Griffiths & Griffiths

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SMYTHE & SMYTHE

[2007] FMCAfam 143

FAMILY LAW – Property settlement – continuation of proceedings after death of spouse – assessment of surviving spouse’s future needs.

Family Law Act 1975, ss.79(1), (2), (4), (8), 75(2)

Hickey & Hickey; A-G for Commonwealth (Intervener) [2003] FamCA 395, (2003) FLC 93-143, (2003) 30 Fam LR 355
C & C [2005] FamCA 429, (2005) 33 Fam LR 414, (2005) FLC 93-220
Parrott v Public Trustee of NSW (1993) 17 Fam LR 785, (1994) FLC 92-473
Tasmanian Trustees Ltd v Gleeson (1990) 14 Fam LR 189, (1990) FLC 92-156
Menzies v Evans (1988) 12 Fam LR 519, (1988) FLC 91-969
Ford v Marchant [2001] FamCA 1585 unreported 7 December 2001

Applicant:

MS SMYTHE

Respondent:	MR SMYTHE
For the estate of the late P Smythe

File number:

PAM2143 of 2005

Judgment of:

Halligan FM

Hearing dates:

15 & 16 February 2007

Date of last submission:

16 February 2007

Delivered at:

Parramatta

Delivered on:

16 March 2007

REPRESENTATION

Counsel for the Applicant:

Mr Shaw

Solicitors for the Applicant:

Marina Voncina Solicitors

Counsel for the Respondent:

Mr Thistleton

Solicitors for the Respondent:

K W Fegebank and Associates

ORDERS

The wife shall within 8 weeks pay to the respondent as legal personal representative of the deceased husband the sum of $20,000 (the sum).
On payment of the sum in accordance with order (1), the wife is declared as between her and the estate of the deceased husband to be the sole legal and beneficial owner of the property at Property E, New South Wales being the land in Folio Identifier [omitted] (the former matrimonial home).
If the wife does not pay the sum in accordance with Order (1), then the wife shall do all things and sign all documents necessary to sell the former matrimonial home and to cause the net proceeds of sale, after payment of agents commission and other costs of sale, to be paid as to 4.4% to the respondent as legal personal representative of the deceased husband and as to the balance to herself.
Otherwise the wife is solely entitled as between her and the estate of the deceased husband to all other property in her possession or control.

IT IS NOTED that publication of this judgment under the pseudonym Smythe & Smythe is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PARRAMATTA

PAM2143 OF 2005

MS SMYTHE

Applicant

And

MR SMYTHE

Respondent

REASONS FOR JUDGMENT

Introduction

These are property settlement proceedings under s.79 of the Family Law Act 1975. The wife seeks a declaration that she is solely entitled to the former matrimonial home at [E], its contents, her superannuation interest, and all other property in her possession, and that the estate of the deceased husband is solely entitled to all property “in the Estate’s possession, control or disposition”.
The deceased husband's elder son and legal personal representative, Mr Smythe (the respondent), was, by order made on 13 December 2005, substituted for the deceased husband in the proceedings. The respondent seeks that the former matrimonial home be sold and the proceeds divided equally between the parties, that the contents of the home be equally divided between the parties, and that a motor vehicle in the wife's possession be sold and the proceeds equally divided between the parties.
The husband was born in October 1948, and died of gunshot wounds in the Philippines in October 2005, [shortly] before his 57^th birthday. His death occurred after the institution of these proceedings by the wife and the filing of the husband's response, financial statement and affidavit.
The wife was born in April 1945 and is aged 61. The parties commenced cohabitation in early 1984, married in August 1992, and finally separated in October 2004.
There are no children of the marriage. The wife has 4 children of a prior marriage, and the husband has 2 sons of a prior marriage, the respondent and T Smythe.

