HADSALL & HADSALL
[2020] FCCA 1891
•23 July 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HADSALL & HADSALL | [2020] FCCA 1891 |
| Catchwords: FAMILY LAW – Long marriage – parties separate in 1999 – after separation wife retains control of and possession of most of husband’s disability pension until 2014 – significant inheritances by the wife post separation through her inheritances – husband seeking to secure permanent housing in modest former matrimonial home in his senior years – husband now aged 77 and the is wife aged 70 – husband has poor medical and psychiatric health – wife in a current de facto relationship – consideration of proper approach given inheritances and 20 years passing between separation and trial – balancing just and equitable considerations – wife seeks to retain all of her inherited property and 40% of the former matrimonial home and half the husband’s pension – husband seeks to retain the former matrimonial property and his disability pension. |
| Legislation: Family Law Act 1975 (Cth), ss.75(2), 79 |
| Cases cited: Calvin & McTier [2017] FamCAFC 125 C & C (2005) 33 Fam LR 414 In the Marriage of Hickey (2003) FLC 93-143 Ferraro and Ferraro (1993) FLC 92-335 Bevan & Bevan [2013] FamCAFC 116 Stanford & Stanford (2012) FLC 93-495 Holland & Holland [2017] FamCAFC 166 Norbis v Norbis (1986) FLC 91-712 Cahill v Cahill [2003] FamCA 172 Jones &Jones (1009) FLC 92-143 Thynne and Madison [2007] FamCA 558 Zaruba & Zaruba [2017] FamCAFC 91 Bonnici & Bonnici (1992) FLC 92-272 Dickons & Dickons (2012) 50 FamLR 244 |
| Applicant: | MS HADSALL |
| Respondent: | MR HADSALL |
| File Number: | BRC 9285 of 2017 |
| Judgment of: | Judge Willis |
| Hearing dates: | 6 & 7 November 2019 & 26 June 2020 |
| Date of Last Submission: | 7 November 2019 Further submissions, 26 June 2020 |
| Delivered at: | Cairns |
| Delivered on: | 23 July 2020 |
REPRESENTATION
| Counsel for the Applicant: | Mr Gardiner |
| Solicitors for the Applicant: | Bradley Munt & Co |
| Counsel for the Respondent: | Mr Jacobs |
| Solicitors for the Respondent: | Danielle D Hodgens Lawyer |
ORDERS
By way of full and final property settlement, the husband is to pay to the wife the sum of $69,154.00 with respect to her interest in the property at B Street, Suburb C, Queensland being the whole of the land more particularly described as Lot ... on RP ..., Title Reference ... (“the former matrimonial home”).
The said sum of $69,154.00 is to be paid by the husband to the wife by way of:
(a)An initial payment of $10,000.00 within 21 days of the date of these orders followed by consecutive monthly payments on the first day of each month in the sum of $1,478.85 until such time as the said $69,154.00 has been paid to the wife in full NOTING THAT the husband is permitted to make any earlier repayments or earlier repayment in full at his discretion.
(b)In the event that the husband pre-deceases the wife, should any funds remain owing to the wife, the former matrimonial home is to be sold and the debt for the balance owing is to be paid to the wife out of the sale proceeds.
Contemporaneously with the initial payment referred to in Order 2(a) herein the wife is to do all acts and things and sign all documents necessary to transfer to the husband, at the expense of the husband, all of her right, title and interest in the former matrimonial home. Thereafter, the husband will indemnify and keep the wife indemnified in respect of all liabilities associated with the former matrimonial home.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession and/or control of such party as at the date of these orders. The chattels in the former matrimonial home are deemed to be in the possession of the husband;
(b)Each party forego any claims they may have to any superannuation or pension benefits belonging to or earned by the other;
(c)Insurance policies remain the sole property of the owner named therein;
(d)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled to pursuant to these orders;
That each of the parties shall do all acts and sign all necessary documentation to give effect to the terms of these orders. In the event that either party refuses or neglects to sign (within fourteen (14) days of a written request to do so) any document necessary to effect the terms of these orders, the Registrar of the Federal Circuit Court of Australia is hereby appointed pursuant to section 106A of the Family Law Act 1975 to execute such documents on behalf of such party.
Costs
Any party seeking costs is to file and serve written submissions addressing the relevant sections 117(1) and (2) of the Family Law Act and enclosing any relevant evidence of written offers and provide a minute of Orders sought on the relevant scale, within 21 days of today’s date.
The Respondent to an Application for costs is to file and serve written submissions in response addressing the relevant sections 117(1) and (2) of the Family Law Act and enclosing any relevant evidence of written offers and provide a minute of Orders sought on the relevant scale, within 21 days of being served.
After each party has provided their written submissions, within 7 days of the final submissions, each party is to indicate if they require an oral hearing or if they are content to have the matter heard on the papers and in Chambers.
The Court will then consider whether or not the submissions are sufficient to proceed to determine the costs application on the papers in Chambers or alternatively if the matter will be listed for oral submissions.
Other Orders
Save and except for any costs applications, all outstanding applications be removed from the pending cases list.
IT IS NOTED that publication of this judgment under the pseudonym Hadsall & Hadsall is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT CAIRNS |
BRC 9285 of 2017
| MS HADSALL |
Applicant
And
| MR HADSALL |
Respondent
REASONS FOR JUDGMENT
Background
The wife Ms Hadsall (“the wife”) was born in 1949 and is aged 70 at the time of trial and the Husband Mr Hadsall (“the husband”) was born in in 1942 and is aged 77. Both parties are now retired. They have two adult children who are both married and financially independent.
The parties commenced living together in 1974 and married in 1974. Their marriage continued for some 25 years. They separated in 1999. They are not yet divorced.
At the time of marriage, the wife was employed as a public servant until the arrival of their first child in 1981 when she said she was obliged to surrender her employment due to policies at the time regarding women giving up work when they wished to start a family. The husband was employed by the Employer D as a Professional. The wife remained at home raising the children and looking after the family.
In 1993 the husband received an inheritance estimated at around 28,000 English pounds which seemed to remain in an account in the E Bank in England until it was withdrawn by him 18 years post separation and gifted to his brother.
The husband became ill around 1992. In the next 3 years he was unable to work. The wife took up work as best she could doing cleaning and ironing for other families through casual work in this 3 year period. From 1995 the husband received a disability pension (the husband’s disability pension) as a result of his Super Fund F being converted into a disability pension (the husband’s disability pension) at the request of the parties. From 1995 onwards it was deposited into their joint account numbered ...01 (the joint account). Importantly, the joint account was operated by a passbook which the wife retained.
From 1995 onwards the wife operated the joint account as if it was her personal account. This continued after separation in 1999. The husband did not access that account again until 4 August 2014.[1]
[1] Agreed fact and wife’s affidavit.
During their marriage, the parties had also established a contingency fund held with the ANZ Bank for emergency purposes. The wife continued to have access to both accounts notwithstanding their separation.[2]
[2] Paragraph 22 wife’s trial affidavit.
Prior to separation the family lived on the regular income from the husband’s disability pension which replaced his work income.
The parties separated in 1999.
The former matrimonial home at B Street, Suburb C (the former matrimonial home) was unencumbered at that time.
The wife moved out of the former matrimonial home and straight into the home of Mr G. She took the parties’ youngest son Mr H then aged 14 with her. Their eldest child Mr J was 18 and moved away to attend University.
The husband’s illness was ultimately diagnosed as Schizophrenia after separation.
Significantly when the wife left the marriage and moved in to live in a de facto relationship with her new partner Mr G in 1999, the wife took with her the passbook for the joint account and thus control of the husband’s disability pension.
The wife retained control of the husband’s disability pension fund from separation in 1999 until 4 August 2014.
The manner in which the wife gave evidence about paying the cost of the insurance and rates on the former matrimonial property post separation could create the impression that post separation she has paid such expenses from her own funds. Similarly when the wife paid the cost of the husband’s health insurance plus other costs “for the family” what the wife really means is that she physically paid those bills, but the funds came directly from the husband’s disability pension income.
The wife’s affidavit reads;
“Notwithstanding the fact that I have not lived in the former matrimonial home since separation I have paid house and contents insurance on such property until the 3rd April 2017 and house insurance only from that time.”[3] Another paragraph reads, “I say I have also paid for the Respondent’s private health insurance from about 2002 until 3 April 2017.”[4]
[3] Affidavit efiled 11 July 2019, paragraph 24.
[4] Affidavit efiled 11 July 2019, paragraph 20.
The wife gave oral evidence in the same manner.
The case outline prepared for the wife follows this theme stating;
“1992-4/8/14 Applicant pays recurring household expenses in respect of the former matrimonial home from the joint account in the names of both parties.”
There are other similar entries.
The facts however are that from separation in 1999 until the husband managed to sever the wife’s access to his disability pension in August 2014, the wife used the husband’s disability pension to pay the rates and the insurance on the former matrimonial home and the husband’s private health insurance. The wife also used the bulk of the husband’s disability pension as her own income until the husband managed to get control of the pension with the help of his son Mr H and his daughter in law Ms K.
On 4 August 2014 without the wife’s consent, but with the help of his son Mr H and daughter in law Ms K, the husband took control of his finances. The husband withdrew $42,000.00 from the joint account balance of $82,112.03 leaving the balance of $40,112.03 for the wife. He deposited the withdrawn funds of $42,000.00 into his own newly established ANZ debit account ...92 (the husband’s debit account).
The husband also authorised Super Fund F to deposit all future disability pension monies into his debit account however, he authorised a fortnightly withdrawal of half of his disability pension to the joint account for the wife’s use. Half of the pension was $928.00 at that time.
On 1 May 2017, the husband altered arrangements again and this time he ceased paying the wife one half of his disability pension. The final fortnightly payment was made to the wife on 1 May 2017. On 8 May 2017, the husband withdrew the balance of his pension fund sitting in the joint account of $7,945.72. The joint account was closed by the wife on 30 October 2017.
Significantly, during those years 1999 to August 2014, the wife paid the husband only a small portion of his disability pension. As will be explained in this judgment, overall the wife paid approximately 34% of the husband’s disability pension to the husband. The wife retained control of the balance of the husband’s disability pension, namely around 66% of it. The difference between what the husband received and what the wife received over that long period amounts to hundreds of thousands of dollars.
The husband’s disability pension varies slightly in the fortnightly amount but is currently at the time of trial approximately $1,800 to $2,000 per fortnight, or $3,800 to $4,000 per month or around $48,000.00 per annum.
When the wife was in control of the disability pension the wife paid the husband the somewhat meagre amount of $3,000 each six months or $6,000 per year.
Following her separation from the husband in 1999, the wife received two inheritances.
The first was from her de facto partner Mr G. When the wife moved in with Mr G in 1999 he had inherited the estate of his own mother, Mrs L.
In 2011, twelve years after the wife moved in with Mr G, Mr G passed away. The wife was the sole beneficiary of the estate of her de facto husband Mr G.
The wife inherited an estate worth $1,462,365.40. It included:
a)An unencumbered home at M Street, Suburb N valued at $750,000;
b)An unencumbered home at O Street, Town P valued at $275,000;
c)Funds with Super Fund Q and Super Fund R of $239,783;
d)An allocated pension from an investment fund with Super Fund S with a balance of $182,252.
At this time the wife continued to receive and have sole access to the full amount of the husband’s disability pension. The wife continued transferring $3,000 to the husband every six months from the joint account into which the husband’s disability pension was deposited.
