Halsbury and Halsbury (No. 2)
[2007] FamCA 1101
•29 June 2007
FAMILY COURT OF AUSTRALIA
| HALSBURY & HALSBURY (NO. 2) | [2007] FamCA 1101 |
| FAMILY LAW – PROPERTY – Settlement in relation to marriage |
| Family Law Act 1975 (Cth) |
| APPLICANT: | Mr Halsbury |
| RESPONDENT: | Ms Halsbury |
| FILE NUMBER: | LEC | 33 | of | 2007 |
| DATE DELIVERED: | 29 June 2007 |
| PLACE DELIVERED: | Brisbane |
| JUDGMENT OF: | Barry J |
| HEARING DATE: | 15 June 2007 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Mr Stephen Tester |
| SOLICITOR FOR THE RESPONDENT: | In person |
Orders
(1)That within two (2) calendar months of the date of this Order the Wife pay to the Husband the sum of $54,962.
(2)In the event that the amount is not paid within the time stipulated, the property at M in the State of New South Wales is to be sold. Upon sale the moneys are to be disbursed as follows:
(i)in payment of costs of sale including legal fees, agents commission and costs of putting the property in order to allow sale to take place;
(ii)in payment of mortgage balance;
(iii)the sum of $54,962 plus interest to the Husband;
(iv)the balance to the Wife.
(3)The Husband is appointed trustee with power of sale for the purpose of giving effect to paragraph (2) of these Orders.
(4)Each party be solely entitled to the exclusion of the other party to all property in the possession of that party as at the date of these Orders and for the purpose of this Order property includes all furniture, chattels, superannuation, other work entitlements and money standing to the credit of the parties in their bank accounts and any motor vehicle in the possession of those parties.
(5)That each party be solely liable for and indemnify the other party in respect of all liability attaching to any item of property to which that property is entitled pursuant to these Orders or any debt in the name of that party.
(6)A Registrar of the Family Court of Australia is appointed to execute any document in either party’s name and do all acts and things necessary to give validity to any documents that are required to be executed.
(7)Each party has permission for liberty to apply.
IT IS NOTED that publication of this judgment under the pseudonym Halsbury & Halsbury is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: LEC33/2007
| MR HALSBURY |
Applicant
And
| MS HALSBURY |
Respondent
REASONS FOR JUDGMENT
I am asked to determine property settlement issues as between the parties. Cohabitation between the parties commenced in October 1995. They married in January 1997 and separation occurred in September 2004.
The Husband was born in July 1960 (46 years) and the Wife in August 1963 (43 years). The Wife says in her affidavit filed 8 November 2005 (which was the affidavit relied on both at an earlier trial and the current hearing) separation occurred in December 2004. The Husband says separation occurred in September 2004. I note in the Joint Case Summary document – a document relied on by the Wife that separation occurred in September 2004. I accept that as the correct date. The difference is not of great relevance only as to the accuracy of the parties’ recollection of events. The parties have one child, J, born in September 1996. There is a shared care arrangement between the parties in relation to this child.
The Wife has a daughter, S, born March 1991 who is a child from a previous marriage. In paragraph 21 of his affidavit filed 23 April 2007 the Husband deposes to the fact that S always lived with the parties and there was no financial support or any other form of support forthcoming from her biological father. This is not disputed by the Wife.
The Husband had three children of a previous marriage but those children mainly resided with their mother. The Husband enjoyed contact with these children on alternate weekends and half school holidays (refer paragraph 2 of Husband’s affidavit).
Orders Sought
In an application for final orders filed on 22 January 2007 the Husband seeks orders in the following terms:
“1.That property owned by the parties before cohabitation be removed from the asset pool.
2.That the remainder of the asset pool be divided 80% or more to the Husband and 20% or less to the Wife”.
6.At the commencement of the hearing the legal representative for the Husband produced a document entitled “Minute of Proposed Order” in the following terms:
1.That within 28 days of the date of this Order the wife pay to the husband the sum of $65,000.
2.That each party be solely entitled to the exclusion of the other party to all property in the possession of that party as at the date of these Orders, and for the purpose of this Order property includes all furniture and chattels, superannuation and other work entitlements, money standing to the credit of the parties in any bank accounts and any motor vehicle in the possession of those parties.
2.1 That each party be solely liable for, and indemnify the other party in respect of all liability attaching to any item of property to which that party is entitled pursuant to these Orders or any debt in the name of that party.”
7.However, in an Outline of Argument document which was prepared by the Husband he says (paragraph 36) Orders are sought in the following terms:
“36.The asset pool should be divided 80% to the Husband and 20% to the Wife with a further section 72 adjustment in the Husband’s favour.
37.In the alternative the asset pool minus the gifts to the Husband ($102,000) should be divided 70% to the Husband and 30% to the Wife on the basis of contributions, with a further section 75(2) adjustment in the Husband’s favour.
