H & L
[2007] FMCAfam 125
•12 March 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| H & L | [2007] FMCAfam 125 |
| FAMILY LAW – Property settlement – short marriage – spousal maintenance. COSTS – Whether certificate should be granted pursuant to s.10(3) Federal Proceedings (Costs) Act 1981. |
| Family Law Act 1975, ss.72, 74, 75, 79 Federal Magistrates Act 1999, s.59 Federal Proceedings (Costs) Act 1981, s.10 |
| In the Marriage of Lee Steere (1985) 10 Fam LR 431 In the Marriage of LJ Russell & SC Russell (1999) 25 Fam LR 629 In the Marriage of FA & DG Clauson (1995) 18 Fam LR 693 In the Marriage of Bushby, AL & Bushby, DE (1988) FLC 91 – 919 AER & AG [2004] FMCA 641 In the Marriage of Bevan (1993) 120 FLR 283 Chorn and Hopkins (2004) FLC 93 – 240 Aleksovski v Aleksovski (1996) FLC 92 – 705 Parshen v Parshen (1996) 92 – 720 In the Marriage of JG and HJ McMahon (1995) 19 FamLR 99 Norbis and Norbis (1985 – 86) 161 CLR 513 Ward v Schembri (2005) 33 Fam LR 546 |
| Applicant: | DJH |
| Respondent: | SL |
| File Number: | SYM 4894 of 2004 |
| Judgment of: | Cameron FM |
| Hearing date: | 13 October 2006 |
| Date of Last Submission: | 13 October 2006 |
| Delivered at: | Sydney |
| Delivered on: | 12 March 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr R M Galloway |
| Solicitors for the Applicant: | Pippa Colman & Associates Solicitors |
| Counsel for the Respondent: | Mr Livingstone |
| Solicitors for the Respondent: | Macedone Christie Willis |
ORDERS
Within 60 days of the date of these orders the wife pay to the husband by way of property settlement the sum of $55,602.
There be no alteration to the interests of the husband or wife in their respective superannuation funds.
The parties retain all items of property currently in the possession or control of each of them respectively.
The husband’s application for spousal maintenance be dismissed.
The parties’ applications for orders under the Federal Proceedings (Costs) Act1981 be dismissed.
The parties have liberty to apply on three days’ notice in respect of the implementation of these orders.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
SYM 4894 of 2004
| DJH |
Applicant
And
| SL |
Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings relate to an application for property settlement and lump sum spouse maintenance by the husband. The applicant is DJH (“the husband”) and the respondent is SL (“the wife”). The wife does not make an application for maintenance against the husband and, in respect of property interests, simply seeks the dismissal of the husband’s application with costs.
The marriage was one of short duration. There was disagreement between the parties as to when cohabitation commenced. The husband says it was in August 2000 and the wife says it was in October or November 2000.
The parties were married on 22 April 2001. The parties separated on
7 April 2003 and were divorced on 6 September 2004.
During the marriage the wife was employed by ANZ (not the real organisation) and the husband was an information technology contractor to Optus (not the real organisation). However, during the marriage, the husband had periods when he was “off contract” and not in remunerative employment.
It is clear that, notwithstanding the periods of unemployment, the husband earned total sums considerably in excess of the amounts earned by the wife. However, the wife’s financial contribution in respect of assets at the commencement of cohabitation was much greater than the husband’s. Although, in general terms, each party left the marriage with much the same assets with which they entered it, the husband makes application to this court for orders which take account of what he alleges is the considerable direct financial contributions he made during cohabitation.
The evidence
The husband was represented by counsel and relies on his affidavits sworn 6 July 2006 and 9 October 2006 and his financial statement dated 1 September 2005. The affidavit of Margaret Adams (not her real name) 8 September 2006 which deals with notification to the wife’s superannuation trustee was also before the Court.
The husband had also sought to rely on the affidavit of Simon Micos (not his real name) sworn 6 October 2006 on the subject of the valuation of property in Malta owned by the wife. That affidavit could not be read because it had been sworn overseas in a fashion not in compliance with s.59 of the Federal Magistrates Act 1999. Nevertheless, the parties were willing to agree that the valuation report annexed to that affidavit should be tendered as an exhibit in order that the Court could take account of its contents.
The wife was also represented by counsel and relies on her affidavits sworn on 5 July 2006 and 4 October 2006 as well as on her financial statement dated 5 July 2006 and the affidavit of Dr Peter Rutherford (not his real name) sworn 6 October 2006.
Each party also gave oral evidence and was cross-examined.
The law
In property settlement applications under s.79 of the Family Law Act 1975 (“Act”) a four-step process is to be observed, those steps being, first, identification of the parties’ property at the time of the hearing; secondly, the assessment of the parties’ contributions; thirdly, the application of s.75(2) matters; and fourthly, whether the overall result is just and equitable. (In the Marriage of Lee Steere (1985) 10 Fam LR 431; In the Marriage of LJ Russell & SC Russell (1999) 25 Fam LR 629; In the Marriage of FA & DG Clauson (1995) 18 Fam LR 693).
It also has to be noted that this was a short marriage. In such marriages, the parties’ actual financial contributions to the marriage are the primary issue: In the Marriage of Bushby, AL & Bushby, DE (1988) FLC 91 – 919, AER & AG [2004] FMCA 641.
As to spousal maintenance, s72(1) of the Act provides:
(1)A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
In this regard:
… an award of spousal maintenance requires:
1.a threshold finding under s.72;
2.a consideration of s.74 and s.75(2);
3.no fettering principle that pre-separation standard of living must automatically be awarded where the respondent’s means permit; and
4.discretion exercised in accordance with the provisions of s.74, with “reasonableness in the circumstances” as a guiding principle.
[In Marriage of Bevan (1993) 120 FLR 283 at 290; per the Full Court of the Family Court.]