The wife retained the balance of the husband’s disability pension. From this amount she paid the rates and insurance for the former matrimonial home in which the husband lived and his health fund. The husband was in effect, paying for the insurance, rates and health insurance, not the wife. The balance of the disability pension funds remained under the wife’s sole control.
Twelve months on from the death of Mr G, the wife commenced a second de facto relationship with Mr T in 2012. He lives in Suburb U and the wife moved in to his home. They remain in that de facto relationship at the time of trial.
In 2012 the wife gifted the home she inherited at M Street, Suburb N to her son Mr H and his wife Ms K. The house was worth $750,000.00. It was subsequently sold by Mr H and his wife for $1,055,000.00.
In 2012 the wife and her de facto husband Mr T entered into a Binding Financial Agreement.[5]
[5] Exhibit H3.
In 2014, the wife’s mother Ms V passed away and the wife was a major beneficiary of her will. The wife inherited another estate worth approximately $235,000.00.
Around this time the wife and Mr T had conflict revolving around what Mr T referred to as the wife’s suspicions he was only after her money and his strong belief at that time that the wife was preoccupied with money, rather than relationships. They resolved the issues they were having with the wife stating that her children caused her to doubt the motives of Mr T back then. The wife and Mr T remain in their de facto relationship at the time of trial and the wife says that Mr T is a wonderful man of good standing and good judgment.
The husband also took legal steps in January 2017 to have the joint tenancy on the former matrimonial home changed to tenants-in-common with each party hold an equal interest. He did not ask the wife’s permission to do this, but gave her notice of him doing it.
The husband has not re-partnered. The wife remains in her de facto relationship with Mr T, who is a former colleague of the husband.
Their two children Mr H and Mr J are aged 38 and 34 at the time of trial. Both are married and live independently.
Mr H and his wife were required for cross examination at the trial.
The Wife – Orders sought
The wife in her initiating application filed on 4 September 2017[6] sought orders that the former matrimonial home situated at B Street, Suburb C be forthwith listed for sale and the net sale proceeds be divided equally between the applicant and the respondent. The wife proposed a superannuation split of the husband’s interest in Super Fund F of 50% of the fortnightly amount.
[6] But not served until March 2018.
The wife proposed that she retain all of her remaining inheritances and financial resources for her own use.
During the trial, I suggested to Counsel and the parties that there might be some other arrangement that could be put in place that could see the husband retaining stability in his housing, given he was aged 77 and the wife aged 70 had various other houses and was living with her de facto partner Mr T in Suburb U. I suggested perhaps an arrangement whereby the husband had a life interest and that when he could no longer live in the former matrimonial home, then the property could be sold could be one such an option.
Subsequently the wife took on this suggestion and her position changed once the trial started. Whilst the wife had sought the sale of the former matrimonial home, the wife gave evidence that she did not wish to see the husband homeless. The wife proposed that Orders be made whereby the husband remains in the former matrimonial home but that he has a life interest in her interest as a tenant in common in the former matrimonial home. The proposal was that upon the death of the husband, the property would be sold and the proceeds divided equally between the husband and wife or in such manner as the court shall determine.
In addition to retaining one half of the former matrimonial home and one half of the pension, the wife seeks to retain all of her properties and investments received through her inheritances.
Subsequent to the final submissions being made and the matter reserved, I considered that another option, which gave more finality to the property affairs of the parties involved the wife transferring her interest in the former matrimonial home to the husband and the husband paying out the wife her interest over a period of time, say five or so years. Such an order would provide that upon the husband’s death the house would be sold if funds were still owing to the wife and any funds not paid to the wife were to be paid to her as first priority out of the sale proceeds.
I wrote to the parties on date in May 2020 and advised them of this option which had not been raised at trial and sought their further submissions. When I contacted the parties, I noted that despite writing two letters to the Superannuation Trustees, the solicitor for the wife was still not in a position to confirm that procedural fairness had been afforded to the Fund. The solicitor was to do this within 28 days following the trial.
I also noted that the solicitors for the wife had not yet provided the Court with a fully particularised minute of final orders sought, to include all the assets not just the Superannuation, which had been requested by the Court prior to the conclusion of the trial.
In writing to the parties, I was also aware that in their final addresses, whilst each Counsel made broad submissions about the property division neither Counsel had dealt specifically with the figures in terms of the entire property pool or how much in dollar terms each party would receive.
The husband’s supplementary submissions did not deal with the issue of the other final option posed by the Court being the wife transferring her interest to the husband, and the husband paying out the wife a lump sum, paid over a period of years with any balance due to the wife being paid from his estate if the husband predeceased the wife. On receiving their further submissions by June 2020, I contacted the parties again to let them know that further oral submissions would be required clarifying their earlier submissions.
Those final submissions were set down for the 26 June 2020 to accommodate each Counsel’s other court commitments. That court event took place through use of Microsoft Teams given the Pandemic conditions and restrictions applying.
Final submissions of the wife
The wife asks through her Counsel’s final submissions made on 26 June 2020 to the Court for an Order that the husband pay to the wife the sum of $114,000.00 in exchange for her interest in the former matrimonial home which is said to be 40%. Broadly the figure of 40% for the wife is arrived at by Counsel for the wife submitting that the wife is entitled to 30% - 35% interest in the former matrimonial home based on her contributions during the marriage and beyond, and that the wife is also entitled to an uplift factor for the section 75(2) matters of 5% to 10% as is the husband. Those factors were identified as the wife being 70 years of age and having various ongoing general health issues.
The payment to the wife is to occur by way of an initial payment of $20,000.00 within 14 days followed by consecutive monthly payments of $1,566.66 until the sum has been paid in full. Mr Gardiner of Counsel agreed that the wife’s proposed orders should include a clause that if the husband predeceases her, that upon his death the home is sold and any balance owing is payable to the wife from the sale proceeds. The final proposed Orders for the wife also request that the husband’s Super Fund F disability pension be split and that the wife receive one half.
Mr Gardiner submits that the wife should retain all of her inheritances as the husband has not contributed to those assets. Those inheritances are seen in the agreed pool with a value of $705,646.00.
Mr Gardiner also submits that the value attributed to the wife’s Super Fund S[7] which operates as an annuity paying the wife $177.00 per week and which is included in the asset pool with a value of $170,621.00 should not have its capital value included as an asset of the wife. Mr Gardiner submits that the Court should regard this investment fund as having a nil value, as the value of the pension fluctuates, unlike the husband’s disability pension which is a defined benefit fund and the value to the wife’s investment fund is effected by the rise and fall of the share market.
[7] Also known as the Super Fund S Pension Manager exhibit W1.
It is also submitted that the Court will not be satisfied that the husband has made full disclosure about the amount of his inheritance remaining and the movement of money from the E Bank account in England into which the inheritance was placed. Further Mr Gardiner says the husband gave away $100,000.00 to his brother in 2017 and that the court could not be satisfied that the source of this money and or the balance remaining was properly disclosed.
Counsel submitted if the Court declined to make a splitting order in favour of the wife for 50%, this was all the more reason to award the wife a 40% interest of the former matrimonial home.
Mr Gardiner highlights that the husband’s schizophrenia is managed by the public health system at no cost to the husband. It is submitted that the husband’s cardiac specialist gave evidence that the husband’s condition is stable following on from his triple bypass. Counsel for the wife says that the husband lives a modest lifestyle in a small community in the Region W implying his needs are very modest.
The Husband – Order sought
The husband in his amended response filed on 10 August 2018 sought orders for the wife to transfer her interest in the former matrimonial home to the husband and that each party otherwise be solely entitled to all other possessions in their control. That includes the husband retaining his disability pension. The former matrimonial home is valued at $285,000.00. At the time of trial, the full disability pension was worth $2,043.00 per fortnight.[8]
[8] Husband’s Affidavit 4/9/19 para 46 (e) Super Fund F.
In his further submissions on 26 June 2020 Counsel for the husband reiterated that the husband should retain the former matrimonial home and his pension and that it would be unjust and inequitable for the wife to retain all of her inheritances and also one half of the former matrimonial pool and one half of the husband’s disability pension. Mr Jacobs says the disparity in what each will retain is vast and the wife’s proposal does not properly acknowledge the husband’s contributions. Mr Jacobs points to in particular to the post separation contributions made by the husband namely that the husband’s disability pension has paid for his health cover and the rates and insurance for the former matrimonial home which the husband lived in. The wife did not fund these expenses. Mr Jacobs also submits that given that the husband only received $270,000[9] in the post separation years from his own disability pension as compared to $521,516.08 of the husband’s disability pension received by the wife, that this amounts to a considerable contribution made by the husband to the financial support and advantage of the wife.
[9] Actual amount $267,686.93 Annexure H3 of the husband’s affidavit.
Mr Jacobs of Counsel has submitted that all of the assets of both the parties are included in the asset pool relying on the authority of Calvin & McTier [2017] FamCAFC 125. Mr Jacobs submits that the definition of matrimonial cause and section 79 in Calvin & McTier refers to all of the property held by the parties at the time of the hearing before the Court. This was in response to the early submissions made on behalf of the wife, orally and as outlined in her original case outline that the inherited assets ought not form part of the property pool.
Mr Jacobs of Counsel has adopted a global approach in determining the contributions to the property division, relying upon the method adopted in Calvin & Mc Tier of adding up all of the assets in the agreed asset pool and apportioning the division between the husband and wife based on their respective contributions to that pool which includes the inherited assets.
Counsel for the husband concedes that the wife has made a direct and greater financial contributions given her significant contribution of post separation inheritances, as compared to the husband. The agreed asset pool totals $1,076,110.00.[10]
[10] Plus the pension which has been treated as an income stream throughout this litigation.
The total of the wife’s inheritance is $705,646.00. Dividing that sum by $1,076,110.00 (the total asset pool) results in 65.57% to 66% of the total asset pool consisting of the wife’s inheritance.
Mr Jacobs submits that up to the point of separation, the respective contributions of the husband and wife would be found to be equal.
Mr Jacobs submits that the husband’s contribution to the overall asset pool would amount to 20%.
To that figure of 20% and in turning to the relevant section 75(2) factors, Counsel for the husband adds a further 15% for the husband’s section 75(2) factors being his age at 77, the fact that he will not work again and has no other source of income and the husband has had most of his disability pension from 1999 to 2014 taken by the wife. Thereafter for 3 years until May 2017, the wife still received one half of the husband’s disability pension.
As to the husband’s health, it is submitted that he has a significant mental health diagnosis of schizophrenia and has had serious cardiac problems resulting in his quadruple bypass in 2016.
As to the wife receiving most of the husband’s disability pension in total from the years 1999 to May 2017, Mr Jacobs submits that this is a significant issue to be considered as part of arriving at a just and equitable division. The wife received approximately $521,000.00 of the husband’s disability pension over 15 years until 2014, and one half of the pension was still received by the wife until May 2017. Importantly, the post separation funds retained by the wife have not all been accounted for by the wife.
The husband occupied the former matrimonial home, but the insurance and rates each year on the former matrimonial home, and the husband’s health insurance were all paid with the husband’s money. It is submitted that these factors result in the husband being entitled to a 15% uplift. Mr Jacobs accepts that the uplift comes out of the whole pool, including the wife’s direct contributions, but submits that there is authority for this in Calvin and McTier and that the wife’s contributions are not immune from being distributed between the parties. That uplift added to his contributions bring the husband’s interest to 35% of the asset pool which it is submitted is a just and equitable distribution.
In real terms that percentage translates into the husband retaining the former matrimonial home valued at $285,000.00 together with the other assets in his possession as set out in the asset pool.