38.If the asset pool is divided on an asset by asset basis, it is proposed:
a)to quarantine any increase in value to the Wife’s superannuation and the Husband’s house since separation;
b)to include the Wife’s car as the Husband paid for it;
c)to include the Wife’s house as the Husband contributed $121,456 towards it. The Husband’s contribution has been appreciating at 9% per annum according to the Orders made on 29 May 2006 and is currently valued at about $132,000;
d)to quarantine the contributions made by the Husband’s parents in “the twilight of the cohabitation”.
8.At the time the proposed Orders were produced I had the Husband’s Outline of Argument setting out his version of the asset pool. The Husband’s value for the combined pool was $421,418 on a net basis. If the Husband was to receive an extra $65,000 to the $275,318 that document concedes he has already received, on my calculations this amounted to an apportionment of 80% of the assets to the Husband and 20% to the Wife.
9.There was no ready explanation why the proposed Orders sought the division of 80%/20% whilst the Summary of Argument document sought a 80%/20% division together with an adjustment on account of section 75(2) factors.
10.The reference in paragraph 38(c) to the Husband paying $121,456, relates to earlier Orders made by Justice Bell on 7 March 2006. After the Husband appealed that decision he applied to his Honour for a stay of the Orders. That application was not successful and accordingly the Husband has paid this amount in total to the Wife. In paragraphs 32, 33 and 34 of his trial affidavit the Husband particularises the amounts paid to the Wife pursuant to the Orders of Justice Bell. In summary, $12,500 had been paid prior to the hearing as an interim property settlement, $60,000 was paid in June 2006 and a further $48,356 was paid on 5 July 2006.
11.I note from the Judgment of Bell J of the 7 March 2006 and the Judgment of the Full Court of 24 November 2006, at the earlier property settlement hearing the asset pool was approximately $403,000.
12.For reasons I am about to give I have determined the property pool at $396,000. The assets have not greatly altered in the intervening period but the way in which the property is held has obviously changed.
13.It is the Husband’s case that with these funds he has paid to her, the Wife has managed to build a residence and now has her own home. That home, according to the Husband, has not been properly valued.
Orders Sought by Wife
14.The Wife in her Response document filed 20 April 2007 seeks the following Orders:
“1.That the Orders sought in the application filed by the husband on 5 February 2007 be dismissed.
2.That the wife transfer to the husband her right, title and interest in the property situated at and known as [O] in the State of New South Wales.
3.That the husband transfer to the wife his right, title and interest in the property situated at and known as [M].
4.That the husband pay to the wife a sum of money equivalent to the difference between the value of the property currently in the wife’s possession and the value attributed to 45% of the value of the pool of assets available for division between the parties.
5.That the husband and wife be declared to have the sole right, title and interest in:
a)any chattels, goods, furnishings, and other property which are, at the date hereof, in their possession respectively;
b)any moneys, shares, superannuation entitlements and debentures which stand in their sole name respectively at the date hereof.
6.That the husband and wife do all acts and things and give all consents and execute all documents and writings necessary to give effect to the orders made herein.
7.That in the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to Section 106A, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.
8.That the husband pay the wife’s costs associated with and incurred by these proceedings.”
15.Adopting the figures set in the Outline of Argument document of the Husband under the heading “The Asset Pool” the total assets are $421,418. The property in the Wife’s possession is $146,100. Interpreting paragraph 4 as best I can, 45% of the total pool of $421,418 is $189,638 less the amount the Wife has received is $146,100 would mean a payment by the Husband to the Wife of $43,538.
16.Paragraph 4 had apparently been drafted by the Wife’s former legal representative.
17.I have had regard to the figures nominated by the Wife at page 4 of her Joint Case Summary document but the figures given in the Husband’s Outline of Argument are more consistent and reality based.
Adopting the figures set out in paragraph 65 of this Judgment would involve a payment to the Wife of $55,246 calculated as follows:
Total net assets $397,124
45% of total net assets $178,705
Wife retains home $340,000
Cash $ 450
Car and proceeds $ 3,500
Superannuation $ 11,639
Jewellery $ 1,870
Total $356,459
Less Wife’s mortgage $233,000
Assets retained by Wife $123,459
Difference $ 55,246
In her Summary of Argument document the Wife submits:
“8.The financial contributions of the parties should be weighted according to the significance they had through the course of the marriage on a global basis. The wife estimates these to be 45% by the wife and 55% by the husband.
9.The non-financial contributions of the wife to the construction of the home both intellectually and physically and also as homemaker far outweigh the non-financial contributions of the husband. The wife estimates these to be about 90% by the wife and 10% by the husband and accordingly a further adjustment should be made in her favour.”
20.In the course of her final submissions the Wife submitted that the Husband had his house which was subject to a relatively small mortgage and she had her property which was subject to a relatively large mortgage. She concluded there should be no further adjustment between the parties.
21.The matter proceeded as a one day hearing on 15 June 2007. The Husband as noted was legally represented and the Wife was not legally represented.
Witnesses in Husband’s Case
22.The Husband gave evidence on his own behalf. His mother, H, filed an affidavit and she was cross examined by telephone link up. The Husband had filed affidavits from two other witnesses, his daughter, K, and an eye specialist in the northern rivers area, Dr W who annexed a report dated 1 March 2006.