The facts
The husband was born on 11 December 1942 and the wife was born on 13 August 1960.
As already noted, the parties disagreed as to when cohabitation commenced. In his affidavit of 6 July 2006 the husband says that he and the wife began cohabiting by the time of the wife’s birthday on
13 August 2000. In his affidavit of 9 October 2006 he says that he and the wife went via Indonesia to Cairns (not the real locations) between 20 and 30 August 2000 and that they had been living together before and after their holiday. In her affidavit sworn 5 July 2006 the wife says that discussions regarding cohabitation commenced in October 2000 and that cohabitation commenced in November 2000. In cross-examination the husband was taken to annexure DJH-4 to his affidavit of 9 October 2006 where a study of credit card expenses revealed that, in fact, he had been in Cairns on 24 October 2000 not August 2000. He readily conceded this mistake when it was pointed out to him. In her cross-examination, the wife conceded that they commenced cohabitation around October or November 2000 and that she could not remember the exact date. Given that the husband identifies the couple as having been living together at the time they travelled to Cairns and the wife conceded that cohabitation commenced in October or November 2000, I find that cohabitation commenced in October 2000, and prior to 24 October 2004.
The parties met on the internet when the husband was living in Tasmania (not the real location) and the wife was living in Adelaide (not the real location).
When the parties first met the husband was contracted with the Optus Architecture Group in Tasmania and relocated from Tasmania to Adelaide in August 2000 to be with the wife. He deposes that in doing so, his level of responsibilities and work opportunities were reduced and his contract was terminated on 27 December 2001. He was then out of work until 15 May 2002 and was again out of work from
5 March 2003 to 15 December 2003.
The wife obtained a Masters in Education and an accountancy qualification in Malta (not the real location) and completed her studies in 1986. She came to Australia with her first husband in May 1987 and there are two children of that marriage, the first daughter being born in September 1988 and the second daughter being born in June 1996. The wife and her first husband were divorced in about April 2000.
The wife commenced work with ANZ in 1999 as a teller and next as a customer service officer. During the course of the marriage to the husband the wife undertook and completed a financial planning course through the Securities Institute in Sydney. In around December 2001 while she was undertaking the financial planning course, the wife was transferred to the ANZ financial planners’ section. However, after the parties’ separation she sought a transfer to the less stressful life insurance section where she received a slightly lower salary and is now employed in a national customer relations role at the bank.
In mid-2003, after the parties’ separation, the husband travelled overseas on a journey he described as being a month in length. In August 2004 the husband left Adelaide and moved to Darwin (not the real location) to live with and care for his mother who was then 83 years old and had several health problems.
The wife continues to live in the former matrimonial home in Adelaide.
The assets and liabilities of the parties
A preponderance of assets lies in the hands of the wife as compared with the husband and this was so at the commencement of their relationship.
The husband’s evidence on financial issues generally is characterised by detail, whereas the wife’s evidence is less detailed and less complete. Because of the husband’s greater attention to detail, I accept the figures he provides except where, for the reasons I give, I have found a different figure to be appropriate.
The parties were agreed that the former matrimonial home was worth $370,000. They also agreed on the value of the wife’s furniture and effects, the wife’s ANZ Dynamic Growth Fund (not the real organisation), the husband’s car and the husband’s furniture and effects.
Valuation of the land in Malta owned by the wife was a matter of argument between the parties, the wife not having obtained a valuation of it for the purposes of these proceedings. The valuation which is before the Court by consent is one obtained by the husband. While
Mr Livingstone on behalf of the wife submitted that whether the Court valued the property at €30,000, €35,000 or €40,000 would not really matter in the overall scheme of things, Mr Galloway on behalf of the husband suggested that €35,000, lying midway on the €30,000 to €40,000 range contained in the valuation would be an appropriate value to ascribe to the property. As the Court has been supplied with a valuation range, and with no proper basis on which it can determine whether either end of the range, or some other intermediate figure is more appropriate than another, I do take the €35,000 midway point as the property’s value. Using the currency converter figure in Exhibit 3, I calculate this figure to be the equivalent of AUD$58,464.
In his affidavit of 6 July 2006 the husband said that the wife had savings with ANZ and savings in a PIF savings plan (not the real organisations), both of an unknown amount, a Toyota Corolla worth $2,500, ANZ shares (not the real organisation) worth about $5,000 together with household contents, jewellery and clothing worth an unknown amount. He said that there was a mortgage over the former matrimonial home. As to his own assets, the husband said that he had savings with ANZ (not the real organisation) of about $1,500, savings with Encompass Credit Union (not the real organisation) of about $1,600, a Toyota Corona worth about $1,000 and superannuation worth $117,943. He said that the wife had superannuation worth $42,861.
In his financial statement dated 1 September 2005 the husband referred to having an ANZ account (not the real organisation) with a balance of $9, a Toyota Corona estimated to be worth $1,200, a bicycle worth $500 and estimated superannuation entitlements of $120,000. He said he had an income tax debt of about $4,328, a National Australia Bank (not the real organisation) visa account debt of $366 and liabilities to accountants of $1,100.
It was not submitted that, as of the date of the hearing, the husband had any debts to be taken into account when considering his net assets.
The wife’s affidavit sworn 5 July 2006 did not contain detail concerning her current assets equivalent to that contained in the husband’s affidavit referred to above. However, in her financial statement dated 5 July 2006 she referred, in addition to the former matrimonial home and the land in Malta, to an ANZ account (not the real organisation) holding about $300, ANZ shares (not the real organisation) of an unknown value, a Toyota Corolla worth about $1,500, household contents worth about $10,000, jewellery worth about $5,000 and superannuation worth $36,500. The wife also identified a mortgage on the home of about $25,800, an ANZ Equity Access Loan (not the real organisation) worth about $3,000 and an ANZ visa account (not the real organisation) worth about $7,000. She also identified an amount estimated at $45,000 and identified it as being held in trust for her daughters.