The evidence

The witnesses in the wife's case are the wife, Mr E and Mr M. Despite being required for cross-examination, neither Mr E nor Mr M was made available for cross-examination. In the Respondent’s case, the witnesses were the deceased husband through an affidavit and financial statement he swore in the proceedings before his death, the respondent, and T Smythe. T Smythe was not required for cross-examination.
The wife said the parties commenced cohabitation in early 1984. The husband was paying child maintenance to his first wife for his 2 sons. The husband said in his affidavit sworn shortly before his death that cohabitation commenced in 1985. Little turns on this difference.
The wife said the husband entered into a property settlement with his first wife, under which he received $50,000, which he used, together with some borrowed funds and $5,000 she provided, to buy a property at [S] in his sole name. The husband said in his affidavit that he received $40,000 under the property settlement, that he used it to buy vacant land at [S], and that with borrowings of $65,000, built a house on the land. He says the parties occupied the new home in 1988.
The wife said she had been working for the one employer for 13 years, and when this employment was terminated, about 12 months after cohabitation commenced, she received $25,000, $5,000 of which she gave to the husband to contribute to the purchase of the [S] property. She says the balance of these funds was contributed towards “the family’s needs”. The wife was not challenged on this evidence, and I accept it.
There is no evidence any of the parties’ respective children lived with them during cohabitation.
The wife says that in the 1990’s she returned to work, and contributed her earnings to the marriage. I infer she returned to work in the early 1990’s, based on her evidence of the duration of her employment with 3 employers since returning to work. It seems that the wife was not in the paid workforce from about 1985 until the early 1990’s.
In 1990, the wife's father passed away. The wife was the sole beneficiary under his will. Under his will, she inherited a property at [E] subject to a mortgage, and cash at bank. The inventory of property forming part of the Probate of her father's will values the [E] property at $150,000, and the cash at bank funds at $9,101.49.
The wife says that in the mid 1990’s, the husband sold the [S] property for $185,000, receiving about $130,000 net. She says the husband discharged the mortgage on the [E] property with a payment of $61,000 from the proceeds of sale of [S], and paid a further $40,000 from the proceeds towards extensions and renovations to the [E] property. In 1997, the husband also bought a Ford Mondeo motor vehicle for $24,000 using the proceeds of sale of the [S] property.
The evidence of the husband in his affidavit is that he sold the [S] property and the parties moved into the [E] property before the wife's father's death, inferentially so the wife could care for her father, but that the wife's father died within a few weeks of the husband and wife moving in. The husband's affidavit evidence is that he received $170,000 net proceeds of sale from [S]. The husband's affidavit evidence is that the wife had 2 siblings who were not mentioned in their father's will and were unhappy about this, resulting in ill feeling within the wife's family. He said he paid $8,000 to each of the wife's siblings, a total of $16,000, from the proceeds of sale of [S] to assuage the ill feeling. The wife denied any such payments were made to her siblings from the proceeds of [S]. Rather, she says the money in her father's bank account was used to pay $4,000 to each of her siblings.
Otherwise, the husband said he applied the proceeds of sale of [S] as to $31,000 to discharge the mortgage on the [E] home, $27,000 to discharge a personal loan the wife's father had, $24,000 to buy a new car, and $7,000 to the estate agent. He also said he spent $60,000 on the extensions to the [E] home.
Thus, in relation to the wife's father's estate and her inheritance, the gross value of the estate was approximately $159,000. The wife says there was a mortgage on [E] of $61,000, and $8,000 was paid to her siblings, which would give a net benefit to the wife from her inheritance of $90,000. The husband says there was a mortgage of $31,000, a personal loan of $27,000, and $16,000 was paid to the wife's siblings, which would give a net benefit to the wife of $85,000. Having heard the wife's evidence in cross-examination, I accept her evidence and find that the net value of the inheritance she received in about 1990 was in the order of $90,000.
The wife says that in 1999 she and the husband bought a caravan and annex at [H] for $16,000, using funds borrowed from a financial institution.