Mr Jacobs also proposes that the husband should retain his disability pension given the disparity in the parties’ respective wealth. It is submitted that the wife could generate more income if she wished to do so for example by putting put a tenant into the empty home she owns which was inherited at O Street, Town P to generate some income or alternatively sell it and invest the proceeds.
The wife already has an investment account with S Bank which results in the wife receiving a pension of $177.00 per week and considerable cash reserves of a term deposit with the ANZ of $182,252.00, S Bank cash management of $50,300, and the S Bank investment at $170,621.00.
It is submitted that the wife is now in a comfortable de facto relationship for its 8th year, and that she is being supported financially by Mr T who has assets and an income and Super Fund F which enables them to travel overseas and lead a finally secure existence.
It is also submitted that the wife was wealthy enough to give away a home worth $750,000.00.
Counsel for the husband submits that as to the wife’s proposal of keeping all of her inherited assets which total $705,646.00 plus receiving 40% of the former matrimonial home at $114,000.00, results in the wife retaining $819,646.00. The wife would therefore receive 76% of the entire pool. The husband would receive about 24% of the property pool. From that figure husband would also still have to pay out the $114,000.00 to the wife from the assets he retained, thus reducing the value of what he actually retains by $114,000.00 and reducing his percentage to 23.8%.
The husband has sought an order that the wife pay the husband’s costs of and incidental to this application.
In his supplementary submissions the husband conceded that if the Court was to award the wife an interest in the former matrimonial home, that the husband would prefer to have the wife transfer her interest in the home to the husband and the husband to pay her a lump sum, by way of periodical repayments as set out in the wife’s orders, as opposed to a declaration as to how their respective interests were held in the former matrimonial home and the husband receiving a life interest.
Both Counsel therefore supported the proposal of having finality for each of their clients in having the husband payout the wife her interest in the former matrimonial home, albeit the husband’s primary position is that he ought not be ordered to pay any further funds to the wife.
The Law
In this matter I am required to follow the approach to property division set out in various authorities and described as a four step process in cases such as C & C (2005) 33 Fam LR 414; In the Marriage of Hickey (2003) FLC 93-143 and Ferraro and Ferraro (1993) FLC 92-335. The four step approach is to first determine the pool of assets and liabilities, then evaluate each of the parties’ financial and non-financial contributions during the marriage and post separation, determine if that contribution figure requires adjustment in light of the relevant section 75(2) factors and finally to consider whether the proposed result is just and equitable in all of the circumstances having regard to the actual result in real terms.
As the Full Court (Bryant, CJ, Finn & Thackray JJ) noted in Bevan & Bevan [2013] FamCAFC 116 at [65] although the High Court in Stanford & Stanford (2012) FLC 93-495 did “not disapprove the four step process, we accept it was not approved either.” However it is clear that after an identification of the existing property interests (as determined by common law and equity), the Court is required to consider under s.79(2) whether it is just and equitable to make an order at all.
Also I had regard to cases referred to by Mr Jacobs of Counsel for the husband involving the appropriate treatment of post separation inheritances. I am referred to Calvin & McTier [2017] FamCAFC 125 and Holland & Holland [2017] FamCAFC 166.
I have also had regard to the decisions in relation to the varying approaches to dividing an asset pool in terms of an asset by asset approach or global approach as referred in in Norbis v Norbis (1986) FLC 91-712; Cahill v Cahill [2003] FamCA 172.
I understand that the global approach is the most popular method adopted under the Family Law Act which involves examining the assets on a global view of either or both of the parties and determining an overall contribution of each party, as opposed to the asset-by-asset approach which involves determining the interests of each party in each asset or group of assets.
In this matter the parties have each adopted different methods to the property division.
A feature in this matter is that there is a 20 year period between the parties’ separation in 1999 and the trial in 2019. During that time one of the parties, the wife, has built up significant assets through two inheritances. The asset the parties jointly owned was the former matrimonial home which the husband remained living in. His pension paid for the costs spent on the former matrimonial home, namely insurance, and rates. The wife has not paid towards the post separation costs or upkeep of the former matrimonial home which was unencumbered at the time of separation.
I will now turn to the first step which is to identify the assets and liabilities.
Step 1 – Determining the assets and liabilities
Asset Pool
In accordance with the agreement between the parties as shown in exhibit H1 the parties have agreed the following assets represent the asset pool at trial.
| Husband | Value | Wife | Value |
| 1. B Street, Suburb C (joint asset) | $142,500.00 | 1. B Street, Suburb C (joint asset) | $142,500.00 |
| 2. E Bank account (inheritance) | $52,300.00 | 2. O Street, Town P (Inherited) | $275,000.00 |
| 3. ANZ Bank account | $29,664.00 | 3. Cash in Super Fund Q | $2,317.00 |
| 4. Motor Vehicle | $1,500.00 | 4. Cash ANZ | $13,156.00 |
| 5. Furniture | $2,000.00 | 5. Term Deposit with ANZ Bank | $182,252.00 |
| 6. S Bank cash management | $50,300.00 | ||
| 7. S Bank investment | $170,621.00 | ||
| 8. Motor Vehicle 1 | $2,000.00 | ||
| 9. Motor Vehicle 2 | $1,000.00 | ||
| 10. Household contents | $6,000.00 | ||
| 11. Jewellery | $3,000.00 | ||
| Husband’s total | $227,964.00 | Wife’s total | $848,146.00 |
| TOTAL ASSETS | $1,076,110.00 | ||
| Superannuation/ Pension | ||
| 1. Husband’s disability pension – one half. | Husband | $1,021.87 |
| 2. Wife’s income stream[11] (inherited) | Wife | $170,621.00- $177.00 per week. |
[11] Transcript.
The abovementioned table represents an agreed asset pool.
The Wife
The wife is a bright, forthright and confident woman. Unfortunately, the evidence did not support her version of events in regard to a number of issues. The wife had a tendency to make comments and whisper loudly in Court when she did not agree with what was being said or trying to get her views before the Court even though she was not in the witness box.[12] I had the impression the wife has quite a forceful and irrepressible character and in that sense, is quite different to the husband who is a considered and quieter person.
[12] Transcript 7.11.19 p. 211, line 10 onwards.
The wife explained that at the time of separation she moved out of the former matrimonial home and straight in to the home of Mr G taking her son Mr H with her. The wife said she knew Mr G as he was a former boyfriend of hers from back in the 1960’s. The wife said her subsequent and current partner Mr T was also a former boyfriend from the 1960’s.
The wife recalled meeting up again with Mr G when she heard that Mr G’s mother had died. The wife attended the funeral of Mrs L as the wife had known her when she was going out with Mr G.
From then on the wife and Mr G became friends again. The wife said that she had discussed with Mr G the stress she was living under with the husband given his deteriorating psychiatric health. The wife said it was stressful at times living with the husband with his deteriorating mental health and that she left the husband and moved straight in with Mr G in 1999.
The wife gave evidence that when she moved in with Mr G, the funds she paid for herself and Mr H to cover their weekly costs, ($50.00 each) for her contribution of food came from the funds she received from the husband’s pension. This is what the wife refers to as part of her spending the money she retained from the husband’s disability pension “for the family”. Mr H had moved out of the home of Mr G by 2002. Mr J was at university and receiving Centrelink benefits since back at separation in 1999.
The wife said she paid for excursions or trips to Country X or Country Y for Mr H. Mr H moved out of living with his mother and Mr G when he was aged 17. I am satisfied that any funds that were spent by the wife on these expenses came from the funds she had in the joint account, the sole source of which was the husband’s disability pension. Mr H recalled that he had funds from his various jobs. At that time he was 18 and he did not require financial assistance for the Country X trip. As seen elsewhere in this judgment, I accept his evidence.
Similarly any funds that were spend on paying the levy at Z School, came from the husband’s disability pension. Similarly the funds for insurance, rates for the former matrimonial home came from the husband’s disability pension. Whether the wife purchased a car for Mr H when he left school for $3,000.00 or spent $3,000.00 on an engagement ring for her daughter in law (Mr H then aged about 28) the funds came from the husband’s disability pension. The wife just stated over and over in her evidence that she paid such expenses giving the impression that she believed she had made this financial contribution from her own money.
The husband received 34% of his pension and the wife received 66% up to 2018. The wife stated under cross-examination that she used this 66% “for family purposes, to look after the family.”[13] I reject this evidence. This proposition is unsupported by the evidence.
[13] Transcript 7.11.19, p. 125, line 45.
The wife has not paid these costs from her own post separation funds, as implied by her in her case outline and oral evidence. I do not accept these payments made from the husband’s disability pension to the former matrimonial home, or money spent on the last year or so of Mr H’s schooling, represent a contribution by the wife. The source of her funds has been the husband’s disability pension.
The wife stated in her affidavit of 4 September 2017, “I continued to access these accounts notwithstanding my separation from the respondent until 4 August 2014 including paying from such account recurring household expenses such as rates and insurance with respect to the former matrimonial home.”[14]
[14] Affidavit of the wife of 4 September 2017, paragraph 14.
It was suggested to the wife that once she set up the joint account for the husband’s pension to be paid into during the marriage, that thereafter she regarded the joint account as her own account including the post separation years. The wife emphatically denied that this was the case:
“You agree with me that you operated this account as if it was your own personal account? – No, I do not. I refute – refute that completely.
Madam, in paragraph 15 of your affidavit, that is affirmed 15 August 2017 and filed on 4 September 2017, you say this: In 2012, I moved from City AA to Brisbane, and on 4 August 2014, the respondent withdrew $42,000 from the joint account –
And then you give the number of that account:
…leaving a balance of $40,112 and reduced the payment from his pension by 50 per cent from 1,858.67 to $928. I continued to operate this account as if it was my personal account. The respondent never accessed that account again, until 21 April 2017.
Is that evidence true or untrue? – I may have said it, but it’s untrue.”[15]
[15] Transcript 6.11.19 page 67, line 40 to page 68, line 10.
I am satisfied that the wife has regarded the husband’s disability pension as her own personal income in the post-separation period up until the husband’s intervention in August 2014.
It was never explained by the wife as to why she gave the husband so little of his own pension. The husband retired on the grounds of work place stress and was then deemed eligible to change his Superannuation to a disability pension and subsequently diagnosed with schizophrenia. He lives with that condition which is medically managed, though, as seen in 2017 can re-emerge as it did when he was given heart medication which lessened the effect of his regular psychiatric mediation. The husband lives with a mental health disability. The husband said he did not ask the wife to pay his medical insurance, that he was content with the Medicare only. The amount paid to him each week, was so modest as to be unjustifiable.
When the wife was asked about the totality of the pension paid since separation in 1999 and “what did you do with the rest of the funds” the wife answered “I paid for the family.” When pressed to provide some specifics as to how she spent the balance of the $521,516.00 retained by her of the husband’s disability pension over that 15 years, the wife could not provide any particularised evidence nor satisfactory explanation except to say she spent money on the family”.
The wife said at paragraph 24 of her trial affidavit:
“I say that notwithstanding the fact that I have not lived in the former matrimonial home since separation I have paid house and contents insurance on such property until 3rd April 2017 and house insurance only from that date until the present time.”
As can be seen, the wife does not acknowledge the source of the money she used.
I reject the wife’s position as she suggests, that she alone contributed to the rates and the insurance and paid considerable funds “to the family”. It is inconsistent with the evidence. The wife retained the bulk of the husband’s disability fortnightly pension, even allowing for funds that were drawn from the husband’s pension to cover the insurance and rates on the former matrimonial home which he resided in.
It was only on 4 August 2014 with the help of Mr H and Ms K that the husband regained control of the joint account. The husband then split the balance of the funds sitting in the account as at that date. Those funds came from his own disability pension. The husband withdrew $42,000.00 leaving the wife $40,112.00.[16]
[16] Wife’s affidavit filed 4 September 2017, paragraph 15.