In her evidence the wife said that the ANZ Dynamic Growth Fund still contained $3,008.95 and that earlier in the year the ANZ Max 1 account (not the real organisation) had $40,608 on deposit. However, the wife did not submit valuations of her motor vehicle or her jewellery.
At the time of the hearing, the wife’s liabilities were a mortgage over the townhouse, an Equity Access Loan to ANZ (not the real organisation) secured against the townhouse of $17,300 which was to increase by $11,000 because of further borrowings for these proceedings, a loan from her de facto partner of $20,000 to fund these proceedings and credit card debts.
In their affidavits, financial statements, Case Outlines and oral evidence, the parties allocated various values to their respective assets and liabilities. As at the time of trial the most recent figures they had given as to their current assets and liabilities were:
Assets
| Husband | Wife | ||
| a) | Adelaide Townhouse (w) | $370,000 | $370,000 |
| b) | Maltese land (w) | $60,000 | Not supplied |
| c) | ANZ savings (w) | $882 | $300 |
| d) | ANZ Dynamic Growth Fund (w) | $3,008 | $3,008 |
| e) | ANZ Max 1 (w) | $40,608 | $40,608 |
| f) | ANZ Balanced Growth Fund (w) | $8,991 | Not supplied |
| g) | ANZ Cash Management Account (w) | $30,515 | $0 (spent) |
| h) | Toyota Corolla (w) | $2,500 | $1,500 |
| i) | ANZ shares (w) | $6,000 | $4,517 |
| j) | Furniture and effects (w) | $10,000 | $10,000 |
| k) | Jewellery (w) | $10,000 | $5,000 |
| l) | Superannuation (w) | $51,596 | $36,500 |
| m) | ANZ savings (h) | $364 | $1,500 |
| n) | Encompass Credit Union savings (h) | $2,984 | $1,600 |
| o) | Furniture and effects (h) | $1,000 | $1,000 |
| p) | Toyota Corona motor vehicle (h) | $1,000 | $1,000 |
| q) | Superannuation (h) | $129,298 | $117,943 |
Liabilities
Husband
Wife
a)
Mortgage (w)
$25,261
$25,800
b)
Credit cards (w)
Not supplied
$8,500
c)
Equity Access Loan (w)
Not supplied
$28,300
d)
Loan from partner (w)
Not supplied
$20,000
With the exception of the ANZ Max 1 account, there is a lack of clarity in the evidence concerning the bank accounts held by the wife. The various balances which are referred to differ, suggesting that those balances changed from time to time or, alternatively, that the parties’ evidence lacks specificity. Also, the parties used different names to describe the accounts and it is difficult to be confident that they are talking about the same things.
In her affidavit of 5 July 2006 the wife says that, at cohabitation, she had “a savings account of approximately $11,000 which I held in trust for the children” and “I had savings in [an ANZ] account of approximately $22,000. These monies had been forwarded to me by my mother in [Malta] in July 2000. My mother intended the monies were to be held in a trust account for my daughters”. The wife also says that “in November 2002 I withdrew $30,000 from my [ANZ] savings account and deposited the monies into the trust account I had opened for the children at the [ANZ] bank. I did this in response to a request from my mother”.
In the same affidavit the wife says that at the time of separation she had investments “in Bankers Trust of $11,000 as trustee for my children” and she had “a further [ANZ] account with a balance of $25,000 in trust for the children”.
In her evidence the wife said she had had an account called the Cash Management Account Investor Option which, near the time of separation, had approximately $30,000 invested in it in trust for her children. The wife agreed that as at 15 May 2003 the account probably held $30,501.05, as was put to her by counsel for the husband. In her evidence the wife also agreed that she had another account, an ANZ Balanced Growth Fund, which on 1 July 2003 held $8,991.42 and was held in trust for her daughters.
In his affidavit of 6 July 2006 the husband refers to the wife’s “savings with [ANZ] Bank” as $E6,000 and her savings in a PIF Savings Plan of an unknown amount. As to the wife’s bank accounts as at the date of the husband’s affidavit, he describes the same two accounts but this time expressed their value as “unknown”. In his affidavit of 9 October 2006 the husband says that he was never aware of the existence of the $11,000 trust account and he quotes a letter from the wife’s solicitors saying that she had been mistaken in her affidavit when she said that she had a savings account of approximately $11,000 and an ANZ account of approximately $22,000 at the commencement of cohabitation because the first account was not established until the following year from funds drawn from the second account with the consequence that the $22,000 balance deposed to by the wife was incorrect. In his affidavit the husband says:
These two trust accounts referred to are the [ANZ] Balanced Growth Fund and [ANZ] Dynamic Growth Fund, respectively.
Given the much greater attention to detail seen in the husband’s evidence, compared to the wife’s, I accept that these are the correct names for these accounts.
In relation to the history of those accounts, the husband, in his affidavit of 9 October 2006, deposes that he disagreed that the wife:
… had approximately $22,000 in [an ANZ] Bank account. Bank statements disclosed show that as at 1 August 2000 the account balance was $17,146. The closing balances for October, November and December 2000 were $13,250, $12,956 and $12,392 respectively. Therefore, at no relevant time did the account have a balance of approximately $22,000. Furthermore, [the wife’s] mother made a single deposit to this account on
20 July 2000 of $18,689, not $22,000 as alleged by the wife.
In his affidavit of 9 October 2006 the husband identifies the bank account into which the wife deposited $30,000 in November 2002 as an ANZ Cash Management Account Investor Option. Later in that affidavit he deposes to the account having a balance of $30,419 on
31 March 2003.
In her affidavit sworn 5 July 2006 the wife said that she used the funds held in trust for her daughters to purchase a new television, telephone, computer for her daughters for their homework, a washing machine, a vacuum cleaner, new linen and curtains for her daughters, clothes, uniforms and school shoes for her daughters, her daughter’s 16th birthday party, and Year 10 formal, school trips, excursion, car repairs, house repairs and holidays. She closed the account in January 2005.