23.Neither of these two witnesses was required for cross examination.
Witnesses for the Wife
The Wife was the only witness in her case.
Methodology
Determination of property settlement issues involves a four step process:
·Ascertain the assets and liabilities of the parties and ascribe a value to same.
·Determine in what percentage the assets should be divided having regard to the factors enumerated in paragraph 79 of the Family Law Act.
·Determine what further adjustment may be required having regard to the matters set out in section 75(2) of the Family Law Act.
·Be satisfied that the result arrived at by adopting the above approach is overall a just and equitable one.
For the purposes of the current exercise I have not mentioned the step relating to superannuation as set out in Coghlan’s case (2005) 33 Fam LR 33 at 414. No splitting order is sought in this matter. The Wife’s superannuation fund is modest indeed and will not vest for quite some time.
Valuation of Real Estate
27.To value the properties of the parties a single expert valuer was appointed - a Mr A. Apparently Mr A produced three valuations of the one property, two at one figure and a third at another figure. The range was $370,000 to $400,000. I was informed he gave different reasons in each valuation for adopting the figure arrived at.
28.The Husband wrote to Mr A saying he was less than impressed with his approach.
29.At that stage Mr A promptly withdrew as a single expert valuer and refused to co-operate with the process thereafter.
30.The Wife was minded to call him as a witness but was put off by the prospect of the conduct money and other expenses required. She did not make application for him to be called by phone.
31.I indicated I would be prepared to take his evidence by phone but when enquiries were made during the luncheon adjournment I was informed he indicated he was not interested in giving any evidence. He had refused to sign an affidavit annexing his valuation at $400,000.
32.As best I could appreciate the parties thereafter agreed that the value of the property at O was $370,000.
33.The Husband agrees (somewhat grudgingly) that the value of the Wife’s property is $340,000.
34.
The Husband had obtained a valuation for his home from another valuer,
Mr B at $365,000 but was prepared to adopt $370,000. I note that in the Financial Statement filed by the Husband on 16 June 2005 (read as part of the Wife’s material) the Husband valued this property at $370,000.
35.It is common ground that I should adopt the value of $340,000 as the value of the Wife’s property. This property has not been valued although as I understand it Mr A’s brief was to value both properties. The figure of $340,000 is arrived at by the fact that the Wife deposes she acquired the land for $70,000 and thereafter expended $266,000 together with legal expenses and other overheads to complete the construction of a home on the property. Neither party challenged the fact that the figure of $340,000 should be adopted.
Assets and Liabilities of the Parties
Husband’s property, O $370,000 Agreed
Wife’s property, M $340,000 Not disputed
Car and proceeds of caravan (Wife) $ 3,500 Not challenged
Superannuation (Wife) $ 11,639 (refer Exhibit 5)
Wife’s jewellery $ 1,870 (refer Exhibit 4)
Superannuation
37.Exhibit 5 values the Wife’s superannuation currently at $11,639. The Wife is 43 years of age. It is likely she will continue in her profession as a teacher and her superannuation fund will increase in value over the years.
38.I note in Coghlan’s case (supra) the Full Court held:
“Because of the obligation under section 79(2) to make a just and equitable Order, then in order to ensure such a result the Court should wherever there is a superannuation interest apply the provisions of section 79(4)(a) – (g) (which will include the matters contained in section 75(2)) to that superannuation interest whether or not a splitting order is sought.”
39.Having regard to the relatively small value of the superannuation interest (approximately 3% of the net property pool) I see no point in creating a separate pool for this item of property. In bringing the superannuation into account as part of the property pool I make full allowance for the fact that there may be taxation consequences when the superannuation benefits ultimately vest. I make full allowance for the fact that in all likelihood it will not vest for many years and the Wife otherwise does not have access to this item of property. In her supplementary affidavit relied on at trial in paragraph 45 the Wife details that at the time of separation her superannuation funds were valued at a total of $4,290. There was no documentation supporting this assertion by the Wife but the facts asserted were not challenged by way of cross examination. I make full allowance for the fact that the value of the Wife’s superannuation has more than doubled in the period between the time of separation and the time of hearing.
Parties’ Furniture
I note at paragraph 11 of the Full Court Judgment the Full Court observed:
“It seems that the parties have divided contents of the former matrimonial home by consent.”
The Husband annexes to his affidavit (as annexure R) a memorandum of agreement signed by the parties on 23 September 2005. The terms of that agreement are as follows:
“1.We agree that each shall retain ownership of any goods and chattels owned separately by us prior to October 1995 and that the items listed in 2 and 3 below shall be returned immediately.”
Items 2 and 3 are not relevant.
“4.We consider this to be a full and final settlement of outstanding claims regarding goods and chattels owned separately by us prior to October 1999 and agree that they be removed from the global assets pool.”
42.The date of this agreement lends weight to the Husband’s claim that separation was in September 2004 rather than the Wife’s sworn evidence it was in December 2004.