The husband altered the arrangements where the wife had access to 100% of his disability pension. At that time the amount was $1,858.67 each fortnight. The husband arranged for the pension to be split equally between himself and the wife each receiving $928.00. The husband set up his own ANZ debit account and placed his $42,000 into that account. This is the first time post separation from 1999 that the husband received one half of his own disability pension. A period of 15 years.
The wife explained, “I then started thinking, well, okay, he is going to take half of the pension as well. And what did he do? He closed the lot and took my money.”[17]
[17] Transcript 6.11.19 p. 74, line 10.
In January 2017 the husband changed the legal title of the former matrimonial home so that the parties held their respective interests as tenants in common as opposed to joint tenants. The wife said she was not give notice of this. The husband said he gave her notice of this as he was legally obliged to do. I accept his evidence.
It was difficult to understand the wife’s umbrage about this change, as it meant that for the first time, the house was held by herself and the husband in equal shares. The wife said she was aware that she would inherit the whole house if the husband pre-deceased her whilst the title remained as joint tenants.
On 1 May 2017, the husband ceased paying the wife any portion of his disability pension.
During her evidence it was clear that the wife was focused on what she perceived was her lack of financial security when either her current de facto or the husband died. The wife described feeling insecure about the relationship because she is concerned that she will not be entitled to receive Mr T’s Superannuation pension payment if he predeceases her, which she believes is stated in their Binding Financial Agreement.
The Binding Financial Agreement (BFA)[18] includes clause 4(d), “nothing in this agreement shall be construed to disentitle Ms Hadsall from claiming against Mr T’s pension should she be eligible to do so under the rules of Mr T’s pension.”
[18] Exhibit H3.
This is in accord with what Mr T has written in his early morning email to Ms K, “My Superannuation would pass to my de facto for about $43,000 per annum for life transferrable in 3 years time.”[19] This was confirmed also in submissions with Mr Gardiner.
[19] Affidavit of Ms K filed 10 August 2018, annexure 3 and affidavit of the husband filed 3 September 2019, annexure 2.
Mr T expressed his undying love for the wife stating, “I never wanted her money, I just wanted the love we had 43 years ago.” My impression of the wife’s position was that she felt she had been misled by her children and she now had a strong awareness that her suspicions about Mr T “wanting her millions” were entirely misplaced. On the evidence should Mr T pre-decease the wife, she has financial security not only from all of her own assets and investments but also from the life pension of Mr T. In my view, the wife’s fear that she has to borrow money now from Mr T because, “I have to reserve my funds because I have to go into a retirement home in the event that Mr T died or if I separated from Mr Hadsall now, I would have to use those funds to find a place for me to live. I do have a house in Town P.”[20] Given her own property and investments and the possibility of a future life pension, her fears if anything did happen to Mr T are really without foundation. I note also the reference to “Mr Hadsall” being the husband from whom the wife is not yet divorced.
[20] Transcript 6.11.19 p. 82.
At the time of final submissions it was agreed that the position remains the husband’s disability pension currently provides that in the event of his death, a portion of his life pension/disability pension is paid to the wife being 67% on the basis that these parties remain married, having not divorced.
On 1 September 2012, the wife’s current de facto Mr T was obviously feeling very low at 3am when he sent an email expressing his absolute frustration and disappointment with what he described as the wife’s,
“Paranoia associated with the financial aspects of this relationship.[21] It truly is over but what a waste. She can never accept that I only wanted her as a person and I can never accept being accused directly or indirectly of resuming the relationship for monetary gain. That was never my intention.”
[21]Affidavit of Ms K filed 10.8.18, annexure H 3.
The wife gave evidence that at the time,
“I had a very severe mistrust that had been thrust on me by my daughter and son-in-law, in case I got into a relationship and took over and – and Mr T may have taken some money from me. Also, it was as a very new relationship, and I was very insecure at the time, after the death of my partner. It was a feeling of distrust put on me by Mr H and Ms K.”[22]
[22] Transcript 6.11.19 p. 72.
At that time of trial, 7 years later, the wife accepted unreservedly that Mr T “was a wonderful man of good standing and good judgment.”[23] They remain living together in their de facto relationship. In his letter at the height of the wife’s suspicions as to his motives, Mr T stated, “All I ever wanted was the love of the girl I really loved all of those years ago. I still love her very much and I am devastated that the issue of property ownership has driven us apart.”[24] This whole incident in 2012 is the only evidence of the wife and Mr T having had cracks in their relationship. I note that 7 years later the parties remain living together and Mr T has informed the Court that his own pension provides for financial security for the wife in the event he predeceases her.
[23] Transcript 6.11.19 p. 72.
[24] 2, husband’s affidavit 3/9/19.
The wife has borrowed money, around $25,000.00, from Mr T on the basis that she does not have enough money to pay for her day to day expenses. That position is not borne out by the evidence.
The wife said at various occasions through her evidence that “I don’t know anything about money.”
The wife also told the Court that she does not have an income and therefore she has had to borrow funds from Mr T her current de facto who it seems has now lent the wife $25,000.00 for her living expenses as seen in her current financial statement.
Apart from her property portfolio, the wife has an investment fund currently valued at $170,621.00 as seen in the asset pool which produces an allocated pension stream. The wife said she only gets $50.00 income from that fund, which is inaccurate however, as the wife chooses not to use or withdraw more than $50.00 per week from her allocated pension of $177.00 per week.
The wife also has an income from the interest earned on the funds inherited from her mother which are in an ANZ Account deposit account of $182,252.81. The wife has total cash funds of $248,946.56 not including the inherited investment income in S Bank Fund. The wife choses to borrow money for her day to day living expenses from her current de facto partner
I accept that the wife may not know the intricacies of her specific investment funds however I am satisfied that she is an intelligent woman who is generally quite worldly being a public servant and much life experience including having two children and three long term relationships. The wife understands the concept of her wealth and how to preserve her funds.
The Husband
The husband was a quiet and thoughtful man. He has had a distinguished career. There was nothing under cross-examination that tarnished or discredited his evidence. He gave his evidence openly and honestly.
The husband explained that during the marriage when he first became ill, he would not accept a payment of his pension as he did not believe he was sick enough to receive it. That was in 1992 when he retired on the grounds of workplace stress. He also took issue with his employer who refused to acknowledge his work in a book he had written and remained in a stale mate regarding his employment over this issue for a period.
He has worked throughout the marriage save for the years he was ill. Thereafter his disability pension was relied upon by the family for their financial support. He was candid about his mental health diagnosis, his heart medication, and all aspects of his life, as set out in his affidavit.
I was left with a strong impression that the husband has quietly suffered for the 15 or so years that the wife was in control of his finances. He has been non-demanding and adapted his lifestyle as best he could to live off the meagre funds the wife gave him.
The husband has lived in significantly impoverished circumstances compared to the wife. I am satisfied that he lived modestly based around the meagre amount paid to him by the wife from his disability pension. I am satisfied that this income did not permit him to afford some of the basic comforts and necessities of life including proper heating, cooling, dental expenses, and reasonable costs of living. $3,000 each six months amounts to $115.00 per week.
The husband said:
“As I lived on $3,000 every six months for years, I formed the habit of not spending money except for the basics. I neglected my general health, eyes and teeth. I didn’t spend any money on the usual pleasure of home life such as Foxtel, internet, heater in my house during winter, air conditioning in summer, travel, small outings, hobbies, books and magazines, gifts to my family etc.
My current expenses will increase as I need to have regular check-ups for my general health including teeth and eyes.
After being harassed by Ms Hadsall to sell our home, I cancelled my landline and the only means of communication was by mail until recently when Ms K gave me a mobile phone. I agreed to have the phone on the condition that only Ms K’s and Mr H’s numbers are on my phone. I do not accept phone calls from anyone else.”
I accept that the husband will need money for other household services such as cleaning, gardening, plumbing, electrical maintenance and repairs and that he needs to spend money on new appliances such as new oven, dishwasher, washing machine, clothes dryer and air-conditioner. The husband’s car is now 35 years old being a Motor Vehicle 3.
The husband had a quadruple bypass in 2015.
The husband transferred funds of $100,000.00 from his inheritance in 2017, to his brother. This was just prior to the husband being admitted to the BB Hospital Mental Health Unit for treatment for schizophrenia during 2017. He was re-admitted 2018.
The husband explained in his material that in July 2019 he withdrew money from his ANZ Debit account for legal fees of $24,750.00 and a new hot water system $6,076.00 totalling $30,826.00
I am satisfied that the husband has accounted for the inheritance in E Bank UK as shown in his affidavit (paragraph 46) filed 3 September 2019. I am satisfied that the husband has complied with his obligation of disclosure as seen in his affidavits.
As of 1 May 2017 the value of one half of the husband’s fortnightly disability pension was $928.00. At the time of trial the full amount per fortnight was $2,043.00.[25]
[25] Husband’s trial affidavit 4/9/19 paragraph 46 (3).
Wherever the husband and wife’s evidence is in contest, in the absence of any independent evidence, I prefer the evidence of the husband. He was a far more accurate historian than the wife.
Dr CC, psychiatrist
Dr CC is the husband’s treating psychiatrist since 2017 and a consultant psychiatrist for the Region W Community Health Centre. Dr CC was required for cross examination.
Dr CC prepared a short report explaining that the husband, Mr Hadsall has a diagnosis of schizophrenia with the most recent psychotic relapse in 2017 and by early 2018 his condition had stabilised. The husband takes medication for his condition and is case managed by the Region W Mental Health. The husband is currently in a stable mental state and Dr CC considered that continuing to live at his present address is one factor that will be important in maintaining the husband’s mental stability. Dr CC believed that if the husband has to move then his stability may be compromised. In explaining the nature of the husband’s medical condition;
“It is a treatable condition. So it’s a condition in which people can have discrete psychotic episodes. So the cause varies from person to person, but it’s, particularly in Mr Hadsall’s case, it’s a condition where there are discrete episodes of psychosis that can be treated with antipsychotic medication and for as long as the person continues that medication, the condition remains under control, much in the same way as something like diabetes. You know, if somebody has diabetes and they take their insulin, then the diabetes is under control, but they must continue to take medication.”[26]
[26] Transcript 7.11.19, p. 151, lines 5-15.
Mr Gardiner Counsel for the wife cross-examined Dr CC asking:
a)Why the husband was referred to community mental health in late 2017 which was when the husband said he suffered his psychotic episode.
b)How severe the relapse was, where the mental health unit was, that the husband was admitted to, and how long he was admitted for being from 2017 to early 2018 (discharged for a short period and readmitted) as was the husband’s evidence.
c)Whether or not Dr CC had ever visited at the husband’s home and upon hearing that the psychiatrist had, the question was, “was the house in a darkened state during the day?” Dr CC replied, “When the husband was unwell, it was.” He said that the blinds were drawn and both the screen and wooden door shut.
d)How did the husband respond to the psychiatrist and did the husband interact with his psychiatrist. Dr CC explained, “at the time the husband was polite but in keeping with his condition, was quite suspicious. He wasn’t aggressive or hostile but was insistent that certain things were occurring and that his insight into the irrationality were quite low at that time.”
e)Dr CC confirmed that the husband was on his medication and responded well to the medication and the persecutory beliefs are in remission. Dr CC said when the husband is now visited he “greets the mental health team spontaneously, lets them into the house, the wooden door is open, the screen door is still closed. The house is in a good state. It does reflect that he is more organised in his thinking and he does have insight.”[27]
f)Dr CC was asked had he observed the kitchen to be well stocked, food in the refrigerator, and was the house generally clean and tidy? Dr CC replied, “we have never had to sort of step over any piles of mess or anything like that. The kitchen area and the living area seem to be orderly. People are able to sit on chair without piles of things in the chairs. The house smells a bit dusty, but there is no sort of smell of rotting food, there is no offensive odours that we can detect.”
g)Dr CC was asked whether the husband (who holds qualifications) read, and then whether Dr CC had “seen much evidence of Mr Hadsall reading in your presence? Or referring to books in your discussions?”[28] Dr CC said that the husband did not read in their presence, other than reading his prescriptions.