The husband’s counsel submitted that the ANZ Cash Management account of $30,515 which the wife said had been spent away was liable to be added back. Similar considerations should be applied to the ANZ Balanced Growth Fund of $8,991. As both of these accounts were said to be held on trust for the daughters and given that in her affidavit the wife said that the funds held in trust for her daughters had been spent, I conclude that the funds contained in both of them were spent.
No evidence was adduced by the wife to corroborate her assertion that the funds in question were, in reality, trust funds. No evidence of the terms of such trust or trusts was adduced and the use to which the funds were put indicates that the wife had unfettered discretion over the disposition of those moneys. Consequently, I find that these accounts were, in reality, her funds and consideration has to be given to whether the amounts spent should be added back.
In Chorn and Hopkins (2004) FLC 93 – 240 the Full Court of the Family Court said this at 79,314 [24]
24.We will refer again later in these reasons to the decision in Townsend, but we would in the present context draw attention to the following observations by later Full Courts:
``2.11 There seems to be no appropriate basis for notionally adding back moneys that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses. Neither the Family Law Act nor the case law require that parties go into a state of suspended economic animation once their marriage breaks down pending the resolution of their financial arrangements. Parties are entitled to continue to provide for their own support. Whether any expenditure so incurred is reasonable or extravagant is a matter that can be determined by the trial Judge. (Marker [1998] FamCA 42, 1 May 1998, per Baker, Kay and Chisholm JJ.)
...
46. Whilst not seeking to place a fetter upon the exercise of discretion of a trial judge in individual cases, it seems to us that the concept of adding monies reasonably disposed of back into the pool ought to be the exception rather than the rule. The parties are entitled to reasonably conduct their affairs post-separation in a manner that is consistent with properly getting on with their lives. (Cerini [1998] FamCA 143, 8 October 1998, per Nicholson CJ, Ellis, Kay JJ.)''
Based on their Honours’ reasons cited in the previous paragraph I find that it is not appropriate to add back the amounts spent by the wife after separation from funds said by her to have been held on trust for her daughters on matters which I find to have been necessary living expenses and of a nature which was not extravagant.
The wife’s evidence is that at around February 2005 she opened another ANZ account in trust for her children with around $16,000 to $18,000 which had been sent to her by her mother the previous month for the children’s education. She says that since then she has been putting into that account the money which her partner contributes to household expenses. At the time of the hearing the account contained $40,608 and was identified in the wife’s oral evidence as an ANZ Max 1 account.
In her evidence the wife conceded that if she needed something for the children she would withdraw from that account.
The wife said that the ANZ Dynamic Growth Fund investment account in which there was $3,008.95 was also held in trust for her daughters.
Again, no evidence of a formal trust or trusts governing the control and disposition of the funds in these two accounts was adduced. Neither, in relation to the ANZ Max 1 account, was there any evidence from the wife’s mother deposing to her 2005 gift, its timing, purpose or size. Given the way the wife dealt with the more than $30,000 said by her to have previously been held on trust for her daughters, I do not accept that the sums in the ANZ Max 1 account or the ANZ Dynamic Growth Fund can properly said to be beneficially owned by the daughters. Rather, I find that the wife has unfettered discretion over those funds too and for that reason I find that they should be treated as her assets.
In relation to the wife’s motor vehicle, the husband’s counsel conceded that there was not much between the parties’ figures and that it would not do an injustice to the husband were the Court to take the lower value or an injustice to the wife if it took the higher. Absent evidence to the contrary, I conclude that the wife would have a better knowledge of her car and its value and I prefer her valuation of it to the husband’s.
Uncharacteristically, the value placed by the husband on the wife’s ANZ shares was only an estimate whereas the value ascribed by the wife in her Case Outline was sourced to their published value as at
19 July 2006. Although that date was three months prior to the hearing, it is the most reliable figure advanced by the parties on this asset. Consequently, I prefer the wife’s valuation to the husband’s valuation of the wife’s ANZ shares.
In his evidence, the husband said that he believed he paid just short of $30,000 for jewellery for the wife but would estimate its value at the time of the hearing at $10,000. I accept that the husband spent nearly $30,000 on jewellery for the wife and that a reduction to approximately one third of that figure, namely $10,000, is reasonable. The wife’s suggested figure of $5,000 would seem to represent an excessive depreciation on the retail cost of those items.
As to the wife’s superannuation, the husband’s counsel suggested in addresses that the figure had been agreed at $51,596. The wife’s counsel did not dispute this in his reply and I accept the figure proposed by the husband’s counsel.
As to the husband’s savings, although the individual amount advanced by the respective parties in relation to each of those accounts is different, the total amounts are roughly the same. Consequently, I will accept the husband’s figures on the basis that, on their face, they appear to be more precise and, given the general impressiveness of the financial evidence advanced by the husband I am more willing to accept his figures in this respect.
Similarly, in relation to the husband’s superannuation, he identifies a figure larger than the one advanced by the wife and I accept it as likely to be the more accurate figure.
The evidence indicated that in order to fund the proceedings the wife had borrowed from her partner and had recently borrowed an additional amount from her Equity Access loan. I note what was said by the Full Court in Chorn and Hopkins at 79,322-3 [58]:
If funds used to pay legal fees have been generated by a party post separation from his or her own endeavours or received in his or her own right … they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken in account as a liability in the calculation of the net property of the parties.
