Grimshaw & Sawyer
[2022] FedCFamC1F 111
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Grimshaw & Sawyer [2022] FedCFamC1F 111
File number(s): SYC 7315 of 2019 Judgment of: ALDRIDGE J Date of judgment: 10 March 2022 Catchwords: FAMILY LAW – PROPERTY SETTLEMENT – Where the property to be divided consists of a property and the parties’ superannuation interests – Where the parties agreed the superannuation interests should be divided equally – Contributions in respect of the non-superannuation property assessed at 60 per cent in the wife’s favour – Where the wife is entitled to an adjustment – Orders for the wife to receive 70 per cent of the net assets – Superannuation splitting order made to divide interests equally. Legislation: Family Law Act 1975 (Cth) s 79 Division: Division 1 First Instance Number of paragraphs: 54 Date of hearing: 23–25 November 2021 Place: Sydney Counsel for the Applicant: Ms Swann Solicitor for the Applicant: Lander & Rogers Counsel for the Respondent: Mr Gardiner Solicitor for the Respondent: Russell Kennedy Lawyers ORDERS
SYC 7315 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS GRIMSHAW
Applicant
AND: MR SAWYER
Respondent
ORDER MADE BY:
ALDRIDGE J
DATE OF ORDER:
10 MARCH 2022
THE COURT ORDERS THAT:
1.This order is made by way of alteration of property interests pursuant to s 79 of the Family Law Act 1975 (Cth).
2.That within ninety (90) days of the date of these orders and simultaneously:
(a)The wife pay to the husband the sum of $250,000 (“the payment”) to be paid to his solicitors, Russell Kennedy;
(b)The husband shall do all acts and things and sign all documents necessary so as to transfer to the wife all of his right title and interest in the property situate at and known as B Street, Suburb C, NSW being the whole of the land contained in folio identifier: … (“the Suburb C property”) at the wife’s cost;
(c)Each of the wife and husband shall do all acts and things and sign all documents necessary to discharge the mortgage to Australian and New Zealand Banking Group Limited (“the mortgage”) secured against the Suburb C property at the wife’s cost;
(d)the wife shall thereafter indemnify and keep indemnified the husband in respect of any and all liabilities in relation to the Suburb C property, whenever and howsoever arising and the monies owed to her parents, Mr E and Ms F;
(e)the husband arrange at his expense for caveat registered number … lodged by D Pty Ltd on the title to the Suburb C property (and any other caveat lodged against his interest) to be withdrawn at his expense.
3.That in the event that the wife fails to make the payment by the due date (other than due to a default by the husband to comply with his obligations under Order 2 herein) then the husband and the wife do all such acts and things and sign all documents necessary to sell (“the default sale”) the Suburb C property by private treaty at a price to be agreed upon between the parties, and failing such agreement, at a price to be determined by the President of the Real Estate Institute of New South Wales (or any successor of it) or his/her nominee and the Suburb C property be placed on the market for sale not earlier than 1 June 2022.
4.That in the event the Suburb C property is not sold by private treaty within a period of three (3) months of being listed for sale in accordance with Order 3, then the parties shall forthwith do all acts and things and sign all documents necessary to cause the Suburb C property to be sold by public auction at the earliest possible date at a reserve price to be agreed upon between the parties and failing such agreement at a reserve price to be determined by the President of the Real Estate Institute of New South Wales (or any successor of it) or his/her nominee.
5.That the proceeds from the sale of the Suburb C property be disbursed as follows:
(a)First, to pay all costs, commissions and expenses of the sale;
(b)Secondly, to discharge the mortgage and any other encumbrance affecting the Suburb C property save that the husband be solely liable the costs of withdrawing any caveat lodged on the title against his interest;
(c)Thirdly, to repay the monies owed by the parties to Mr E and Ms F in the sum of $230,000;
(d)Fourthly, sum of $19,800 to Mr E and Ms F in reimbursement for the cost of Dr G’s Family Report;
(e)Fifthly, the balance be disbursed 70% to the wife and 30% to the husband.
6.That pending the transfer of the Suburb C property or the default sale, the wife shall continue to have the sole use and occupation of the Suburb C property and be responsible for all mortgage payments, statutory rates and charges, utilities, insurances, outgoings and all other reasonable expenses in relation to the Suburb C property incurred prior to the date of transfer and shall make all such payments as and when they fall due.