The wife says the parties initially separated in January 2003 when the husband left the former matrimonial home. During this initial separation, the husband met the wife's car repayments. The wife met the outgoings on [E].
In about October 2004, the husband returned to the former matrimonial home, to test the waters for a possible reconciliation it seems, and after 2 weeks left to attend a [omitted] in the Philippines. He returned again to the former matrimonial home on 28 November 2004, and left for the last time in January 2005. At this time, he travelled to [H] to repair hail damage to the caravan and annex, and thereafter travelled to the Philippines where he lived until his death.
The husband left his employment and, in February 2005, received a total of $53,618.05 on the termination of his employment, of which $51,789.84 represented his superannuation. There is no evidence of the period of the husband's employment.
At or shortly before travelling to the Philippines to live, the husband owned the Ford Mondeo motor vehicle and a motor cycle he had bought in early 2004 for approximately $10,000. The husband, in his financial statement sworn on 30 September 2005, discloses owning a half interest in the motor vehicle, but does not refer to the motor cycle.
T Smythe says that he purchased the motor cycle from his father for $3,500, the motor cycle having been damaged when his father dropped the bike on the road. He gives no evidence of the nature of the damage. The respondent also says the bike was damaged when the husband dropped it on the road, but he too gives no evidence of the damage to the bike. T Smythe says he paid his father 3 instalments of $1,000, and paid $500 to solicitors on his father's behalf for preparation and execution of his father's will, power of attorney and enduring guardianship, signed on 22 August 2005.
The wife says that the motor cycle only sustained a small scratch near the exhaust when the husband dropped it going over a gutter at very low speed. There is no direct evidence of the value of the motor bike. There is no independent evidence of the condition of the bike after the husband dropped it, and neither the wife nor T Smythe were cross-examination on this point. In the absence of expert evidence of the value of the bike, I cannot determine its value, and could not find the husband sold it for less than its true value. I proceed on the basis it was worth $3,500, it was sold by the husband to T Smythe, and that, to the extent T Smythe paid money to the husband, it was represented by the moneys in the husband's bank accounts.
In about March 2005, the husband sold the caravan and annex for $17,000, which was divided equally between the parties.
The wife works in a [omitted], earning approximately $590 per week. She describes herself variously as a [occupation omitted]. She lives alone in the former matrimonial home. Her fixed commitments of tax, rates, motor vehicle registration and credit card payments total $400 per week, leaving her $190 per week for all her other commitments, such as feeding and clothing herself, paying utilities such as phone and electricity, meeting her motor vehicle running costs, and providing for her health care and her recreation. She has no surplus from her income after meeting her expenses.
The wife says she has made enquiries as to her borrowing capacity, and has been advised by a credit union they would approve a loan of $15,125, and by a bank they would lend her $20,000 secured on the former matrimonial home. These enquiries were last made 10 months ago.
In his financial statement sworn shortly before his death, the husband said his income comprised an unemployment benefit of $100 per week, and his fixed expenses were nil. He disclosed $51,000 in unspecified bank accounts, and $17,500 in household contents. He had not debts. As mentioned, he disclosed a half interest in the Ford Mondeo, worth $1,500, without disclosing who held the remaining interest in the vehicle. He stated he was the sole registered owner. Because of the similar way he disclosed a half interest in the Kia Rio motor vehicle in the wife's possession, indicating the wife as the sole registered owner, I find that the inference to be drawn from his financial statement is that the wife held the other half interest in the Ford Mondeo.
However, the evidence of the respondent is that he bought the Ford Mondeo from the husband in October 2004 for $1200 cash in hand. There is thus a direct conflict in the evidence in the respondent’s case, between his evidence and the evidence of his father. I prefer the husband's evidence, and find that the husband and wife owned the Ford Mondeo at the time of the husband's death. In the absence of any better evidence of its value, I find it was worth $3,000.