[27] Transcript 7.11.19 p.153, line 40.
[28] Transcript 7.11.19 p. 155, line starts at page 154, line 40 “Do you know whether Mr Hadsall reads at all?”
Dr CC described the husband as, “quite reserved, relatively softly spoken but he’s well spoken, quite articulate… with a little bit of an anxious interpersonal style. He has been cooperative, calm, appropriate and polite with us. He has been quite gracious and quite thankful for our treatment that we have provided.”[29]
[29] Transcript 7.11.19, p. 156.
The most I could glean from the questions asked by the wife through her Counsel, was that the wife’s decision to give the husband a meagre allowance each week (referred to elsewhere in these reasons) was because she believed he was a recluse. The need for basic costs of living such as heating, cooling, medical care, dental care, as set out in the husband’s affidavit, which he says he could not afford, do not in my view, depend on whether the husband was a recluse or not.
The report of the treating psychiatrist was self-explanatory. There is agreement that the husband is aged 77 and will not be working again. He has recovered from his last episode. He is a compliant patient.
Dr CC said in his written report contained in his affidavit that if the husband has accommodation stability (whether it was full ownership or some other arrangement) that this stability will reduce his risk of psychotic relapse.
Similarly, Dr CC considered that whilst it was hard to predict a future, if the husband’s current home needed to be disposed of to enable him to live in a high care facility, then it would be in the husband’s health interests in terms of his condition to retain that asset. This was not challenged.
I have had regard to the evidence of Dr CC and of the consequences of the husband not having a permanent residence. I am also aware that the wife changed her position during the trial to enable the husband to have permanent accommodation first through Orders enabling him to have a life interest. In the final submissions in June 2020, the wife’s position was that she was prepared to accept orders where her interest was transferred to the husband, in exchange for payment of a lump sum, which could be paid by periodical payments.
I consider that the husband’s security of accommodation is, as his psychiatrist said, a very important factor in his future stability and wellness.
Dr DD, general practitioner for the husband
Dr DD provided an affidavit and was required for cross-examination. This cross-examination involved asking questions as to whether the husband took his medication for blood pressure, does that medication keep his blood pressure at tolerable levels, confirming that the husband lives independently. Then a broad question “what would you say as to his future prognosis.” Answer: “I can’t tell about the prognosis. He’s pretty stable now.”[30] This doctor was also asked, “would you agree he is a highly intelligent man.” There was agreement. Then questions about the husband managing well in the community and that he is independent. Confirmation was given that he cooks, drives, and says he goes shopping.
[30] Transcript 7.11.19 p. 160, line 40.
Questions were asked if the GP had discussions with the husband’s psychiatrist. The husband’s general practitioner responded no, but she had read a report in August this year and that said his mental state was improving.
Nothing of significance came of this cross-examination.
Mr H
Mr H is the youngest son of the husband and wife and is aged 35 at the time of trial and married to Ms K. He provided an affidavit supporting his father. He was required for cross-examination.
Their son Mr H who was aged 14, nearly 15 at separation recalls he and his brother living in Suburb C“with my father for about two years as my mother spent most of that time in City AA with her partner, Mr T. I recall this was the situation for about two years prior to the official separation in 1999.”[31]
[31] Paragraph 3 of his affidavit filed 14 September 2018.
At the formal separation in 1999 Mr H moved to City AA and lived with his mother and her then new partner Mr T. He explained that he moved from living with his father and brother to directly moving in his mother and Mr G. This involved Mr H moving from EE School on the Region W where his father, mother and brother formerly lived in the matrimonial home and changing schools to Z School. He denied any suggestion that he did any vocational training at Z School and said that the High School had a centre of excellence for sports and he was part of that program. In effect, he was learning sports as a subject.
It was suggested on many occasions to Mr H that, “your mother provided- spent money on you for food and other expenses” and with reference to his trip to Country Y that it was not his parents that financed the trip but rather “your mother paid for that trip.” Repeatedly Mr H said that in fact his parents paid for the trip and the money his mother paid towards his costs of living was not paid by her but rather his mother paid it using his father’s money.
Mr H left the home of Mr G in or around 2002 and moved into a unit he shared with Ms K who is now his wife. By that time he had saved over $20,000 from his savings as a child and his wages from his work. He also had share investments ranging in value from $5,000 to $10,000.00. He had numerous jobs and full time work, permanent part-time work and several casual positions when he was at school and beyond. His affidavit sets out his extensive working history starting whilst he was still at school. He left school at aged 17.
He had no recollection of his mother making a contribution to his Country X school trip stating that he was aged 18 at the time and had part-time jobs and he financed the trip. The trip happened in his final year. Mr H was able to provide proof of the actual cost of the trip to Country Y. It was also suggested by Counsel for the wife that his mother paid the cost of the Country X trip (not just a contribution) and that was denied.
It was suggested to Mr H that, “now your mother helped you with your first car, a Motor Vehicle 4?” Mr H replied, “Yes, my parents helped me with my first car.” Mr Gardiner Counsel for the wife replied, “Well, again your mother paid for it did she not?” Mr H replied, “Yes with my parent’s funds.” This happened when he was 20.
His evidence was that in 2004 his mother assisted in the purchase of a wedding band and eternity ring for Ms K, but he later repaid his mother. He said he paid for the engagement ring from his own funds.
Mr H was challenged about his knowledge of the finances given that he was 16 or 17 being caught up in the excitement of the trip rather than the costs. Mr H replied that it was not correct and he knew his own contributions and knew about his parents’ finances as, “my mother often talked to me about that.”
Mr H agreed that his mother transferred a property at Suburb N to him and that the value assigned to the property was $750,000.00. Mr Gardiner of Counsel for the wife asked, “Are you aware that the valuation fee was paid for by your mother?” Mr H replied, “Yes, I think so. Yes that is right.” He agreed that he and his wife subsequently sold the Suburb N property for $1,055,000.00 and that it happened in two separate transactions. He said that they sold the block of land first around 2014/2015 then they did up the house and sold it at a later time, approximately within the same 12 month period.
He did not agree that when he lived with his parents that his father did things such as removing the letterbox, cutting off the phone and keeping the house dark with the curtains drawn. He said his father had no phone until not long ago. He knew his mother had been calling his father and his father has a letterbox and did not agree that the curtains were drawn all of the time.
He gave evidence that he did know his father’s lifestyle as he went to see his father with his mother. He has regular contact with his father currently, sometime several times a week, sometimes every 3 weeks depending on work schedules and his father’s needs.
He agreed that his father is a highly intelligent man and denied that he or his wife paid household expenses for his father or that he had given his father funds from the sale of the Suburb N house.
Mr Gardiner of Counsel said to Mr H, “if your father had to go into high care would you contribute to his financial needs?” Mr H replied, “I think that is a crazy…” Mr Gardiner responded, “would you or wouldn’t you?” And again, “would you or wouldn’t you?” Mr H responded, “I don’t know, are we in the future?” Mr H stated that he would like to answer the question again stating, “It all depended on…” Counsel moved on to another issue.
I accept the evidence of Mr H, he is an astute young man with a good recollection of events who gave his evidence truthfully.
He was old enough at the time of separation, almost 15 and the two years after during which time he held down various jobs, to understand what he paid for and what he didn’t.
That the wife would have Counsel ask her son (and then daughter in law) if they would be prepared to take on some or all of the financial support for their father/father-in-law including high care and even sell assets to do so, did the wife no credit in this context.
At various times during this trial, the wife made mention of the current will with her current de facto partner, her likely future inheritance from her current partner, their Binding Financial Agreement and the wife’s uncertainty, even concern, that she might not be inheriting the income stream from Mr T’s pension and would therefore have a shortage of money.
The wife said during her evidence, that she needed an income stream, to provide for accommodation if something happened to her current relationship. This is despite her already having considerable wealth from Mr G’s estate and also from her mother’s estate.
Ms K
Ms K is married to Mr H. She gave evidence and was required for cross-examination.
Counsel for the wife suggested to Ms K that her mother in law, (the wife) had paid the FF Estate Agent valuation fee on the M Street, Suburb N property valued at $750,000.00 when it was transferred to Ms K and Mr H for love and affection. Ms K disagreed and stated that she herself had paid the fee, and that it was evidenced by her Q Bank account card number. Mr Gardiner challenged that evidence, to which Ms K responded that she can get the paperwork which was in her car, that her husband currently had it, and that it was definitely “paid for by us because we were receiving the property also we felt like it was only right for us to incur that cost.” The Court inquired of Mr Gardiner if he wished the witness to go and retrieve the statement which he responded, “No I don’t.”
Ms K was asked (as was Mr H) “Have you given any of that money to the welfare of your father-in-law?” referring to the sale proceeds of $1,055,000.00 from the house they were given by the wife. Ms K replied, “No.”
As with Mr H, Ms K was asked by Counsel for the wife on instructions from the wife, “If your father in law had to go into high care, would you contribute to his financial needs?” Ms K replied, “We’ve actually used all that money to expand our property portfolio, so at this point in time, we don’t have access to superfluous funds.”
Counsel asked, “If necessary, would you borrow against your property portfolio?” Ms K replied, “I would prefer not to.”
Other questions were asked if she knew the husband had a mental health condition, if she knew he was on medication, if she knew he lived independently and was capable of looking after himself, did she agree the husband was highly intelligent, and liked living on his own, and drove his own car. She replied yes to all questions.
Ms K gave her evidence honestly and openly. I accept her evidence as truthful.
Step 2 - Contributions s.79(4) financial and non-financial
The parties have each worked hard at their respective roles. The husband has excelled in his chosen field and he has been supported by the wife who took on the major role in raising their two children and providing for the welfare of the family in her role. The husband also contributed to the family as best he could given the dual role he played in being the primary income earner and father to their two children.
The wife says she brought in the value of a car she sold to help put towards the purchase of their first home. I have taken account of that.
The husband brought funds into the marriage from a previous property he acquired at GG Street, Town HH for $7,000.00 prior to his relationship with the wife. His mother lived in the property for about 6 weeks and then returned to the UK to live. The husband and wife moved into that house. Two years later in 1976, the husband sold the GG Street, Town HH property for $15,000.00 and those funds were used to buy a property at JJ Street, Town C together with the sale money of the wife’s car and a small mortgage.
Six years after their marriage in 1974, the wife fell pregnant with their first child Mr J in 1981. At that time the wife says she was forced to retire from her employer given what she says was their strict policy at the time that married women had to retire when they became pregnant. The wife it seems focused on primarily being a full time mother raising the parties’ two children and keeping the household running.
I have had regard to all of their circumstances including that the wife had to re-enter the work force and do casual work for a period of 3 years from 1992 to 1995 whilst the husband was ill. The wife described this period as a crisis. The husband said that they had a contingency fund to draw on, and it was not therefore as drastic as the wife suggests. Other than that period, the husband’s income supported the family once the wife had to give up her public servant position.