7.That the husband be solely liable for and indemnify the wife against any monies allegedly owed to his father, Mr H and to his solicitors that may secured against the Suburb C property.
8.Pursuant to s 90XT(1)(a) of the Family Law Act 1975 (Cth), whenever a splittable payment becomes payable in respect of the interest of the husband in his Super Fund 1 (member number-…13) (“the fund”), the Trustee (J Pty Limited) shall:
(a)Pay to the wife or her legal personal representatives, to the extent permitted by law, the amount which is calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) using a base amount of $89,000; and
(b)Make a corresponding reduction in the entitlement that the husband would have had but for these orders.
9.That as between the husband and wife, and subject to the above orders, the husband and wife shall each respectively retain all interest in and entitlement to:
(a)All personal property now in his/her respective name, possession or control.
(b)All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively.
(c)All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
10.Both the husband and the wife are hereby released from all actions, proceedings, claims, demands, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing.
Section 106A of the Family Law Act 1975 (Cth)
11.That the parties shall do all acts and things necessary and give all consents and execute all documents and writings to give effect to these orders in the time periods prescribed.
12.That in the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these orders, the registrar of the Court be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the registrar being provided with verification of such refusal or failure by way of affidavit.
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 the pseudonym Grimshaw & Sawyer has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALDRIDGE J:
INTRODUCTION
Ms Grimshaw (“the wife”) asks the Court to make orders under s 79 of the Family Law Act 1975 (Cth) dividing her property and that of Mr Sawyer (“the husband”).
Essentially, the property to be divided consists of a property at Suburb C (“the Suburb C property”) and the parties’ superannuation interests. The parties are agreed that the superannuation interests should be divided equally and that a splitting order be made in favour of the wife, allocating her a base amount of $89,000 of the husband’s interests.
As to the non-superannuation property, the wife proposes a 70/30 division in her favour and the husband suggests a 55/45 division in the wife’s favour. If orders are made along the lines suggested by the wife, she seeks the opportunity to refinance the Suburb C property so that she can retain it. If the husband’s proposed orders are made she accepts that the house must be sold.
BACKGROUND
The parties commenced cohabitation in 1999 and married in 2006. They separated under the one roof on 6 March 2018 and engaged in a week about “nesting” arrangement for the care of their children from about September 2018 to October 2019. The parties divorced on 14 July 2021.
The parties have three children, born in 2004, 2006 and 2009. From the date of final separation in October 2019 until 1 June 2020 the children lived primarily with the wife. From that date until 26 November 2021, the middle child lived with the husband. Pursuant to orders made on 25 November 2021, all three children are in the primary care of the wife, with the two younger children spending regular time with the husband, including half of the school holidays. The eldest will make his own arrangements.
At the time the parties commenced cohabitation the wife had a car valued at $15,000 and $10,000 in cash. The husband had no assets of significance.
The wife worked in administration until the first child was born. She recommenced part-time work in June 2018 as an educator. She had commenced studying a Bachelor’s Degree in 2016 and after graduation, she started working as an educator in 2019. The wife currently earns $72,000 per year, having just had a significant wage increase.
The husband has worked as a professional for a number of years and for numerous employers. He was unemployed for six weeks in each of 2014 and 2016 and for five months over 2018–2019. He has not been employed since mid-2019.
The husband enrolled in a Bachelor’s Degree at the K College in 2019. The husband said due to the stress of the parenting issues then taking place, he failed his subjects later that year. He has deferred his study, but hopes to resume in the future.
The parties purchased the Suburb C property on 16 September 2007. Prior to that they lived in rented accommodation and, for a while, with the wife’s parents. The purchase of the property was funded by:
(1)An interest free loan of $200,000 from the wife’s parents, which remains outstanding;
(2)A gift from the wife’s parents of $13,000;
(3)A mortgage of $265,000; and
(4)A first home owner’s grant of $8,000.
The parties would not have been able to purchase the property without the assistance of the wife’s parents. In addition, the wife’s parents have assisted by:
(1)Paying off credit cards in the sums of $30,000 and $12,000;
(2)Paying the parties’ family health insurance premiums from 2004 until June 2020;
(3)Giving the wife a second hand car, as well as providing $8,000 and $4,000 to assist in the purchase of other cars;
(4)Met the costs of three family trips to Queensland including airfares;
(5)Paid the costs of the wife’s university tuition; and
(6)Prior to the purchase of the Suburb C property, met the costs of the parties’ living expenses while they were residing with the wife’s parents for approximately one year although the amount involved is not large.