Consequently, when determining the wife’s liabilities, the loan from the her partner to fund these proceedings and the additional borrowing on the Equity Access loan for legal fees she referred to in her cross examination will not be taken into account.
In the absence of evidence to the contrary from the husband, I accept the wife’s valuations of her credit card debt at $8,500 and her Equity Access Loan at $17,300 – the latter being the figure prior to her additional borrowing for the purpose of these proceedings.
Doing the best I can given the quality of the evidence before me and taking account of what I understand to be the agreed values of various assets, I find that the assets and liabilities of the parties at trial are as follows:
Assets
a)
Adelaide Townhouse (w)
$370,000
b)
Maltese land (w)
$58,464
c)
Bank account (w)
$882
d)
ANZ Max 1 (w)
$40,608
e)
ANZ PIF / Dynamic Growth Fund (w)
$3,008
f)
Toyota Corolla (w)
$1,500
g)
ANZ shares (w)
$4,517
h)
Furniture and effects (w)
$10,000
i)
Jewellery (w)
$10,000
j)
Superannuation (w)
$51,596
k)
ANZ savings (h)
$364
l)
Encompass Credit Union savings (h)
$2,984
m)
Furniture and effects (h)
$1,000
n)
Toyota Corona motor vehicle (h)
$1,000
o)
Superannuation (h)
$129,298
Subtotal
$685,221
Liabilities
a)
Mortgage (w)
$25,261
b)
Credit cards (w)
$8,500
c)
Equity Access Loan (w)
$17,300
Subtotal:
$51,061
Total:
$634,160
Consequently, the amount of $634,160 forms the pool of assets for distribution between the parties.
Contributions
In Aleksovski v Aleksovski (1996) FLC 92-705 at 83,437 Baker and Rowlands JJ said that is necessary for the Court to
… weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment.
At cohabitation
According to his affidavit sworn 6 July 2006, at the commencement of cohabitation, the husband had the following assets and liabilities:
Assets
a)
Personal savings with the Commonwealth Bank (not the real organisation)
$E2,000
b)
DJH Pty Limited savings with the Commonwealth Bank (not the real organisation)
$E16,000
c)
Peugeot motor vehicle
$E2,000
d)
Household furniture, furnishings and effects (including some antique items)
$E10,000
e)
Superannuation
$79,000
Liabilities
a)
Credit card debt with Westpac (not the real organisation)
$E100
b)
Credit card debt with NAB (not the real organisation)
$E3,700
As to the husband’s assets at the time of cohabitation, the wife describes them in her affidavit sworn 5 July 2006 as follows:
(a)A few pieces of furniture
(b)Minimal savings
(c)An old car
(d)Television
(e)A self managed superannuation fund
(f)Art and collectibles
The wife also estimates the husband to have had a debt to the Australian Taxation Office of approximately $13,000.
In the same affidavits the parties describe the wife’s assets and liabilities at the time of co-habitation as follows:
Assets
Husband
Wife
a)
Townhouse
$275,000
E300,000
b)
Land in Malta
Unknown
Not supplied
c)
Savings
$E16,500
$E11,000
d)
Savings
Not supplied
$E22,000
e)
Toyota Corolla motor vehicle
$4,000
$E4,000
f)
Household furniture, furnishings and effects
Unknown
Not supplied
g)
Jewellery (including some in Malta)
Unknown
Not supplied
h)
Superannuation
Unknown
Not supplied
Liabilities
a)
Mortgage debt on townhouse
$29,500
$30,000
b)
Credit card debt
Unknown
Not supplied
As the wife has not attempted to put a value on the husband’s assets or liabilities at the time cohabitation commenced, I accept the husband’s figures on these details. In relation to the wife’s assets and liabilities, to the extent that there are figures, I accept those advanced by the husband for the reasons already expressed.
During cohabitation
During cohabitation the husband and wife lived in the townhouse in Adelaide.
The husband’s evidence as to the financial contribution made by him during cohabitation is characterised by considerable detail and analysis and appears to be the result of a close study of his bank and credit card accounts during the relevant period. By contrast, the wife’s evidence was much less detailed and was incomplete. I find the detailed analysis undertaken by the husband to be convincing and persuasive as to his expenditures during the relevant period and prefer it to the wife’s where the parties’ evidence differs.
During the course of the parties’ relationship, the husband earned a considerably greater income than did the wife. In his affidavit sworn
6 July 2006 the husband deposes to the following income:
a)
2000/2001
$156,477
b)
2001/2002
$92,682
c)
2002/2003
$111,702
Total
$360,861
In his affidavit the husband described this as “taxable” income but called it gross income in his oral evidence. I conclude that in his affidavit he means to refer to gross income.
Based on information contained in the husband’s affidavit sworn 6 July 2006 the wife’s “taxable” income for the same financial years was as follows:
a)
2000/2001
$30,942
b)
2001/2002
$36,033
c)
2002/2003
$62,770
Total
$129,745
Again I conclude that by “taxable” the husband intends to refer to gross income.
The wife’s evidence as to the parties’ income barely touched the issue and did not supply the detail contained in the husband’s affidavit.
The husband deposes in his affidavit sworn 6 July 2006 to have spent a total of $278,598 during the marriage which he divides into five main categories as follows:
a)
Children
$20,478
7.4%
b)
Family
$90,828
32.6%
c)
Wife
$100,804
36.2%
d)
Wife and husband
$17,600
6.3%
e)
Husband
$48,217
17.3%
In order to spend an amount of $278,598 in a period when he had gross income of $360,861, the husband alleges he withdrew funds from his self-managed superannuation fund and borrowed.
The husband says that he made direct financial contributions towards the former matrimonial home by way of body corporate fees, renovations, repairs and maintenance, local authority rates and expenditure on the garden. He further says that in addition to this, some of the money he deposited into the wife’s bank account would have been applied by her on mortgage repayments. He says that he transferred funds to the wife’s account totalling $22,688.71.