The husband whilst acknowledging that the wife went back to part time work recalled that they did have savings to call upon in their contingency fund and they owned their house at B Street, Suburb C, the former matrimonial home outright as joint tenants.
Overall in this matter, the financial and non-financial contributions by the parties were made when the parties operated in a fairly orthodox manner typical of a working husband and wife working and then staying home to raise children.
I have had regard to the husband’s inheritance in 1993 from his mother and also noted that it would constitute a financial contribution on his part, however, it remained in the E Bank in England, and did not get mingled into their financial endeavours. It was in English Pounds and remained untouched during the relationship. The husband said, even in their difficult period, they were managing as the wife had part-time work and there were savings in their joint account.[32]
[32] Transcript of the Husband’s evidence, 7.11.19 p. 177.
At the time of trial his E Bank account contained $52,300 as seen in the asset pool. 18 years post separation the husband gifted $100,000.00 to his brother in the same month, in 2017 as he was admitted to the BB Hospital Mental Health Unit, on the eve the onset of his most recent episode of Schizophrenia. Whether the inheritance monies were in the E Bank or transferred into the husband’s ANZ account, they remain his contribution.
The parties and their two children lived on the income stream from the husband’s disability pension until separation when the wife left the husband in 1999. All of the household expenses and costs relating to the children and the parties were drawn from this source of income.[33]
[33] See wife’s affidavit filed 11 July 2019, paragraph 22.
At the time of separation the wife was then aged 50. The husband turned 57 in that year. The youngest child Mr H was aged 14 and their eldest child Mr J was aged 18, and moved to study at university in Brisbane.
At the time of trial, these parties had been separated for some 20 years. After separation their financial lives became vastly different.
On reflecting on the contributions of either party during the marriage historically, each Counsel submitted that up to the period of separation, the parties’ contributions during the marriage, both financial and non-financial would be regarded as equal.
Post Separation Contributions
The wife’s financial circumstances upon separation were that she moved in with and became the de-facto wife of Mr G. Mr H moved with his mother. Mr H left school at age 17 and moved away from living with the mother. He held down multiple jobs. His costs of living were paid either by Mr H who worked at several part time jobs, or from the funds generated by the husband’s disability pension but which were in the possession of the wife.
When Mr G passed away in 2011, the wife was the sole beneficiary and inherited $1.4 million from Mr G’s estate. At this point the wife became considerably more wealthy than the husband. This inheritance was received 12 years after separation.
A year later, in 2012, the wife entered into another de-facto relationship and home owned by her second de-facto husband Mr T, post separation. She maintained the balance of her significant estate. The wife entered into a Binding Financial Agreement with Mr T.
In 2014 the wife inherited another $235,000.00 from her own mother. Again the wife increased her superior financial position as compared to the husband. It is clear that the wife’s financial circumstances became vastly superior to that of the husband starting 12 years after separation and that this was added to 2 years later in 2014.
The years from 1999 for the next 15 years until August 2014 were financially gruelling for the husband. The wife gave him $3,000.00 each six months from his disability pension and retained the bulk of the husband’s fortnightly disability pension. In 2012 the wife became independently quite wealthy.
In August 2012, whilst still maintaining control of the husband’s disability pension and having received Mr G’s inheritance, the wife decided to gift a home she inherited, to her son Mr H and his wife Ms K. At the time the house was worth $750,000.00. It was sold for over $1,000,000.00.
Post separation, Mr H then 14 or 15 stayed with the wife, however, he rapidly become financially independent. The wife in any event, had the use of most of the husband’s disability pension for her own expenses and for expenses incurred by her for Mr H or herself. Mr H says he was self-supporting at age 17 with various jobs, having left school. The financial support from the husband received and retained by the wife, has continued well beyond the youngest child turning 18.
Wife receives husband’s disability pension post separation
A contribution or factor which requires consideration is the issue of the husband’s disability pension continuing to be retained and used by the wife post separation from 1999 until August 2014. The wife’s retention of those funds from 1999 until August 2014 saw the wife retaining most of the husband’s disability pension. In dollar terms this amounts to approximately half a million dollars.
From separation in 1999 up to 30 June 2018 the sum of $803,053.43, less tax of $13,849.00, was paid out leaving net pension funds of $789,203.01.[34] I accept this evidence.
[34] Annexure 3 of the husband’s affidavit, figures from Super Fund F and paragraph 23 and 24 trial affidavit 3/9/19.
For the period 1999 to 30 June 2018, a period of approximately 18 years post separation the wife has received $521,516. In the same period the husband received $267,686.93.
In percentage terms the wife has received 66% of the husband’s disability pension. The husband has received approximately 34% or $253,830 less than the wife.
Even allowing $5,000.00 for rates and insurance coming out of the amount the wife solely retained, that is minimal compared to the amount the wife has not accounted for.
The breakdown of those amounts further, from 1999 until 2018 is set out by the husband:[35]
a)In the year of separation 1999 the wife paid to the husband $3,000.00. The wife left in 1999, so this equates to $333.00 per month for the balance of nine months for that year being from April 1999 to December 1999. The period is 39 weeks. That amounts to the husband receiving $76.92 each week.
b)Thereafter from the year 2000 to 21 April 2014 the wife paid the husband $3,000.00 each six months from his own disability pension. $6,000 per year equates to $115.38 per week.
c)In 2014 when the husband took control of finances, the balance of the joint account which all came from his disability pension was $82,112.03. He transferred $42,000.00 into his newly established ANZ debit account. He left $40,112.03 for the wife’s use.
d)The husband authorised one half of his pension to be paid to his own ANZ debit account and for the wife to continue to receive the other half.
e)In May 2017 he withdrew $7,945.72 from the joint account. The wife closed the joint account on 30 October 2017.
f)The husband cancelled the regular payment of half of his disability pension to the wife. The final payment was made to the wife on 1 May 2017.
g)The value of the husband’s disability pension fluctuated over the years from around $1,600.00 per fortnight to $1,800.00 per fortnight.[36] Later years saw the sum of around $1856.00[37] and $1,900.00.
h)When the husband rearranged the payment of his disability pension to still give the wife one half in April 2017, she stopped paying the rates and the husband paid them.
[35] See husband’s trial affidavit 3/9/19 paragraphs 12 and 24.
[36] To put this payment of $3,000 per six months to the husband in to a context, the husband’s pension was around $1,800 to $1,900 per fortnight, or $3,600 to $3,800 per month.
[37] $928 x 2, the sum subsequently received by each the husband and wife after 2014 when the husband redistributed the pension (instead of the wife) equally between the parties for the first time.
Despite the wife stating that she has paid various expenses since separation, I am satisfied that the payments came from the husband’s disability pension.
The rates, insurance, health fund expenses were physically paid by the wife from the fund of money derived exclusively from the husband’s pension in the joint fund. Therefore the wife did not “pay” those expenses from her own post separation income as she implied. Subsequent to August 2014, the wife continued to pay insurance and the respondent paid the rates on the former matrimonial home. The wife says she paid the husband’s private health insurance up until 3 April 2017. I am satisfied the expenses paid by the wife all came out of funds provided by the husband via his disability pension. The husband explained he tried to have the wife pay one half of the rates however, this was not possible and the wife refused to do so after August 2014, even though she was still at that time receiving one half of the husband’s pension. He did not stop the pension going to the wife until 1 May 2017.
Clearly, from the $3,000.00 paid to the husband each six months he could never have afforded to pay insurance and rates from his meagre allocation by the wife.
The wife says that a verbal agreement was reached that the husband would be responsible for the rates and she would be responsible for the payment of the home insurance. The wife says that whilst she did not live in the former matrimonial home, “I paid the house and contents insurance on such property until 3 April 2017, and house insurance only from that date until the present time.”
I accept the husband’s evidence that having so little money, he learned to go without spending money except for basics. The husband says “I neglected my general health, eyes and teeth. I didn’t spend any money on the usual pleasure of home life such as internet, Foxtel, a heater in my house during winter, air conditioning in summer, travel, small outings, hobbies, books and magazines, gifts to my family etc.”
The wife says that she spent the balance of the funds “on the family.” There is insufficient evidence before the Court to satisfy me that the wife spent the funds she retained on “the family”.
The wife received approximately $521,000.00 being around $250,000 more than the husband whilst she:
a)Lived in a de facto relationship with Mr G.
b)Inherited $1.4 million in 2012 from Mr G’s estate.
c)Inherited her mother’s estate in 2014 of around $235,000.00.
d)Lived in a de facto relationship with Mr T in 2012 and onwards.
I am satisfied that the wife has enjoyed a lifestyle and wealth in the period 1999 onwards that is vastly superior to that of the husband. His ongoing financial support to the wife is a significant factor. The husband’s position is that the wife has already had and enjoyed the bulk of his disability pension and that she ought not receive anything further from his pension.
I accept that the husband was living in a degree of poverty such that he had insufficient income to afford dental costs, heating and cooling, travel, and other the reasonable costs of living including Foxtel or other simple pleasures.
In effect the husband has had sole occupation of the former matrimonial home and he alone paid the cost of rates and insurance from his own disability pension and the cost of his health fund which he says the wife paid without reference to him. Effectively the husband is the only person who has contributed to the ongoing costs associated with the former matrimonial home.
Evaluation of the financial and non-financial contributions
In taking the approach of looking at the overall pool it can be seen that the wife has made direct and overwhelming financial contribution in terms of her inherited properties and investments.
The wife’s Counsel Mr Gardiner initially submitted that the wife’s inheritances ought not be included in the property pool of the parties as they were inherited assets post separation and should be referred to as the wife’s financial resources.
Counsel for the husband Mr Jacobs submits however, that this approach is at odds with the Full Court authorities such as Calvin & McTier which states unequivocally that the definition of property under the Family Law Act includes property of either or both the parties.
Mr Jacobs also submits that Calvin & McTier is also authority for the proposition that property could include inheritances. In that case, the Full Court highlighted that the definition of matrimonial cause means contained in s 4 of the Act (s 31(1)). That definition relevantly is:
(ca) proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings:
(i)arising out of the marital relationship.
Where the court has proceedings of such nature before it, s 79 (1) of the Act empowers the court to make such order as it considers appropriate:
(a) in the case of proceedings with respect to the property of the parties to the marriage or either of them – altering the interests of the parties to the marriage in the property. .
“Property” is defined by Section 4 of the Act to mean:
(a) in relation to the parties to a marriage or either of them – means property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.
Calvin & McTier [2017] FamCAFC 125, paragraphs 24 and 25 state:
24. Thus, both the relevant definition of “matrimonial cause” and s 79 refer to all of the property held by the parties at the time of the hearing before the Court. All of the property then held by both of the parties or either of them can therefore be the subject of orders under s 79, regardless of when particular assets were acquired. The fact that the court is to take into account the contributions of a party with respect to the acquisition, conservation or improvement of that property or to the welfare of the family, makes this abundantly clear (s79 (4)(a), (b) and (c). Such contributions may, of course continue long after separation.
25.In this matter, that property could include inheritance. So much was accepted by senior counsel who appeared for the husband, who also accepted that there is a significant body of Full Court authority to that effect that, in the exercise of the court’s discretion, property acquired after separation can be the subject of division. See, for example Jones &Jones (1009) FLC 92-143 at 77,003; Thynne and Madison [2007] FamCA 558.
Mr Jacobs submitted Calvin & McTier is also authority for the proposition that property can include after acquired property and that there need not be any nexus between that asset and the relationship the parties were in. Further, Mr Jacobs submitted that the Full Court rejected submissions based on the proposition submitted for the husband in Calvin & McTier, that no order should have been made involving the inheritance as there was no clear connection between the inheritance and the parties’ relationship.