43.During the hearing before me the Wife for her part wished to bring into account a piano which had previously been owned by the Husband’s grandmother and in turn owned by his mother before being handed on to him. He indicated he intended to leave it to one of his daughters. The Wife wished to bring into account various other musical instruments which had been owned prior to the cohabitation commencing.
44.Notwithstanding the various amounts put forward by the parties in the Financial Statements I propose to disregard items of furniture. After two trials and an appeal the parties have not gone to the trouble of valuing the furniture in the respective households. In his Outline of Argument the Husband says the furniture is assessed at $3,000 each. The Wife says that the Husband’s personal effects are $10,000 whilst her personal effects amount to $3,000.
45.At paragraph 69 of her first affidavit the Wife deposes:
“69.At the time of separation [the husband] and I divided the contents of the home at [O] between us and as such those items do not form part of the property settlement.”
In the absence of any evidence being led to value these items I propose to disregard same.
Wife’s Jewellery (Exhibit 4)
The Wife says that the only item of jewellery purchased after cohabitation was one diamond ring for $1,500 and another item for $520. She contended for $150 be deducted from the diamond ring as this was the value of the original ring which was used in the completion of the $1,500 ring. I indicated I intended to bring the jewellery into account at $1,870. There were no further submissions on this aspect.
Wife’s Cash
The Husband in his Outline of Argument claimed the Wife had cash of $4,600. It would appear from the bank statements which were tendered (exhibit 6) that the amount of cash the Wife had in various accounts, as at the time of hearing, totalled $450 made up as $425 in the ANZ account and $28.27 in the New South Wales Teachers Credit Union account – rounded off to $450.00.
The Husband claimed the Wife had sold a car and caravan for a total amount of $3,500. This was not challenged in any way by the Wife and I propose to bring that amount as an asset disposed of after separation by the Wife.
Liabilities
Wife’s mortgage $233,000 Not challenged
Husband’s mortgage $ 40,303 Not challenged
Loans (Husband) $ 45,000
Husband’s liability (principally legal fees) $ 11,639
HECs debt (Wife) $ 10,000 (approximately)
Husband’s Loan from Mother
The Husband’s mother, H, filed an affidavit on 23 April 2007. In that document she deposes (paragraph 17) that in June 2006 when the Husband’s house property was due to be sold pursuant to Court Orders she lent her son $42,500 at 6% interest as he was unable to borrow enough money from the bank. She asserts:
“He now owes me about $45,000.”
On my calculations 6% interest over 12 months would bring the total amount owing to $45,050.
The moneys advanced in June 2006 were well after the previous trial in this matter and arose because the previous trial Judge refused a stay of his Orders of 7 March 2006. The Husband’s evidence is that he was driven to borrowing the funds from his mother as he was unable to obtain the funds from a bank or other lending institution. The Husband’s evidence is corroborated by the testimony from the Husband’s mother. The Wife’s assertions that the moneys were a gift similar to the $25,000 paid on an earlier occasion strike me as being opportunistic in the extreme. I see no reason why the evidence of the Husband’s mother corroborated as it is by the Husband as borrower should not be accepted. I propose to bring this liability into account at $45,050.
Husband’s Claim for Legal Fees
For her legal fees incurred other than fees covered by the Certificate issued by the Full Court, the Wife obtained an advance on her mortgage of $16,000. The Husband cogently argues that his legal fees amounting to $11,639 should similarly be bought into account. Annexures S and T to the Husband’s affidavit filed 23 April 2007 is said to evidence the Husband’s liability for legal fees. I had some difficulty totalling the balance at the amount contended for but accept the Husband’s evidence that this amount should similarly be brought into account.
I indicated it was a case of either both being included or both being excluded. The approach that appeared to be adopted is that they would both be included. For this reason I propose to allow the Husband’s liability of $11,982.
HECs Debt
To her first affidavit the Wife annexes her academic record.
It would appear that she studied from 2001 to 2004 inclusive although she had been doing subjects from 1995 onwards. She has completed a Bachelor Degree in Education. She has accumulated a HECs debt of approximately $10,000 and she seeks for this to be brought into account.
For his part the Husband says that it was within weeks of the Wife handing in her last assignment as part of her studies that separation occurred. The Wife is not currently paying any child support. The Husband submits she has had the benefit of his support as home maker and parent throughout the course of the marriage whilst completing her studies. He submits he should not have to bear any percentage of the HECs debt whilst the Wife has her teaching career ahead of her and presumably will for the most part retain the benefits of same.
The cases highlight two categories of cases.
·Where the HECs debt is a current liability.
·Where the HECs debt is a contingent liability.
Refer M & M (unreported 8 February 1999), R & R [2003] FamCA 507, S & S (2004) FMCAFam 321, WVP [2006] FamCA 1369.
The Wife’s HECs debt is a contingent liability as she is yet to earn sufficient income to have any deductions made from her salary.
The Wife would have the Court believe that she will not be able to gain employment as a teacher other than on a casual or part time basis. I am extremely cynical of the Wife’s claims in this regard. If the Wife’s evidence be correct it may well be that the HECs debt will remain a contingent liability notwithstanding that the studies have been completed and the sum is now ascertained as a sum certain.