In addition, the husband says that he made the following expenditures on things he either asserted or implied remained with the wife:
a)$28,563 for jewellery for the wife;
b)$11,821 for clothing, shoes and wardrobe items for the wife;
c)$22,920 for household furniture, furnishings and artefacts;
d)$4,318 for insurance, registration, repair and maintenance for the wife’s car;
e)$1,695 for clothing, shoes and wardrobe items for the wife’s daughters;
f)$771 towards books for the wife’s daughters; and
g)A high quality three-piece lounge suite and a glass pedestal office table to which a dollar value has not been ascribed.
The wife concedes that the husband paid for clothing costing $8,000, jewellery costing $15,000 and furniture costing him approximately $13,000. However, given the detailed records kept by the husband I prefer his evidence as to the financial contributions made by him in respect of the items set out in the previous paragraph.
In annexure DJH5 to his affidavit of 9 October 2006 the figure said in his affidavit of 6 July 2006 to have been spent on the wife was reduced to $97,804.30. Additionally, in his cross-examination before me, the husband conceded that some expenses were inaccurately allocated or had been erroneously included.
The wife describes her financial contributions during cohabitation as:
a)Monthly mortgage payments of $200 totalling approximately $6,400;
b)Monthly contents insurance payments of $30 totalling approximately $1,100;
c)Monthly internet connection fee of $45 amounting to approximately $1,500;
d)Payment of telephone accounts totalling approximately $1,500 to $2,000;
e)Private health insurance contributions totalling $6,480;
f)Occasional payment of petrol accounts; and
g)Part payment of grocery bills.
The wife concedes that the husband paid for part of the grocery bills and the unit levies. She also says that he gave her two lump sums totalling $8,580 and at one point agreed, presumably subsequently, to put $600 into her account every month.
It is apparent that the wife provided the principal asset, namely the home, and the husband contributed very little in the capital sense at the commencement of cohabitation. On the other hand, the husband paid a much larger percentage of the family expenses during cohabitation than did the wife. It is apparent that the husband’s income during cohabitation was significantly greater than the wife’s and that he made significant expenditures on the family unit made up of himself, the wife and her daughters, in a way which is not reflected in the pool of assets accumulated by the parties. As the Full Court of the Family Court said in Parshen v Parshen (1996) 92-720 at 83,665:
In our view, in the absence of evidence to the contrary, it should be inferred in proceedings pursuant to the provisions of s79 that moneys however received by a party during the course of the parties’ cohabitation, are used by that party for the benefit of all the family unit. Such moneys, in those circumstances, thus constitute a financial contribution by the party who received the moneys.
Convincing contradictory evidence being absent, I find that the husband’s income was a financial contribution to be taken into account.
In his affidavit sworn 6 July 2006 the husband deposes to having the following assets and liabilities at separation:
Assets
a)
DJH Pty Limited savings with ANZ
$E14,400
b)
Household contents
Minimal
c)
Superannuation
$81,000
Liabilities
a)
Credit card debt with ANZ
$E500
b)
Credit card debt with NAB
$E450
In her affidavit of 5 July 2006 the wife describes the husband’s assets at the same time as follows:
a. Some furniture
b. A superannuation entitlement with his self managed superannuation fund
c. Art and collectibles
d. A TV.
In their affidavits of 6 and 5 July 2006 respectively, the parties estimated the wife’s assets and liabilities at separation to be as follows:
Assets
Husband
Wife
a)
Townhouse
Unknown
$380,000
b)
Land in Malta
Unknown
Not supplied
c)
Wife’s savings with ANZ
$E6,000
d)
Investments in Bankers Trust as trustee for her children
$11,000
e)
ANZ account in trust for the children
$25,000
f)
Wife’s PIF savings plan
Unknown
g)
Wife’s Toyota Corolla
$E3,000
$2,500
h)
Wife’s ANZ shares
Unknown
Not supplied
i)
Wife’s household contents
Unknown
Not supplied
j)
Wife’s jewellery and clothing
Unknown
Not supplied
k)
Wife’s superannuation
Approx $17,000
Not supplied
Liabilities
a)
Mortgage over townhouse
$27,700
$28.000
b)
ANZ credit card
$1,100
Not supplied
The parties’ descriptions of the bank accounts held by the wife do not match each other and the way they are set out in the above table reflects this.
For the reasons expressed above in relation to the parties’ evidence concerning their respective assets and liabilities at cohabitation, I prefer the husband’s evidence in relation to their assets and liabilities at the time of separation.
The wife says that during cohabitation she carried out the majority of household tasks including cooking and meal preparation, washing, ironing, cleaning, maintenance and gardening.
The wife says that the husband gave her little assistance in carrying out household tasks and although on some occasions he assisted in the preparation of a meal, he never did the washing or ironing and seldom assisted with cleaning dishes, putting them in the dishwasher or putting them away.
The husband says that he undertook daily household tasks to keep the home clean and tidy, handy man jobs, gardening, organising and supervising renovations, liaising with tradesmen, becoming a member of the body corporate executive committee and administering his own superannuation fund. The husband also says that he assisted the wife with the shopping, supervision of and organising activities with the wife’s daughters, driving the children to activities, helping them with their homework, supervising the children so the wife could undertake her study with the Securities Institute, assisting the wife with letters and resumes for job applications.
In his affidavit of 6 July 2006 the husband deposes to going shopping, participating or organising activities with the children, arranging childcare, collecting and driving the children to and from school on occasion and helping them with homework. He also said that other than the work performed by the housekeepers the wife did most of the cooking while they shared clothes washing and drying and gardening.