Extensions to former matrimonial home

There is significant issue about the amount of work the husband did personally on extensions to the [E] property carried out in about 1995 to 1997. The extensions and renovations were substantial. There seems to be no ultimate issue that tradesmen performed some of the work.
The wife concedes the husband performed some of the work himself, assisted tradesmen on occasions, and performed other work assisted by members of her extended family. She also says some work was performed by tradesmen alone, and some by members of her extended family who worked in the building industry. Witnesses who swore affidavits to corroborate aspects of her evidence on these issues were not made available for cross-examination, and I cannot accept their evidence where it differs from evidence of the husband's sons where I otherwise accept that evidence. Other persons who could have corroborated her evidence, such as members of her extended family, were not called as witnesses in her case, and there is no explanation why they were not called. This leads to an inference that their evidence would not have assisted the wife's case.
The husband, in his affidavit filed shortly before his death, said in relation to the extensions to [E] that he “did all the work myself”. The husband's sons say that the husband personally carried out a large range of tasks on the extensions to the [E] property. The son’s assertions, and inferentially their father's too, apparently are not meant to be taken literally, as the works it is claimed the husband did “personally” include tasks which only a tradesman could perform, and it is apparently conceded by the respondent that tradesmen did perform some of this work. It also includes some tasks which the respondent says he assisted his father with, so that the husband did not perform these tasks alone.
Not only that, but there is conflict between the husband's affidavit evidence and the evidence of both his sons. The husband says he was exhausted by the time he finished the work on extending [E] “since I had to do it myself without any help”. One point where the evidence in the wife's case and the evidence of both the husband's sons is consistent is that the husband did not do all the work himself without any help.
Further, while T Smythe was not required for cross-examination, his evidence on these issues was brief in the extreme. He simply agrees with what his brother says in his affidavit, and asserts that “whenever possible” he too helped his father on weekends to do the work on the [E] property, and estimates he spent 30 weekends doing the work. Both sons thus make the same mistake as to when the work was done and when it was that they spent their time assisting their father,

Mr Smythe saying the work was done over an 18 month period in 2001 and 2002, and T Smythe saying he had read his brother’s affidavit and agreed with what he said about the work the husband did on the extensions, without demurring from the suggested date. The work in fact was done 3 to 4 years earlier, between 1997 and 1999.
The wife was cross-examined at length about the work done by the husband on the extensions. I was impressed by the comprehensive detail in the answers she gave, and by the fact that she readily acknowledged work done by the husband, saying he did the work he was able to do, including assisting tradesmen, and conceding the husband did all he could to improve the home and make it more comfortable for them both.
In contrast, when challenged in relation to detail, the respondent tended to retreat to generalisations. On occasions the respondent was either wrong or demonstrated a tendency to hyperbole. For example, he asserted that his father “personally” attended to specified work, but elsewhere in his evidence said others, including himself, assisted the husband. He also asserted the husband “personally” painted the [E] house “inside and out”, but conceded in cross-examination that the only outside painting was of some new decking, as the house had cladding which was not painted. In stark contrast to the wife's evidence, the respondent did not demonstrate the knowledge of detail one would expect him to have had he assisted his father to the extent he said he did. I was more impressed by the wife's evidence than the respondent’s, and tend to prefer her evidence to his. Nonetheless, and on any view of the evidence, the husband made a substantial and significant contribution to this work through his own labour, sometimes alone, sometimes assisting tradesmen, and sometimes assisted by others.

The applicable law

Property settlement proceedings under the Family Law Act are principally governed by s.79(1), (2) and (4), and, under s.79(4)(e), by

s.75(2). Following the husband's death, these proceedings are also subject to s.79(8).

Section 79(8)

Under s.79(8), where a party to a marriage dies while property settlement proceedings are on foot, the proceedings may be continued by or against the legal personal representative of the deceased party, and if the court is of the opinion that it would have made an order in respect of property if the deceased had not died and that it is still appropriate to make an order with respect to property, the court may make a property settlement order.
By order made on 13 December 2005, the court ordered that the respondent be substituted for the deceased husband as a party to the proceedings and that the property settlement proceedings before the court continue. Before me, it was submitted on behalf of the respondent that having regard to the long period of cohabitation, the significant contributions of the parties and the fact title to the matrimonial home was in the wife's sole name, the court would have made an order in the proceedings if the husband had not died. It was further submitted on behalf of the respondent that it remained appropriate for the court to make an order, as the court should not wholly deprive the husband's estate of his contribution based entitlement to the property.
While the wife sought orders the effect of which would be to leave the title to property unaltered without any payment by one party to the other, nothing was put on her behalf in relation to s.79(8).
I am satisfied that had the husband not died, the court would have made a property settlement order in these proceedings, for the reasons advanced on behalf of the respondent. Whether it is still appropriate to make an order falls to be determined having regard to the relevant considerations in ss.79(4) and 75(2). As explained later in these reasons, I am satisfied it is still appropriate to make an order.

