms of the dollars to be received;
(b)these orders enable the wife and children to remain living in the former matrimonial home, which both parties have identified as being an appropriate outcome;
(c)I have not ordered a cash payment by the wife to the husband as I do not have any evidence that the wife has the capacity to borrow more funds in order to effect a payment to the husband. If I required her to make a payment to the husband, and she could not borrow sufficient funds over and above the mortgage to make such a payment, she may be unable to retain the property despite the parties both agreeing it is appropriate she be able to do so; and
(d)my orders do mean the husband has no access to cash or other assets now, save for the $20,000 he has in savings. I note, however, the husband is 60 years old. He is just five years away from being able to access his superannuation entitlements.
For all of the foregoing reasons, I make the orders as are set out.
I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carter. Associate:
Dated: 25 August 2023
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