Had the Wife worked for a significant period of time and supported the family unit from her income I would be more inclined to exercise my discretion to include the HECs debt as a liability. Where however the Wife has studied throughout the entire period of the relationship and separation occurred immediately upon her gaining her qualifications it seems to me the Wife will have the sole benefit in the future of the potential for higher income. She may have some liability for child support but she would have this liability regardless of what her source of income was. In the circumstances I do not view it as appropriate for the Husband to be held responsible for one half of such a liability.
It may be in the fullness of time the Wife will have to pay greater child support because of her higher earnings but that will be a relatively small percentage and having regard to the age of the child and the amount of time the child spends in each household is likely to be a relatively small amount.
For the reasons given I propose to disregard the liability for the HECs debt as being a joint liability of the parties.
Total Assets
Husband’s property $370,000
Wife’s property $340,000
Cash $ 450
Car and proceeds of sale of caravan $ 3,500
Superannuation of Wife $ 11,639
Wife’s jewellery $ 1,870
Total $727,459
Less Liabilities
Husband’s mortgage $ 40,303
Wife’s mortgage $233,000
Husband’s loan $ 45,050
Unpaid bills – legal $ 11,982
Total $330,335
Net Assets $397,124
Assessment of Contributions Pursuant to Section 79 Factors
Capital Contributions
Sale of L Property
The Husband owned this property jointly with his father. I would infer that his father was on the Title Deed to enable the borrowing to take place. It is common ground the Husband received the benefit of the whole of the sale proceeds. The parties met in 1995 when the Wife occupied the premises next door.
This property was sold for $102,000. The mortgage at the time was $38,000. The solicitor for the Husband suggested to the Wife that the commission on sale would have been approximately $4,000. She conceded this was a reasonable figure.
It was suggested to the Wife that the net proceeds of sale from the L property was $60,000 net and that in addition at the relevant time the Husband had $7,000 in a mortgage offset account.
The Wife was somewhat reluctant to agree with the propositions being put to her but was unable to explain in an accounting sense why it was that she contended in her sworn material the net proceeds of sale of the L property were only $50,000.
Having regard to the Husband’s evidence and the other evidence before the Court I accept that the capital contribution by the Husband from the L property was in the order of $60,000 and he had a further $7,000 in a bank account which he was able to contribute to the purchase of the O property.
Additional Capital Contributions by Husband
Inheritance from Father
The Husband’s father died in about November 2000. The Husband received an inheritance of $77,000 in approximately June 2002. The bulk of these funds was used to reduce the mortgage indebtedness on the O property.
This contribution from the Husband was not challenged.
Capital Contribution from Husband’s Mother
In February 2003 the Husband’s mother advanced to the Husband the sum of $25,000 as a gift. The Husband says the purpose of the advance was to cover the Husband for future medical needs. He did not in fact use the funds for this purpose by putting the moneys aside but rather expended it for the benefit of the parties.
The Wife accepts in paragraph 52 of her first affidavit that these moneys were paid.
Capital Contribution by Husband from Sale of NRMA Shares
Those shares were sold in 2001 and produced a return of $2,792 (refer paragraph 19 of Husband’s affidavit filed 23 April 2007).
The Wife endeavoured to argue that she was a joint contributor to the insurance policies and accordingly should have some credit for this contribution.
I am unable to make a finding on this aspect other than to observe that I found the Husband’s explanation in the course of his oral evidence clear and convincing.
The amount involved is less than 1% of the overall net assets and does not justify any further consideration.
Capital Contributions by Wife
The Wife says that in June 1996 after commencement of cohabitation she received a victim compensation payout of $30,000. This evidence is not challenged nor the fact that it was contributed by the Wife to the acquisition of the O property.
The Wife says in her first affidavit that she contributed $4,009 from the sale of the C property. Annexure B to her affidavit is a statement from the National Australia Bank confirming such moneys were deposited to her account.
Contributions of the Parties from Income Generated
81.In his Outline of Case document the Husband details the contributions he says he made. Apart from the capital contributions to which he makes special reference he says in paragraph 6:
“The financial contributions by the parties during the marriage have otherwise been equal. The Husband worked casually in various capacities throughout the marriage while the Wife worked part time from 1999 to 2001.”
In paragraph 7 the Husband says:
“The Wife spent the duration of the marriage at University and the Husband was the primary carer of both the child of the marriage and also [the wife’s] daughter from her first marriage. He also made numerous improvements to the parties’ property. The non-financial contributions to family and property are estimated by the Husband to be about 20% by the Wife and about 80% by the Husband.”
I note in passing that the Wife says that the non-financial contributions were 90%/10% in her favour (refer paragraph 7 of Wife’s Summary of Argument document)
83.In paragraph 42 of her affidavit of November 2005 the Wife sets out her income for the period from the 1 July1994 through to 30 June 2004. She does not attempt to differentiate Centrelink income from income earned as wages or from other sources.