The Full Court have stated that ultimately there is no basis for excluding from consideration any property in which the parties have an existing legal or equitable interest, however, the issue of contributions to such property and the use of or maintenance of such property is a different issue.
I accept these submissions on the law as accurate.
As I said initially the wife’s approach was to suggest that the Court should not include the post separation property inherited by the wife in the property pool and that they were a resource of the wife. I am satisfied that the Full Court in Holland & Holland [2017] FamCAFC 166 made it very clear that it is contrary to long standing authority to suggest that post-separation property will only be included if there is a direct connection between the marriage and the property.
Further the Full Court considered that the trial judge erred in treating the husband’s interest in the inherited property as a “financial resource”. It was in fact property of the husband. In this matter, I am satisfied that the assets comprising the wife’s inheritances ought not be treated as a “resource”, but rather her property. The wife has legal title to the assets comprising her two inheritances.
I also note that the Full Court considered that it is wrong as a matter of principle to refer to any existing legal or equitable interest in the property “excluded” from consideration in section 79 proceedings and that:
More often than not, the expression is used to indicate that particular property, or a particular category of property, or superannuation interests, are to be treated separately from other property for the purpose of a consideration of s 79(2) or for the purpose of assessing contributions. [38]
[38] Holland & Holland [2017] FamCAFC 166 at paragraph 26.
An issue in this matter is whether this matter is to be evaluated and contributions assessed on a global or asset-by-asset approach. I have had regard to the authorities[39].
[39] Norbis v Norbis (1986) FLC 91-712
I note also it is possible to make individual assessments of each item of a property pool in forming the overall evaluation in certain circumstances having regard to the characteristics of the property and the circumstances of its acquisitions. In Holland & Holland [40] the Full Court made reference to Zaruba & Zaruba [2017] FamCAFC 91[41] saying:
38. In the vast majority of cases, it will be appropriate to address the s (79)2) question by ascertaining the legal and equitable interests in property without making distinctions between individual assets. That is because [referring to Stanford] the “express and implicit assumptions that underpinned the existing property arrangements” can be seen to apply (to the extent and degree to which they do apply) to all of the property of the parties or either of them including property in which the legal interests vary.
39. However, the position is likely to be different in circumstances where, as here, the characteristics of the property and the circumstances of its acquisition, improvement and the like can be seen to differ significantly and where, as here, the parties’ relationship had taken on quite different characteristics during the period to which the s 79 inquiry is directed.
[40] [2017] FamCAFC 166
[41] paragraphs 38 and 39
In considering Norbis v Norbis[42] their Honours referred to the following passage where Wilson and Dawson JJ said:
Of course, it may be possible and appropriate in many cases to determine the proportions in which the property is to be divided without treating any of the assets separately, but where the interests of the parties differ, a different approach will be open. Section 79, in particular s. 79(4), refers to “any property of the parties to a marriage or either of them” and that expression is sufficient to encompass both the entirety of their property and their individual interests. If the parties’ interests in specific items of property differ or they have made differing contributions, it may be desirable to proceed upon an item by item basis in the division of the property between them. In such a case, justice and equity may best be served by treating the items separately for the purpose of determining the proportions in which they are to be divided, particularly if the overall division is to be effected by the transfer or retention of interests in individual assets, as was convenient in this case.
[42] (1986) FLC 91-712.
The Full Court having cited this passage, then stated:
Thus, the nature of a particular interest or interests in property and when and how it was acquired, utilised, improved or preserved may be very relevant to each or all of three central questions: should a s 79 order be made at all, whether contributions should be assessed “globally or “asset by asset” or by reference to two or more pools, and what is the nature and extent of each party’s contributions. However there is no basis for excluding from consideration any property in which the parties have an existing legal or equitable interest. [43]
[43] Section 79(2) ; Stanford;
I have had regard to the submission that the wife wishes to press in terms of the husband not being candid about the funds he gave away to his brother and the husband’s ANZ bank account. I do not accept the suspicions of the wife that the husband has not fully explained these transactions or as implied, that he has not been candid. The husband was wholly transparent about the inheritance in his affidavit material, he was cross examined about it and I have accepted his evidence as truthful. This issue was something of an obsession for the wife however, I do not accept that the husband has been dishonest. The wife continues to ignore the fact that all of the husband’s funds come from his own disability pension or his own inheritance.
Wife’s approach
In Calvin & McTier the parties separated in 2010, divorced in 2011 and were 4 years post separation in 2014. The husband received a substantial inheritance from his father’s estate. At the time of the trial, the husband’s remaining inherited assets were worth $430,000.00 which was approximately 32% of the pool
Their Honours referred to the earlier leading authority of Bonnici & Bonnici (1992) FLC 92-272[44] where that Full Court stated:
“We have no doubt that his Honour was correct in rejecting the submission that these assets were a “resource” and not property. They clearly were property and came into the parties’ hands during the subsistence of the relationship. Indeed, if they had come into their hands subsequently, they would still have retained their character as property. The expression “resource” is and should be confined to those interests which do not fall into the definition of property as such to which the parties have a present entitlement.”
[44] Paragraph 40.
As to the approach taken in Bonnici in the property division and the contributions of each of the parties towards the inheritance, their Honours in Calvin & McTier stated:
41. The more difficult issue in this case is as to whether the same should be treated differently from other types of property in which the parties clearly have an interest.
42. The answer, we consider, must depend upon the circumstances of individual cases. If, for example, in the present case, there had been no other assets than the husband’s inheritance, but the wife had, as his Honour found, clearly carried the main financial burden in the support of a family and also performed a more substantial role as a homemaker and parent than the husband, then it would clearly be open and indeed incumbent upon a Court to make a property settlement in her favour from such inheritance.
43. A property does not fall into a protected category merely because it is an inheritance. On the other hand, if there are ample funds from which an appropriate property settlement can be made and a just result arrived at, then the fact of a recently acquired inheritance would normally be treated as an entitlement of the party in question.
44.The other party cannot be regarded as contributing significantly to an inheritance received very late in the relationship and certainly not after it has terminated, except in very unusual circumstances. Such circumstances might include the care of the testator prior to death by the husband or wife as the case may be or other particular services to protect property. See James and James (1978) FLC 90-487. But there was no evidence of this in the present case despite submissions by counsel for the wife to the contrary. Accordingly, we think that in the present case the moneys received by the husband from the sale of the freehold and from his uncle’s estate should not be brought into account.
The Full Court in Calvin & McTier stated that the above discussion:
49 … is redolent of the discussion of the exercise of a discretion. In Bonnici, the question of whether after-acquired property should be included in the property available for division was said to depend very much on the circumstances in each matter and the exercise of discretion of the Court. The Court in Bonnici was, however, principally concerned with the reasons for the primary judge in that case and, in particular, the reasons why there had been a finding of equality of contributions by the parties notwithstanding the receipt of a significant inheritance by one of the parties after separation. The point being made was that if the inheritance was to be included in the property for division the introduction of that property would need to be reflected in the findings as to the parties’ financial contributions. Bonnici was not concerned with submissions akin to those made in this matter.
The Full Court in Calvin and McTier did not accept that the Full Court in Bonnici [45] was purporting to lay down a guideline as to the approach the Court should take to inheritances received after separation.
[45] Paragraph 50.
At paragraph 51 the Full Court stated, “In short, we consider that the court retains a discretion as to how to approach the treatment of after acquired property. The trial magistrate could have included the inheritance amongst the property to be divided or dealt with it separately. The trial magistrate was not obliged to follow one course or the other. The submissions of the husband are no more than an invitation to “pok[e] around in the entrails of discretion”(to adopt the remarks of French CJ, which his Honour made during the unsuccessful application for special leave in Singerson & Jones [2015] HCA Trans 195.”
The property pool division
In looking at the property pool, the total is $1,076,110.00.
In final clarifying submissions on 26 June 2020, the wife sought a lump sum payment of $114,000.00 from the husband in exchange for her interest in the former matrimonial home. This is based on the wife’s position that she is entitled to retain 40% of the former matrimonial home which is valued at $285,000.00, as well as her inheritances and other property. Counsel for the wife submitted that the wife is entitled to a contributions based entitlement of 30% of the former matrimonial home on an asset by asset evaluation. In addition it is submitted that the wife is entitled to a 10% uplift for section 75(2) factors.
On the basis of that payment to her by the husband, the wife transfers her interest in the former matrimonial home to the husband. Thereafter the husband keeps the other assets standing in his name (bank accounts, car and furniture) and the wife keeps the similar assets standing in her name.
In this matter the wife’s remaining inheritances and property[46] represents a figure of $705,646.00 out of the asset pool of $1,076,110.00 or approximately 66%.
[46] Noting she gifted a house inherited worth $750,000.00 to her son and his wife.
It seems to me that without specifically articulating it, the wife’s Counsel has adopted an asset by asset approach with 2 pools. One pool containing her inheritance and property and the other the former matrimonial home and the husband’s other assets. Counsel for the wife submitted 12 years after separation the wife inherited her first estate, and then 2 years later she inherited her mother’s estate and therefore the husband has not contributed to the post separation inheritances of the wife received this long after separation.
In calculating what the wife would receive in dollars terms on her proposal, the wife would retain her inheritance and property at $705,646.00. The former matrimonial home is currently held as tenants -in -common in equal shares. The wife proposes transferring her share of the former matrimonial home to the husband in exchange for him paying her the sum of $114,000.00. This amount represents 40% of the total value of the former matrimonial home.
The overall result for the wife is that she will retain her property and inheritances valued at $705,646.00 plus $114,000.00 paid to her by the husband in exchange for her interest in the former matrimonial home. That totals $819,646.00 out of the overall asset pool of $1,076,110.00 or 76% of the asset pool.
On the wife’s proposal the husband retains the former matrimonial house at $285,000.00 plus his funds in the bank, his motor vehicle at $1,500.00 and furniture of $2,000.00 which totals $370,464.00. However, he has to pay out to the wife $114,000.00 in exchange for her interest.[47] Factoring in the debt he is left with, results in the husband actually receiving $256,464.00. That is around 24% of the property pool of $1,076,110.00.
[47]The wife will agree to the husband paying her in instalments after an initial lump sum of $20,000.00.
The wife proposes that the husband pay monthly periodic payments from his pension of $1,556.66 for the years ahead starting with an initial capital amount of $20,000.00. If the debt is not paid out upon the husband’s death, the house will be sold and the balance of the debt will be paid from the proceeds of what would then be the husband’s home.
The husband’s global approach
Mr Jacobs of Counsel has approached the division on a global basis.
It has always been conceded that the wife made the major contribution to the combined property pool. Mr Jacobs has divided the value of the wife’s inheritances and property of $705,646.00 into the total value of the pool $1,076,110.00 to explain that the wife’s inheritance constitutes 65.57 or rounded up to 66% of the total pool.
Counsel for the husband submits therefore that taking account of their respective contributions, an apportionment as between the husband and wife would be represented by 80% to the wife and 20% to the husband.