General principles

In Hickey & Hickey; A-G for Commonwealth (Intervener), [2003] FamCA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355, the Full Court (Nicholson CJ, Ellis & O’Ryan JJ) explained the preferred approach in determining property settlement proceedings under s.79, as follows (FamCA at [39]; FLC at 78,386; Fam LR at 370):
“The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEJ and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.”

The assets and liabilities

The parties agree the [E] property is worth $460,000 and is unencumbered. The wife's motor vehicle is agreed at $3,000, the wife's household contents at $10,000, the wife's savings at $1,200, and the wife's jewellery at $700. The wife also seeks to include the value of the Ford Mondeo motor vehicle, and the amount of $51,000, being the savings disclosed in the husband's financial statement sworn shortly before his death. The respondent disputes these inclusions and says the husband's savings forming part of his estate in fact amount to $31,000, which amount should be brought to account in the pool of divisible assets.
I have already found that the husband owned the Ford Mondeo at his death and it was worth $3,000. It should therefore be brought to account in the pool of divisible assets.
In relation to the husband's savings, there is no explanation for the discrepancy between the husband's financial statement, sworn by him a few weeks before his death, and the assets in the estate as asserted by the respondent. The difference is significant, $20,000.
It is suggested on behalf of the respondent that the financial statement must be wrong. But there is no evidence to suggest this is so. In relation to the savings, the husband does not disclose any bank account details as required in his financial statement. The letter from the Commonwealth Bank the respondent obtained giving details of moneys held by that bank for his father does not establish there are no other moneys. There is no evidence as to the husband's usual banking practice, and I cannot proceed on the basis he could not have had accounts in more than one bank, and perhaps in more than one country, he having moved to live indefinitely in the Philippines.
In the absence of any basis for disregarding the husband's evidence as to his savings, I accept the evidence contained in the husband's financial statement, and find that the amount of savings to be included in the pool of divisible assets is $51,000.
The wife discloses credit card debts of $9,000. They arose after separation. Otherwise there is no evidence about them, and certainly no evidence they were incurred in relation to extravagant or unreasonable expenditure by the wife. Accordingly, I intend to adopt the usual practice of taking the parties’ assets and liabilities as at the hearing and will include them in the pool of divisible assets.
The wife has a superannuation interest in the growth phase with an agreed value of $23,771. It is agreed it is appropriate to include the superannuation interest in a single pool of assets. While the Full Court in C & C, [2005] FamCA 429, (2005) 33 Fam LR 414, (2005) FLC 93-220 indicated that the preferred approach, whether a splitting order is sought or not, is to treat superannuation separately from non-superannuation assets, the court had a discretion to include superannuation in a single pool of divisible assets. Because of the relatively modest value of the wife's superannuation interest in relation to the asset pool and the parties’ common position that the superannuation should be included in a single pool, I will include it in a single pool of divisible assets.
I therefore find that the pool of divisible assets is:

Assessment of contributions (s 79(4)(a) to (c)

The husband contributed the property settlement he received early in the parties’ cohabitation of $40,000, applying it to the purchase of the property which was the parties’ matrimonial home for about 10 years or so. The wife contributed her redundancy payment of $25,000 within about the first year of cohabitation, a payment attributable to about