In respect of the duties assumed by the housekeeper, annexure DHJ-4 to the husband’s affidavit sworn 9 October 2006 reveals that the first housekeeper received payments between 7 September 2000 and
28 May 2001 and the second housekeeper received payments between 23 April 2001 and 6 December 2001. Therefore to the extent that the housekeepers performed certain duties and were paid for by the husband, this contribution is taken into account in respect of the direct financial contributions already considered in these Reasons.
I find that the parties made equal non-financial contributions to the marriage.
After separation
After separation, the husband went on an overseas trip of approximately three weeks which cost him $6,000. The tickets were acquired using frequent flyer points built up during the marriage. I find that it is not appropriate to add back the cost of this trip. The circumstances which motivated the trip, the death of a friend shortly after the parties separated, satisfy me that this expense was reasonable and not extravagant.
After separation, there was an increase in the value of the wife’s assets in respect of the ANZ Max 1 account and her superannuation to which the husband made no contribution. Similarly, an increase in the value of the husband’s superannuation following separation involved no contribution from the wife.
The funds accumulated since separation by the wife in the accounts said to be trust accounts have already been referred to and are sums to which the husband made no contribution.
Global approach or asset by asset approach
The husband’s counsel submitted that a global approach to contribution would be appropriate and that the husband was entitled to between 35% and 45% of the net assets while the wife’s counsel submitted that an asset by asset approach was to be preferred and the husband’s application should be dismissed. Although in a short marriage such as this one, an asset by asset approach might often be appropriate (see In the Marriage of JG and HJ McMahon (1995) 19 FamLR 99), in the circumstances of this matter, where the contributions were made in significantly different ways and there is the risk that an asset by asset approach would undervalue contributions which are not reflected in a particular asset, I am of the view that a global approach is the more appropriate one to apply: Norbis and Norbis (1985-86) 161 CLR 513.
Proceeding on that basis and assessing the parties’ respective contributions overall, I find that, based on those contributions, the assets of the parties should be apportioned 30% to the husband and 70% to the wife.
Section 75(2)
The husband is now aged 64 and enjoys good health subject to a diagnosis of high blood pressure. He deposes to the fact that he has the physical and mental capacity to engage in gainful employment although his age and duration of unemployment restrict the types of appropriate employment he could pursue. In his affidavit sworn 6 July 2006 the husband expressed the view that the prospects of obtaining suitable work, particularly in his chosen career, are reducing all the time due to his age and he further expressed the fear that once his mother passed away and he felt free to seek employment his employment prospects would be slimmer still.
The wife is 45. Although ostensibly in good health, in her affidavit of 4 October 2006 the wife deposes to having suffered what she describes as cardiac failure and a blockage in her right leg where an artery was too narrow for a stent to be inserted as well as damage to her lungs as a result of a previously unknown episode of tuberculosis. The affidavit of Dr Chan (not his real name) sworn 6 October 2006 annexes his report of 29 September 2006, stating that a CT scan had shown extensive patchy shadowing involving both lungs. A bronchoscopy detected nothing untoward but Dr Chan says the wife should undertake a thoracoscopic lung biopsy to determine whether or not she has “a sinister and possibly incurably lung condition”. Dr Chan expressed the view that the wife’s diagnosis remained in doubt. However, the report of Dr Bilson (not his real name), radiologist, of 24 August 2006 which is Annexure A to the wife’s affidavit sworn 4 October 2006 contains the following comments:
No pleural disease is detected. No abnormalities are detected within the upper abdominal structures.
Comment: Findings most in keeping with chronic interstitial changes within the upper lung fields secondary to previous TB exposure. It is difficult to assess activity and possible reactivation but follow up plain films are suggested.
While there may be some threat to the wife’s health, the evidence adduced does not take that threat beyond a hypothetical level. I am not satisfied that the evidence adduced by the wife in respect of her health is sufficient to conclude that it will have any effect on her capacity to work.
The wife’s career with ANZ has been one marked by progress and promotion. Whether future promotions are likely, I cannot say but the wife’s work history, deposed to by herself, is one characterised by application and I am of the view that she is likely to remain in employment in the future.
The wife has established a de facto relationship with a new partner who contributes $1,000 per month to their domestic expenses. Additionally, as at the date of the hearing both the wife’s daughters by her first marriage were living with her and it was intended that they would continue to do so. The wife does have a responsibility to maintain her two daughters from her first marriage whereas the husband’s care for his mother is voluntary.
I am of the view that no further adjustment of property interests is required by reason of s.75(2).
Just and equitable
Based on the net assets and liabilities set out in paragraph 57 above, the assets held by the husband amount to 78.8% of the pool and the assets held by the wife amount to 21.2%.
To adjust these figures to reflect the apportionment of 30% to the husband and 70% to the wife will require the wife to pay the husband $55,602. On that basis, the husband and wife will have the assets and liabilities set out in the following tables:
Assets to be retained by husband
ANZ savings
$364
Encompass Credit Union savings
$2,984
Furniture and chattels
$1,000
Toyota Corona motor vehicle
$1,000
Superannuation
$129,298
Payment from wife to ensure husband has 30% of assets
$55,602
Total:
$190,248
Assets and liabilities to be retained by wife
Adelaide Townhouse
$370,000
Maltese land
$58,464
Savings account
$882
ANZ Max 1
$40,608
ANZ Dynamic Growth Fund
$3,008
Toyota Corolla
$1,500
ANZ shares
$4,517
Furniture
$10,000
Jewellery
$10,000
Superannuation
$51,596
Mortgage
-$25,261
Credit cards
-$8,500
Equity Access Loan
-$17,300
Payment to husband to ensure husband has 30% of assets
-$55,602
Total:
$443,912
I am satisfied that the apportionment of assets as set out above is just in the circumstances of these proceedings.