The husband’s evidence was that the credit card payments were in fact loans from the wife’s parents which had been repaid. In the course of submissions, it was agreed that they were loans which remain unpaid in the sum of $30,000.
The husband’s father assisted the husband with renovations to the Suburb C property, not all of which were completed. The husband estimates that his father provided financial assistance of $18,000 which included buying materials for the renovations. The wife agreed that a gift of $8,000 was made and it does not seem improbable that the husband’s father provided additional assistance.
THE PROPERTY TO BE DIVIDED
The parties presented the Court with a Joint Balance Sheet (Exhibit “1”). In submissions many of the entries were abandoned leaving a few in dispute which require resolution.
There was little dispute as to the assets. I shall take into account only the Suburb C property as the remaining assets are bank accounts holding funds which are likely to have been accrued after separation, household contents where there is no evidence as to their value and cars held by each party to a similar value. Whilst one car may have been acquired before separation and one after, they effectively balance each other out.
There was no dispute as to the loans owed to the bank and the $200,000 owed to the wife’s parents. It was agreed that the loan from the wife’s parents for the repayment of credit card debts should be taken into account at $30,000.
The claimed loan of $7,000 for a car from the wife’s parents should be excluded as it is disputed and there is no evidence of it. The parties’ individual credit card debts will not be included as, in the absence of evidence, it cannot be found that they relate to pre-separation debts. The parties’ obligations in relation to their legal fees will not be taken into account as none has been paid from the property of the parties and most are subject to borrowing.
The husband has, since separation, sold shares to a value of about $22,000 which he has used for living expenses. The husband did not challenge the wife’s submission that this should be set against the joint credit card debt, thereby removing both from further consideration and noting that there was no evidence as to when the debts were incurred or by whom.
There is no satisfactory evidence that the husband’s father advanced $10,000 to the husband and that claimed debt will not be included.
The husband’s Student Start-up Loan should be his sole responsibility as it relates to his post-separation retraining.
In addition to the matters raised by the parties, account must be taken of the expense of the single expert witness in the parenting aspect of the proceedings. The cost was $19,800 which has been paid by the wife’s parents and must be repaid.
The husband withdrew $20,000 from his superannuation fund after separation. Having regard to the limited evidence available and his financial circumstances and employment difficulties, that does not appear to be unreasonable. No adjustment will be made in relation to it.
At the hearing, the parties were asked to provide notice of the proposed superannuation splitting orders to the trustee of the husband’s superannuation fund and to provide a current balance of his entitlements. The former was done but not the latter. The best that can be done is to work on the figure that is available and to set the amount to be split in the sum claimed by the wife in submissions to be one half.
Assets and liabilities
ASSETS No. Ownership Description Value Real Estate 1 J B Street, Suburb C $1,300,000 LIABILITIES No. Ownership Description Value Mortgages 2 J ANZ mortgage (B Street, Suburb C) $192,536 3 J Loan from wife’s parents (B Street, Suburb C) $200,000 4 J Loan from wife’s parents (repayment of credit card debts) $30,000 5 J Single Expert Fee $19,800 Total $442,336 NET ASSETS $857,664 SUPERANNUATION No. Member Name of Fund & Type of Interest Value 6 W Super Fund 2 $23,325 7 H Super Fund 3 $181,497 Total $204,822
As stated above, the parties own just the one significant item of property, being their house which was acquired during their marriage. They each seek its division now that the marriage has ended. It is just and equitable to do so.
Contributions
Although the wife had slightly more assets at the time of cohabitation, that difference is of little consequence 22 years later.
The wife’s parents have made significant financial contributions, which must be taken to be contributions made by the wife. Of significance is the provision of an interest free loan of $200,000 since 2007. Whilst the principal will be repaid, the parties have not had to pay any interest on that sum which has been a considerable benefit to them. Without the provision of this loan, the parties would not have been able to purchase the Suburb C property which was the family’s home.
The wife’s parents also provided a gift of $13,000 together with the other helpful financial assistance described earlier.
Whilst the husband’s father also assisted financially, it was to a markedly less degree.
It was not disputed that the contributions of the wife’s parents should be given weight. In my view, in the circumstances of this case, they deserve significant weight.