13 years’ employment, all but 1 year of which preceded cohabitation. The wife contributed her inheritance of a house and a small amount of cash, with a net value of about $90,000. This home was extensively renovated and improved, both with funds from the sale of the first home, and through a significant amount of work done by the husband. While these extensions were paid for from the proceeds of sale of the first home, to which the husband contributed his property settlement, the wife too made a contribution to this property, both in the $5,000 I am satisfied she contributed to its acquisition from her redundancy money, from her income from the early 1990’s, and from her homemaker contributions.
The husband appears to have worked throughout the parties’ cohabitation, and there is no suggestion he failed to contribution his income to the household, apart from the child maintenance he was paying for his children at the commencement of cohabitation. There is no evidence of the amount of child maintenance he paid, or how long the husband continued to make maintenance payments after cohabitation commenced. The wife worked for about the first year of cohabitation, and then from the early 1990’s. Again there is no suggestion she failed to contribute her income to the household. But the wife was not in paid employment for about 5 or 6 years.
It is submitted on behalf of the wife that contributions should be assessed as favouring her in the proportions 60/40. Among other aspects of contribution, it is put on the wife's behalf that she has made contributions as a “homemaker and parent”. However, there is no evidence that the parties had the care of any child at any time during their cohabitation. It is therefore unclear upon what basis it is submitted the wife has made a contribution as a parent.
While the wife has solely met the outgoings on the [E] property since January 2003, she has also solely occupied the property for that period, except for a short time towards late 2004 and early 2005, and from January 2003 to about November 2004 the husband has met the wife's car repayments.
On behalf of the respondent, it is submitted that the court should find the spouses’ contributions were equal. Considerable emphasis is placed on the husband's injection of his property settlement and use of those funds to assist in the purchase of the first home. While this was a significant contribution early in the period of cohabitation, and was significant in enabling the parties to buy the first home, the parties also used $5,000 the wife received and borrowed funds to acquire the first home. Since its acquisition, both parties contributed to its preservation and meeting the mortgage on it. And the wife's inheritance of a house, coming roughly half way through the parties’ cohabitation, and the net value of that contribution by her, is also a very significant factor.
Taking account of all these factors, I am satisfied the spouses’ contributions should be assessed as 55/45 favouring the wife. This in my view recognises the difference in the husband's favour of about $15,000 in capital injected by each party early in their cohabitation, the approximately $90,000 net injected by the wife about half way through their cohabitation from her inheritance, the husband's contribution through his labour on the extensions to the [E] property, and the period when the wife was not working and contributing financially and the husband was the sole financial provider for the household.

Assessment of other relevant considerations (ss.79(4)(d) to (g) and 75(2).

The assessment of the remaining factors is conceded to strongly favour the wife because of the husband's death. The wife seeks a further adjustment in her favour of 25% based on a 60% contribution-based entitlement for her, while the respondent concedes an adjustment of 15% to 20% is appropriate to the wife based on an equal contribution-based entitlement.
The wife is aged 61. She is working but her income is modest. Her age indicates she does not have a significant working life left to her. Her unchallenged evidence is that she cannot borrow more than $20,000. She has superannuation, but it is very modest, and she cannot access it until she retires. The home in which she lives was left to her by her father, and she has been living there to the husband's exclusion now for 4 years, with the exception of a few months in late 2004/early 2005.
It is perhaps ironic in light of the husband's subsequent death that with the property at [E] in the wife's sole name, and the wife living alone in it unchallenged by the husband, it was the wife who instituted these property settlement proceedings. If property settlement proceedings had not been on foot at the time of the husband's death, the wife's title to the property may not have been challenged. However, I am not satisfied this is a relevant consideration in determining the appropriate adjustment to the wife now. Proceedings were on foot at the time of the husband's death, and permission has been given under s 79(8) to continue them.
On the other hand, the untimely death of the husband means he has no future financial needs.
The assessment of these factors after the death of one spouse has been considered by the Full Court of the Family Court in Parrott v Public Trustee of NSW, (1993) 17 Fam LR 785, (1994) FLC 92-473. The Full Court in Parrott contrasted the decision of the Full Court in Tasmanian Trustees Ltd v Gleeson (1990) 14 Fam LR 189, (1990) FLC 92-156 where the whole of the deceased party’s estate, which had passed to the surviving spouse by way of survivorship, was left with the surviving spouse, with the decision of Smithers J in Menzies v Evans (1988) 12 Fam LR 519, (1988) FLC 91-969, where the surviving spouse was ordered to make a significant payment to the estate of the deceased spouse. The Full Court conceptualised the range of discretion in relation to s 75(2) considerations where one spouse has died as a continuum with these two cases at opposite ends of that continuum, highlighting the differences between them which led to markedly different results in each case.
In my view Parrott stands as authority for the following propositions:
a)It must be presumed from the enactment of s.79(8) that the legislature intended that one party to a marriage which has broken down to the point that proceedings have been commenced for orders altering the interests of the parties in property should not profit by the fortuitous death of the other party prior to the determination of those proceedings.
b)However, it is clear that the death of one party has a profound effect upon the balance of the s.75(2) factors.
c)The deceased has a prima facie moral entitlement to the share gained by contribution during his or her lifetime and, if so desired, to dispose of the same by will to persons who are strangers to the marriage.
d)The size of the pool of divisible assets, the level of future need of the surviving spouse, and the extent to which the surviving spouse’s contribution based entitlement will meet that need, are important factors in determining the extent of any adjustment to the surviving spouse.
To the size of the pool of divisible assets may be added its composition in my view, especially considering the leap in property values since Parrott and the cases therein cited were decided. Where the pool of divisible assets comprises a normal suburban home and little else, a significant adjustment in the surviving spouse’s favour may be warranted, even though the value of that home in present day dollars may be many times greater than the value of the asset pool in Parrott and other cases where considerable relative generosity to the surviving spouse was held to be appropriate.
Counsel for the respondent referred me to the unreported decision of Boland J in Ford v Marchant, [2001] FamCA 1585 delivered on