Spousal maintenance
The parties have substantially different incomes which reflect a major reversal of the position which obtained during the marriage.
Section 72 requires one party to support another if, and only if, that other party is unable to support herself or himself adequately by reason of the matters set out in the section and having regard to any relevant matter referred to in s.75(2).
In his affidavit sworn 6 July 2006 the husband annexes documents from Centrelink. Annexure DJH-2 to the affidavit is a letter from Centrelink dated 6 March 2006 which indicates that as from 11 April 2006 the husband was to receive $606.10 per fortnight from Centrelink comprised of a carer payment, pharmaceutical allowance and rent assistance. In addition, the husband receives a fortnightly payment in respect of the carer allowance which, according to Annexure DJH-1 was $92.40 per fortnight as at 21 October 2005. Taking into account the telephone allowance referred to in DJH-2, it appears that the husband has a weekly income in the order of $350. In the financial statement of 1 September 2005, the husband stated he then had weekly expenses of $282 of which $120 was rent paid to his mother. In evidence he said he was now paying his mother $100 per week rent.
Importantly, the husband said in evidence that the decision he has made to care for his mother was one made out of affection and loyalty to her and that he gave up high paying employment to do so.
At present, the husband’s income exceeds his expenditure. If this is only by a slim margin, this situation has occurred because the husband has chosen to forgo employment in his chosen profession which has supported him well in the past in order to care for his aged and frail mother. This is the husband’s choice and does not lead me to the conclusion that the husband is unable to support himself adequately.
Consequently, I am not satisfied that the husband has met the threshold criterion for an order for spousal maintenance.
Application for orders under the Federal Proceedings (Costs) Act
On 4 April 2006 this matter was listed for a hearing to commence at 10am on 20 July 2006 at Brisbane. As the submissions dated
17 August 2006 filed on behalf of the wife indicate, on that day the Federal Magistrate who would otherwise have heard the matter was unavailable to do so by reason of circumstances which had not been foreseen. As no other Federal Magistrate was available to hear the matter it was mentioned by the parties’ counsel before Jarrett FM, marked “Not reached” and stood over to 13 October 2006 for hearing.
The parties seek a costs certificate pursuant to s.10(3) of the Federal Proceedings (Costs) Act 1981. That subsection provides:
Subject to this Act, where:
(a)the hearing of any proceedings in a court to which this section applies is discontinued and a new hearing is ordered; and
(b)the discontinuance and new hearing are not attributable to the neglect, default or improper act of any party to the proceedings;
the court may, on the application of a party to the proceedings, grant to that party a costs certificate in respect of the proceedings.
Unless the events on 20 July 2006 amounted to a discontinuance of a hearing, the Court may not grant a costs certificate pursuant to s.10(3).
The meaning of “discontinued” in the context of s.10(3) was discussed by Guest J in Ward v Schembri (2005) 33 Fam LR 546. In that matter, his Honour, after considering previous judgments dealing with the issue, expressed his agreement:
… with Muirhead J in Morris v Maroudas that the noun “discontinuance” (s.10(3)(b)) has a well-established meaning, envisaging the “cessation of something that was on foot”: see also Reeves v Reeves (2002) FamCA 658 per Carter J. It has its own origins derived from late middle English, in the sense “interrupt, disrupt”: Oxford Dictionary of English. The same analysis is equally, and for obvious reasons, applicable to the adjective “discontinued”: s.10(3)(a). It conveys something having “commenced and then ceasing prior to its conclusion”: per Kiefel J in Forest’s case. It is plain to me that before an event can be discontinued it must be underway, commenced or set in motion ...
In my view, and with due respect to what Purdy J had to say in Lindner, a hearing cannot be said to have commenced in circumstances that merely addressed the issue of priority. The mere announcement by counsel of their appearance on the day notified for trial is insufficient to conclude that, for the purpose of s.10(3) of the Act, the proceedings had commenced in the sense intended by statute. I further agree with Muirhead J in Morris v Maroudas that it would place an interpretation upon the subsection that would have wide ramifications and place undue strain upon the wording of the subsection in a manner contrary to its legislative intent. For the same reason, I am in disagreement with the approach of Higgins J in Re Palmdale Insurance. (at 553, [26], [27])
His Honour concluded at 554 [31]:
The provision of a certificate pursuant to the Act is a benefit provided by the statute, but on conditions and in circumstances whereby a hearing has been “discontinued”. It is plain that, for such an event to occur, it must have commenced, in my view, in a real and litigious sense, and not just by way of mention by reason of a prior supervening event or discussion arising from judicial availability. I agree with Kiefel J that the word “discontinuance” does indeed have a “well established meaning”, namely, that it “conveys something having commenced and then ceasing prior to its conclusion”.
I find that these proceedings were not commenced in a real and litigious sense on 20 July 2006. With the unexpected unavailability of the Federal Magistrate to whom the matter had been allocated for hearing, the matter was simply called on before Jarrett FM for directions. As a result, the essential prerequisite for the granting of a costs certificate pursuant to s.10(3) has not been satisfied with the consequence that the parties’ respective applications for certificates in their favour must be dismissed.
Conclusion
In this matter, the orders of the court will be that within 60 days of the date of these orders the wife pay to the husband by way of property settlement the sum of $55,602, that there be no alteration to the interests of the husband or wife in their respective superannuation funds, that the parties retain all items of property currently in the possession or control of each of them respectively, that the husband’s application for spousal maintenance be dismissed, that the parties’ applications for orders under the Federal Proceedings (Costs) Act 1981 be dismissed and that the parties have liberty to apply on three days’ notice in respect of the implementation of these orders.
I certify that the preceding one hundred and fifteen (115) paragraphs are a true copy of the reasons for judgment of Cameron FM.
Associate: Angela Chong
Date: 12 March 2007
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