Mr Jacobs then added an uplift to the husband for his section 75(2) factors of 15 %. Mr Jacobs submits that factors which favour the husband are:
a)His age being 7 years older than the wife;
b)the fact that he will not work anymore and has not been able to work since 1995 due to his psychiatric illness;
c)the husband’s poor health citing the evidence of the husband’s cardiac issues which lead to his quadruple bypass in 2017 as explained by his general practitioner;
d)the evidence from his psychiatrist of his most recent episode of his ongoing psychiatric condition of schizophrenia, albeit that the condition is currently settled;
e)the husband’s subsequent need for secure accommodation due to his psychiatric illness given the evidence of his psychiatrist (this appears to be conceded by the wife);
f)the significant issue of the husband’s ongoing financial contribution made to the wife through the wife controlling the husband’s disability pension for 15 years (in the period 1999 to 30 June 2018, the amount of $789,303.00 was paid out through the husband’s disability pension, and the husband has given evidence that he received only $267,686.00 of that sum or around 33.9% of the total. The wife retained the balance minus payments made for the insurance, rates and health cover);
g)the failure on the part of the wife to properly account for the funds she received of around $521,000.00.
It is submitted that the husband is entitled to a 15% uplift factor for these issues, resulting in the property pool being divided 35% to the husband and 65% to the wife.
If the husband is to receive 35%, that results in him retaining assets to the value of $376,638.00.
The assets other than the former matrimonial home that are already in the possession of the husband total $85,464.00. That leaves the husband to receive a further $291,174.00.
The husband seeks to retain the former matrimonial home valued at $285,000.00 plus the other assets standing in his name, as seen in the asset pool. If he retained the home, the total assets retained by the husband would be $370,464.00 or 34.42% (whereas 35% equals $376,638.00).
That proposal sees the wife retain 65.58 or 66% which consists of her property including her inherited assets $705,646.00.
The wife does not receive any portion of their joint asset being the former matrimonial home.
In considering this proposal, I am mindful that this marriage has been a long marriage of 25 years and two children. In making assessments of the parties’ respective contributions, I am required to look holistically at their contributions. In Dickons & Dickons (2012) 50 FamLR 244 the Full Court said:
We wish also to refer to the approach of the federal magistrate in attributing percentages to differing periods within the relationship, or types of contribution made. There is in our view little to be gained, and much to be said against, approaching the task of assessing contributions by attaching percentages to components of it. (the same, it might be said, applies to attributing a percentage to each of the relevant s 75(2) factors).
There can be little doubt that the classification of contributions by reference to terms such as “initial contributions”, “contributions during the relationship”, and “post separation contributions”, can be a helpful and convenient means of giving coherent expression to the evidence in a s. 79 case and to giving coherence to the nature, form and extent of the parties’ respective contributions. However, the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship. So much is clear from the terms of s 79 itself and, in particular, s 79(2). The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.
Doing so is also consistent with the demands of authority that the ultimate assessment of contributions should be made without “… giving over-zealous attention to the ascertainment of the parties’ contributions…” Norbis v Norbis (1986) FLC 91-712 and the well-established recognition in the authorities (acknowledged specifically by Her Honour in this case) that the process required of the Court by s 79 is the exercise of a wide discretion, not the performance of a mathematical or accounting exercise.
The necessarily imprecise “wide discretion” inherent in what is required by the section is made no more precise or coherent by attributing percentage figures to arbitrary time frames or categorisations of contributions within the relationship. Indeed, we consider that doing so is contrary to the holistic analysis required by the section and, in the usual course of events, should be avoided.
In all of the circumstances, in light of the task to perform, I am satisfied that it is appropriate for me to consider the respective contributions and their nature, form and extent made by each of the parties contributions through their relationship by adopting a global approach but examining closely the nature and origins of each asset.
The approach taken by the wife makes little to no allowance for the extent of each of their contributions throughout the relationship. The wife’s proposal places considerable weight on the wife’s inheritance at the expense of an holistic assessment of the husband’s contributions over a 25 year marriage where he has worked to support the family, supported the wife and his children, and where he has continued to provide considerable financial support to the wife, at the expense of his own standard of living.
Evaluation of section 79(4)
In looking at the various contributions both up the point of separation and then in the years from 1999 up to the trial there is a constellation of factors to be considered including contributions made by each through their married life and then separation for 20 years up to the trial. This will include the significant financial contribution made by the wife in the assets inherited 13 years post separation well as their other contributions to home making, raising children and earning the income to support their family made by both parties.
The wife said she had to manage the husband’s finances post separation however the husband denied he needed this. To the extent that the wife made payments on behalf of the husband using his funds, towards the rates insurance and his health cover, I have taken that into account.
I accept that the apportionment based on their respective contributions to the asset pool is 80% to the wife and 20% to the husband as submitted by the husband.
Section 75(2) factors
I accept the submissions as to the section 75(2) factors favouring the husband.
I note the husband is 77 and the wife is 70 being seven years older than the wife. The husband is diagnosed with schizophrenia. The husband underwent a quadruple bypass in 2016 and suffers from high blood pressure and high cholesterol.
In her affidavit in 2017 the wife described herself as being in good health. In the witness box the wife said she has various ailments which sounded likely commensurate with her age listing out a raft of past procedures including having her gallstone removed, foot problems and tendon problems, having to wear a moon boot and a past appendix operation. There is no independent or expert evidence of the wife having any serious medical condition.
The psychiatric assistance obtained by the husband and the community nurse who attends during periods of his illness, are accessed through the Public System.
Given their respective ages it seems to me that neither party will be in the work force again.
In terms of the wife’s order to receive one half of the husband’s disability pension, the wife has income of her own from her two investment funds totalling $362.12 per week. The wife could increase her income if she chose to as she owns an unencumbered inherited property at O Street, Town P on the Region W behind City AA, which sits empty with the wife living with Mr T in Region KK, Queensland.
The wife is in a de facto relationship with Mr T. The wife’s concern that “on his death I have to live somewhere” does not take account of the reality of the assets she owns. When asked about whether she had money sitting in banks (the wife has around $250,000.00 in funds) and explaining why she has borrowed around $25,000.00 from her current de facto Mr T, the wife replied, “I have to reserve my funds because I have to go into a retirement home in the event that Mr T died. Or if I separated from Mr Hadsall [the husband] now, I would have to use those funds to find a place for me to live. I do have a place at O Street, Town P.”
The reality of the wife’s future in the event that her current de facto pre deceased her, is completely contrary to her case outline which states of the wife and Mr T “they have executed a binding financial agreement which precludes the Applicant from receiving money from Mr T’s pension.” However, clause 4(d) of the financial Agreement states that, “Nothing in this Agreement shall be construed to disentitle Ms Hadsall from claiming against Mr T’s Pension should she be eligible to do so under the rules of Mr T’s Pension.” Mr T informed the Court that the wife, as his de facto, is entitled to a 67% percentage of his Super Fund F upon his death. This was confirmed by her Counsel in closing submissions.
Section 75(2)(q) requires the Court to have regard to the terms of any Part V111AB Financial Agreement binding on a party to the marriage. As seen the wife has entered into a Binding Financial Agreement with her de facto partner Mr T. I have had regard to the terms of that Agreement which essentially means the wife and Mr T will retain the property they each bought into the relationship, and share in relative terms any joint investment or asset. Mr T is a semi-retired professional and receives a pension from a LL Super Fund which does not devolve to his children but may devolve to a spouse or de facto partner according to the recital G of their Financial Agreement.[48]
[48] Exhibit H3.
In addition, the wife is aware that if the husband predeceases her, she will currently benefit from his disability pension whilst she is his wife. The wife will received 67% of the husband’s pension as his wife.
In her de facto relationship the wife is receiving financial support through living in the home of her de facto and having him pay her health insurance and general support each week as set out in her financial statement. The wife has been borrowing funds from her de facto however, that has been her choice rather than use her own funds. Given her current assets and the security that is in place with her de facto, and the money in her possession, it is difficult to fathom why the wife says she has to borrow from her current de facto.
The husband lives alone.
The wife has a weekly income from her investments of $362.12 however, as referred to elsewhere in these reasons, the wife could increase her income if she chose to. Currently her home in O Street, Town P is sitting idle, with no tenants and the wife living thousands of kilometres away.
The husband has an income stream from his disability pension. The wife seeks to retain one half of the husband’s disability pension .The husband’s disability pension has not been valued, as it is in the payment phase. It has been treated by each of the parties as an income stream. Mr Gardiner submitted it was more like an annuity.
The husband has no other source of income. His disability pension provides a life income for the husband currently worth around $2,000.00 per fortnight. This provides financial security for him into the future.
I consider it important that the husband retains this financial security for his own future. I do not intend to make an Order splitting the husband’s disability pension as sought by the wife.
I accept that there is a significant disparity in the financial circumstances on either party’s assessment given the inheritances of the wife.
Section 75(2)(o) refers to any fact or circumstance which in the opinion of the court, the justice of the case requires to be taken into account. The issue of the husband’s ongoing financial support to the wife which continued not only for the marriage of 25 years, but continued for 17 years post separation, a period in all of 42 years, is in my view a fact which the Court must take into account in a significant way.
The wife has not satisfied the Court that she spent the funds received by her of around $520,000.00 on the family. Even allowing for payments of rates and insurances the wife has had the security and financial advantage of having a higher standard of living than the husband since separation. The monies retained by the wife do not appear in the asset pool. The wife did not reconsider her retention of most of the husband’s disability pension should alter, even after she became a millionaire. Up to 2014, the wife decided that the husband would live in extremely modest circumstances as compared to her own. His lifestyle was unnecessarily impoverished for 15 years. This circumstance is a matter which the justice of the case requires to be taken into account.
Having considered these factors I do not accept, as submitted that the wife is entitled to a 10% uplift for the s. 75(2) factors. The wife is younger than the husband, in better health and lives in a de facto relationship with her semi-retired de facto husband. The wife has had significantly more financial security than the husband for years, thanks to the husband.
Accordingly in light of all of the factors, I am satisfied that an 8% uplift to the husband is appropriate.
Adding that to the contributions based entitlement, the property division becomes 72% to the wife and 28% to the husband.
Just and Equitable
The Orders providing the husband to retain 28% of the entire property pool. That amounts to $301,310.00 from the property pool worth $1,076,110.00.
To achieve his desired outcome of retaining the former matrimonial home valued at $285,000.00, and noting that the husband otherwise has assets worth $85,464.00 (totalling $370,464.00), it will be necessary for the husband to pay the wife the sum of $69,154.00 in exchange for her transferring her interest in the former matrimonial home to him.
I accept it is very important for the husband’s future psychiatric health to have the security of knowing he has a permanent home. It is with this in mind that the husband and wife have both indicated that if Orders are made for the husband to retain the home and payout the wife, there is agreement that the wife will accept a lump sum payment on terms of the house is transferred to the husband and the husband paying out the wife for her interest in the house.
Given that I intend for the husband to retain his Super Fund F income I am satisfied that the husband has the capacity to pay repayments over the next 4 or 5 years. I am satisfied that if the husband retains the home, that he will have security of his accommodation. Each of the wife and husband will have income. The wife lives in Region KK, Queensland since 2012 in the home of her current de facto. The wife already has a house sitting vacant in O Street, Town P on the Region W. The wife has investments, cash and properties.
The wife is retaining a much larger proportion of the property to reflect her contributions, and in the assessment of s.75(2) factors, I am satisfied that the end result reflects a just and equitable property division taking account of all of the contributions and factors relevant.
I intend to make Orders reflecting these findings, in terms proving for the husband to pay the wife $69,154.00 by an initial payment of $10,000.00 within 21 days, followed by monthly instalments of $1478.00 per month which result in the debt being paid at the expiration of three and half years. I will include a clause that the husband may pay out the debt earlier, at his discretion. I will also make provision, as foreshadowed, that in the event of the husband’s death, the house will be sold and any balance owing will paid to the wife from the sale proceeds.
I certify that the preceding two hundred and ninety-two (292) paragraphs are a true copy of the reasons for judgment of Judge Willis AM
Date: 23 July 2020
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