84.The Husband accepts that the Wife worked in the jewellery industry, as a tutor and in more recent times as a teacher. The Husband’s income has been generated as an entertainer, as a teacher and a very modest income from writing.
85.I am more than satisfied that the income set out by the Wife in paragraph 42 of her affidavit largely consists of Centrelink benefits. The Wife says in her supplementary affidavit paragraph 26 that prior to her obtaining work outside the home in February 1999:
“[The husband] and I had been living on Centrelink benefits.”
Again, the Wife concedes in her November 2005 affidavit paragraph 41 that she studied full time from October 2001 to 13 August 2003. This covers the financial year ending 30 Jun 2003. In paragraph 42 she sets out her income for that period as $8,788.
In paragraph 39 of her first affidavit the Wife says:
“On 29 February 1999 (sic) I commenced employment [in the jewellery industry]”
In her supplementary affidavit paragraphs 27 to 32 the Wife indicates that the additional moneys she earned from working in the jewellery industry allowed the parties to enjoy a much higher standard of living. Having regard to the figures given by her in paragraph 42 of her first affidavit I can only conclude that in the relevant period the income derived from working in the jewellery industry was relatively modest. The Wife would have the Court believe that during the course of the marriage she was capable of earning significant income yet now when her qualifications are higher (as a teacher) she is unable to generate sufficient income.
It was put to the Wife in the course of cross examination that her capacity to earn income was significantly higher than that of the Husband. The Wife accepted that this was the case.
I found the Husband to be multi-talented and quite industrious but his ability to earn income is relatively limited. He has earned money from working in the entertainment industry in the northern rivers area. He has also earned small amounts of money from various writings. His main source of regular income for the future is likely to be as a teacher. He lives in a rural area of the northern rivers but I would not see this as being a barrier to developing this as a source of income in the future.
I accept that the Husband undertook home duties to enable the Wife to complete her study programme. The parties had two small children in their care. The Wife was working and studying part time and on other occasions studying full time. The Wife is dismissive of the Husband’s claims that he made non-financial contributions. I note in paragraph 68 of her first affidavit the Wife when giving evidence as to her contributions says the follows:
·“Assisted [the husband] with the building of the second rock wall on the property which involved me rolling large rocks to the wall ready for them to be put in place - -
·Assisted [the husband] with the planting of half an acre of rainforest trees - -
·Once the frame was ready to be put up [the husband] assisted me with nailing the frame together. My father had also come up from Newcastle to assist us with this particular project.”
In paragraph 81 of her affidavit the Wife deposes:
“81.In relation to the maintenance of the home, including housework duties, I say that I have attended to the following - - washing the dishes each night – [the husband] would cook the meal but did not wash up because of his eyesight problems - - washing, drying and ironing of my own clothes. [The husband] would wash his own clothes and I would was (sic) mine as he would more often than not ruin my clothes when he washed them - - assisting [the husband] with the plantings and maintaining their upkeep and establishment. For example, removing vines, spraying, spreading mulch - - assisted [the husband] with maintaining livestock, including assistance in building a chicken pen and controlling bird lice as well as assistance in feeding, mustering, yarding and throwing the calves for pink eye treatment - -”
I do not quote the above passages as being confirmatory of the non-financial contributions the Wife says she has made. Rather it is confirmatory in the form of a concession that the Husband engaged in a wide range of activities in the family home. A person who washes his own clothes and cooks the family meals as well as doing a range of jobs in the landscaping of the property is unlikely to be an idle type of person. The Husband certainly did not strike me that way.
When I heard the contributions the Husband says that he had made including painting, I was somewhat sceptical in view of his serious limitations with vision. However having seen the Husband in Court I accept that he has different spectacles and visual aides for different purposes. He is able to read quite easily. He obviously types and can engage in a wide variety of activities with his limited vision.
Wife’s Non-Financial Contributions
The Wife says that she did the conveyancing for the L property at the time it was sold. That did not appear to be challenged. She of necessity had to do the bulk of the driving after the Husband was no longer able to drive a motor vehicle. I accept the Husband’s evidence that on many occasions the children and himself were able to walk to activities or catch public transport.
The Husband says because the Wife was either studying or working he did the bulk of the household chores. On balance I am inclined to accept the Husband’s version of events as more credible. His evidence is far more consistent.
The Wife contended in her Summary of Argument document that after separation she had to pay rent for six months at $230 per week and for the following two years at $250 per week. In her material the Wife relied on an affidavit of a Mr B a registered valuer in the northern rivers area. Mr B was asked to assess a rental value for the former matrimonial home. In his report he concludes rental value as at date of separation 24 September 2004 $250 per week. This evidence was not the subject of any challenge.
I accept that the Husband has had the use of the former matrimonial home and the Wife has had to pay rent moneys. By the same token the Husband has had to pay the mortgage instalments on the matrimonial home. His Financial Statement would indicate the mortgage payments are $66 a week and he pays rates and other levies of $48 a week being a total of $114 per week. I am unable to say whether the mortgage debt overall has reduced since the time of separation.