7 December 2001
. While this is a useful example of the exercise of the discretion in respect of the s 75(2) factors where one spouse has died, I do not consider the facts of that case to be similar to this case. Referring to Parrott and the reference there to the continuum for the exercise of discretion in relation to s.75(2) considerations where a spouse has died, Her Honour found that, for reasons she explained, the facts of the case placed it at the Menzies end of the continuum.
It is significant in the present case that while the wife is working her income is modest, she is aged 61 and her future working life is therefore limited, her borrowing capacity is only $20,000, the principle asset is the former matrimonial home, there is nothing to suggest the home or its value are unreasonable or extravagant for the wife's needs, the only other significant assets are cash savings retained by the husband at his death, the wife cannot access her modest superannuation until she ceases work, and the wife's contribution based entitlement is 55%. It is also relevant that there are no dependent child beneficiaries of the deceased husband's estate.
For these reasons I find that this case is much closer to the Tasmanian Trustees end of the continuum referred to in Parrott.
At her stage in life, the wife has a reasonable need to secure accommodation. To retain this home based on her contribution based entitlement, the wife would have to pay the husband's estate $190,652, an amount she cannot raise. The wife was not challenged to suggest that this home was unreasonably extravagant for her, or to suggest she could obtain reasonable accommodation at a lesser cost. Clearly, her contribution based entitlement is insufficient to meet her reasonable future needs. I am therefore satisfied that this home is appropriate to meet the wife's reasonable need to secure accommodation.
Her evidence is that she can raise $20,000 in borrowings. She could thus retain this home and meet a $20,000 payment to the husband's estate. Such a payment would leave the wife with 86.4% of the pool of divisible assets, and the husband’s estate with 13.6%. This requires an adjustment to the contribution-based entitlements of 31.4% in the wife's favour. I am satisfied on the facts of this case and for the reasons given that such an adjustment is appropriate.

Determining a just and equitable result

For reasons already given, it is appropriate for the wife to be given the opportunity to retain the home at [E] provided she makes a payment to the husband's estate of $20,000. Should she not pay this amount within a reasonable period, which I am satisfied should be 8 weeks, then the home should be sold to secure the necessary payment to the husband's estate. In the event of a sale, the husband's estate should receive 4.4% of the net proceeds of sale, and the wife the balance.

I certify that the preceding sixty-eight (68) paragraphs are a true copy of the reasons for judgment of Halligan FM

Associate: Deanne Bush

Date: 19 March 2007

[2009] FMCAfam 143

18 February 2009