Throughout the marriage itself the parties themselves contributed to the roles that they took on as best they could according to their abilities. It is true that the wife took on a greater parenting burden, which included caring for three children with attention deficit hyperactivity disorder (“ADHD”), at times because of the husband’s mental health issues. The husband however, worked as best he could and carried out some renovations.
I assess the parties’ contributions during the marriage, leaving aside the contributions made by the wife’s parents, to be equal.
Since the final separation in October 2019, the wife has borne the bulk of the burden of caring for and supporting the three children. The middle child lived with the husband from June 2020 to 26 November 2021. During that time, due to the disparity in incomes, the wife paid the husband a modest child support payment. The husband has not paid the wife anything for the support of the three children.
Importantly, the wife has maintained the Suburb C property by paying the mortgage and other outgoings on it since 25 June 2019. This has maintained a home for her and, for the most part, the children and has, at the least, preserved the equity in the house. The husband has not contributed to these outgoings so that the benefit of the wife living in the house and avoiding the payment of rent carries little weight.
The post separation contributions of the wife, both financial and non-financial, since separation exceed those of the husband and should be given weight.
I assess that the above contributions favour the wife as to 60 per cent and the husband 40 per cent.
Considerations in s 79(4) of the Family Law Act 1975 (Cth)
The wife is currently earning $72,000 a year and her partner is earning approximately $80,000 per year.
The husband is currently unemployed but said he is seeking part-time work and hopes to resume his studies. I accept that his psychological difficulties make it difficult for him to work full-time in that area, as evidenced by his difficulties maintaining employment over the years. It is not known when he will resume his studies or when he will complete them.
The husband has re-partnered with a person who is employed as an educator, although presently they do not live together. The new partner has her own accommodation at which the husband stays at times. The income of the husband’s new partner, who said they are in a committed relationship, is not known.
Whilst the husband clearly has a significant earning capacity, there is doubt as to whether he will be able to exercise it.
Overall, the future financial capacity of the husband is likely to be less than the wife.
The wife will bear the financial burden of supporting all three children. The eldest child will soon turn 18 years old, but will be in his last year of school in 2022. He will need financial support for some time.
The children will spend time with the husband. The eldest child will make his own arrangements but the two younger children will spend two nights per fortnight and half of the school holidays with the husband. That, however, does not detract from the proposition that the bulk of the support for the children will come from the wife.
As part of the care of the children, the wife will have to find accommodation for them, either by refinancing the Suburb C property if that is possible, by purchasing somewhere else or by renting.
The husband is presently living with his father rent free for at least another year with the arrangement to be reconsidered then. No suggestion was made that the husband’s father would not continue to provide a home for the husband, particularly if he continued to be unemployed.
Weighing these considerations, the provision of a home for the children carries the greater weight.
Counsel for the husband accepted this to be so and also accepted that this factor outweighed the husband’s needs, although counsel did suggest that the allowance should be modest.
I consider that the burden on the wife will be substantial. The children all have ADHD. The youngest child is presently 12 years old and is in Year 6. The wife will have to support her, most likely, for at least another six years. She is unlikely to receive any significant financial assistance for the children from the husband.
This consideration justifies considerable weight and I consider it requires an adjustment of 10 per cent even taking into account the husband’s likely lower earning capacity.
The non-superannuation property will be divided so that the wife receives 70 per cent and the husband 30 per cent; or $600,364 and $257,299 respectively. The difference is $343,065 which I consider to be just and equitable having regard to the above matters and the relatively small amount of property available for division.
CONCLUSION
The orders to give effect to this division will be largely along the lines proposed by the wife. In either event, the wife seeks to have any sale of the property delayed until May 2022.
The proceedings initially before the Court involved parenting proceedings as well. Those proceedings were resolved by consent orders which saw one of the children returning to the care of the wife. That child has significant issues with schooling and anxiety in general. The wife contends that a delay in the sale of the property would be in the child’s best interests so as not to exacerbate her difficulties by imposing another significant change to her life without giving her the chance to settle into living with the wife.
The husband accepts this contention and suggests that any sale be delayed for three months.
Having regard to the matters raised by the wife and to the time of year these orders were being considered (shortly before Christmas holidays) I consider it appropriate to delay any sale until 1 June 2022.
I am satisfied that the trustees of the husband’s superannuation fund have been appropriately notified of the proposed orders.
I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Aldridge. Associate:
Dated: 10 March 2022
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