As noted earlier, the Husband relied on an affidavit from an adult daughter, K. She deposes to the fact that after her father separated from her mother she saw her father every second weekend and half school holidays. She says she was ten years of age when she first started to live with her father and the Wife.
In her affidavit she says:
“5.Throughout this time my memories are of Dad doing most of the cooking and meal preparation as [the wife] was usually at Uni or studying. Dad also appeared to do most of the cleaning of the house and clothes washing.
6.I remember when [J] was a baby [the wife] never seemed to be home and Dad seemed to do most of the bringing up of her as a baby.
9.After they built the house at [O] and moved there I often helped Dad with things outside like building the stone walls. Together we built and maintained a vege garden and chook pens.
10.I saw Dad doing things like building the shed, planting trees and lots of fencing.
11. Whenever I was there [the wife] was busy studying.”
The Wife did not require K for cross examination. She made it clear that she did not accept the assertions of facts deposed to by K.
In the affidavit of the Husband’s mother, sworn 19 April 2007 in paragraphs 3 and 4 she sets out the times that she has visited the household of the parties and times they have stayed at her house. At paragraph 5 she deposes:
“5.After their daughter [J] was born, on the occasions when I was visiting or they were staying with me, I never saw [the wife] change a nappy. [The husband] appeared to me to be doing all the routine caring for the baby, apart from breastfeeding. [The wife] was studying throughout the duration of the marriage and this seemed to consume most of her time. While [J] was a baby and toddler, [the wife] also did one day per week of unpaid work experience at a legal office.”
In paragraphs 7 and 8 she observes:
“7.From my observations, [the husband] looked after [J] for the first three years until she went to pre-school. He also looked after [S]. He was up first, and would prepare [J’s] and [S’s] breakfast and lunch, until they were old enough to make their own lunch. When they reached school age [the husband] was always there until they left for school and always there when they returned. He would have a snack ready for them to eat after school.
8.When I was staying with them and [the wife] was studying, she would get up and walk out the front door, leaving everything to [the husband].”
The whole thrust of her affidavit emphasises the various contributions the Husband made in a non-financial sense to the operation of the household. It is only in paragraph 17 and following that she deposes to the loan made to her son in June last year of $42,500.
The Husband’s mother gave evidence by way of telephone link up. There was no challenge by the Wife to the evidence of the Husband’s mother as to the contributions made by the Husband.
On balance I am inclined to find that the Husband’s account of the contributions he made to the operation of the household are more accurate and more reliable than the account given by the Wife. The Husband’s evidence is corroborated by two witnesses albeit they were family members. If the Wife wished to adduce evidence of her contributions in a non-financial sense it was her responsibility to produce witnesses to this effect. Given the concessions made by the Wife in passages of her affidavit to which I have made reference, given the evidence of the Husband corroborated by two other witnesses, I find there is a touch of hyperbole about the Wife’s evidence when she asserts that she was responsible for 90% of the non-financial contributions.
Conclusions Re: Section 79 Contributions
I reject the Wife’s claim that other than capital contributions she was responsible for 90% of the financial and non-financial contributions. It is abundantly clear from her own evidence that the Husband assisted in a whole variety of ways in the work required to put the finishing touches to a new home including landscaping of the property. The Husband impressed me as an enterprising, intelligent, industrious individual. I unhesitatingly accept that he would have been more than responsible for his fair share of the household duties as well as carrying out his role of minding the children and attending to their needs. It is always difficult to be precise but doing the best I can with the evidence available I would assess that the Wife’s income earning ability during the period of the relationship and her contributions as home maker and parent were balanced by the Husband’s income and his contributions as home maker and parent. The Wife produced more income at various times during the course of the relationship. The Husband had a reduced income earning capacity resulting from his disability.
Overall excluding the capital contributions I would assess the contributions of the parties in a financial and non-financial sense as equal.
So far as the capital contributions are concerned the Husband introduced capital to the matrimonial home of a total of $169,000 made up as follows:
Father’s inheritance $77,000
Gift from mother $25,000
Sale of L property and contribution from bank account $67,000
The Wife’s contribution appears to be $34,800 made up as follows:
Compensation award $30,000
Previous property settlement $ 4,000
Sale of vehicle 800
The Husband’s capital contribution outweighs the Wife’s by a measure of approximately 83%/17%. Allowing for the contributions around the house being equal, making allowance for the fact that the Wife has had to pay rental for the period since separation until she was able to take occupation of her new home and allowing for the restrictions in the Wife’s superannuation entitlement, I would assess on the basis of section 79 factors the assets should be divided 75% to the Husband and 25% to the Wife.
Adjustment for Section 75(2) Factors (Husband’s Medical Condition)
Dr W in her report of 1 March 2006 notes in paragraphs 5 and 6:
5.“[The husband] is only partially sighted from congenital glaucoma. This is a very rare condition and open to further possible complications.
6.Prognostically, at best, [the husband] will retain what little vision he has. There is a strong possibility that he may continue to lose sight in his remaining eye as he becomes older, with the attendant disability requirements.”
In paragraph 4 of the report Dr W had assessed as:
“Blind in his left eye, right visual acuity 6/18 with reduced visual field.”
In paragraphs 7, 8 and 9 of her report she noted:
“7.He will require ongoing medical treatment for the rest of his life and may require further operations either for cataract and/or glaucoma.
8.Due to the rare nature of his condition, any further procedures would need to be carried out in a specialist centre in a major city. This always entails considerable expense for travel, accommodation and continuing medical expenses.
9.I believe a conservative estimate of his future medical costs would be in the tens of thousands of dollars.”
Dr W’s evidence was not challenged.
I do not find it reasonable that the Husband should throw himself on the mercy of the public hospital system. If he has the ability and the finances he should be entitled to the best medical service available to save such a precious gift as sight.
As to the Husband’s disability, in her Summary of Argument document paragraph 6(1) under the heading “Other Matters” the Wife says:
“Both parties are in their early 40s and are in good health. The Husband has a sight impairment which has existed since birth. He has had major surgery for his condition initially shortly after birth. During the course of the marriage he had cataract surgery, the expense for which was in large part covered by Medicare. The remaining expense was met out household funds (sic) causing no hardship. His condition is monitored and prognostically, at best, he will retain what little vision he has. If he should require surgery in the future the rarity of his condition will be given consideration and he will get a doctor accordingly. It is reasonable to expect the expense for this to be likely in large part covered by Medicare as it has been in the past.”
These contentious statements by the Wife were not challenged in the course of cross examination. I note that they are not evidence as such as they are contained in the Summary of Argument document rather than in an affidavit. However, they are indicative of the Wife’s attitude.
Because of the Husband’s disability I would have thought a significant adjustment on account of section 75(2) factors was called for.
The Wife is likely to be able to earn significant income as a teacher if she is able to secure full time employment. The Wife presents well, is articulate and personable. I see no reason why in the fullness of time she would not be able to secure employment in the northern rivers district with either a public or a private school.
The Wife has her income supplemented by a boarder who pays $130 a week for thirty weeks of the year.
The Wife as noted earlier conceded she would have a significantly greater income for the future. The care of the one dependent child of the parties is shared.
The Husband’s income is likely to be modest although he is multi-talented and has what I would detect to be an entrepreneurial streak.
On account of section 79(2) factors I am of the view that a further award of 7.5% is justified.
Overall the assets of the parties will be divided 82.5% to the Husband and 17.5% to the Wife.
Calculations
Net assets as previously assessed $397,124
Husband’s entitlement at 82.5% of $397,124 $327,627
Husband has received former matrimonial home $370,000
Less liabilities – mortgage $ 40,303
Loan from mother $ 45,050
Legal fees $ 11,982
Total $ 97,335
Husband has received net assets $272,665
Amount to be paid by Wife to Husband by way of
adjustment – Husband’s entitlement $327,627
Less Husband has received $272,665
Balance owing $ 54,962
I have reviewed the evidence in this matter in light of the findings that I have made. I have considered the impact on the parties of implementing these Orders. The Wife’s property is highly geared but I note she entered into the building contract at a time when she knew the previous determination for property settlement was under appeal.
Whilst I accept that there is a risk that the Wife may have to sell her home that is a risk consequent to litigation. The Wife may be able to borrow from friends or a financial institution. It may be that a proper valuation would reveal the house is worth considerably more than it has been valued at for the purpose of these proceedings.
Looking at the matter holistically I am satisfied that the Orders reflect a just and equitable settlement as between the parties.
I propose to make Orders in the following terms:
1.That within two (2) calendar months of the date of this Order the Wife pay to the Husband the sum of $54,962.
2.In the event that the amount is not paid within the time stipulated the property at M in the State of New South Wales is to be sold. Upon sale the moneys are to be disbursed as follows:
i.in payment of costs of sale including legal fees, agents commission and costs of putting the property in order to allow sale to take place;
ii.in payment of mortgage balance;
iii.the sum of $54,962 plus interest to the Husband;
iv.the balance to the Wife.
3.The Husband is appointed trustee with power of sale for the purpose of giving effect to paragraph (2) of these Orders.
4.Each party be solely entitled to the exclusion of the other party to all property in the possession of that party as at the date of these Orders and for the purpose of this Order property includes all furniture, chattels, superannuation, other work entitlements and money standing to the credit of the parties in their bank accounts and any motor vehicle in the possession of those parties.
5.That each party be solely liable for and indemnify the other party in respect of all liability attaching to any item of property to which that property is entitled pursuant to these Orders or any debt in the name of that party.
6.A Registrar of the Family Court of Australia is appointed to execute any document in either party’s name and do all acts and things necessary to give validity to any documents that are required to be executed.
7. Each party has permission for liberty to apply.
I certify that the preceding one hundred and twenty-nine (129) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Barry
Associate
Date: 29 June 2007
Key Legal Topics
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Family Law
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Equity & Trusts
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Civil Procedure
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Costs
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Remedies
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Injunction
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