Hammond and Fitch
[2009] FMCAfam 482
•15 May 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HAMMOND & FITCH | [2009] FMCAfam 482 |
| FAMILY LAW –Property – value of former matrimonial home – “offer” to purchase – adding back to asset pool – shares sold by husband – husband’s failure to continue loan repayments – contributions – wife’s medical and psychological difficulties – wife’s employment prospects. |
| Family Law Act 1975 (Cth), ss.75, 79 |
| C (2005) FLC 93-220 Lee Steere (1985) FLC 91-626 Ferraro (1993) FLC 92-335 Clauson (1995) FLC 92-595 Hickey (2003) FLC 93-143 Russell v Russell (1999) FLC 92-877 Townsend and Townsend (1995) FLC 92-569 Re NHC & RCH (2004) FLC 93-204 C and C [1998] FamCA 143 AJO v GRO (2005) FLC 93-218 Wilde & Wilde [2007] FamCA 1044 Gollings and Scott (2007) FLC 93-319 M and M [1998] FamCA 42 Rolfe and Rolfe (1979) FLC 90-62 Mallet v Mallet (1984) FLC 91-507 Bigelow & Reuter [2006] FamCA 1455 |
| Applicant: | MR HAMMOND |
| Respondent: | MS FITCH |
| File Number: | LNC 799 of 2007 |
| Judgment of: | Roberts FM |
| Hearing dates: | 22 & 23 January, 12 February 2009 |
| Date of Last Submission: | 12 February 2009 |
| Delivered at: | Launceston |
| Delivered on: | 15 May 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr M Trezise |
| Solicitors for the Applicant: | McGrath & Co Lawyers |
| Counsel for the Respondent: | Mr F Dixon SC with Ms E Turner |
| Solicitors for the Respondent: | Temple-Smith Partners |
ORDERS
That whenever a splittable payment is payable in respect of the superannuation interest of MR HAMMOND (“the husband”) in the [W] Superannuation Fund (“the Fund”):
(a)MS FITCH (“the wife) is entitled to be paid an amount calculated in accordance with the Family Law (Superannuation) Regulations 2001, using a base amount in the sum of $108,000.00 at the operative time, being four (4) working days from the service of a certified copy of this Order on the trustee of the Fund (“the Trustee”);
(b)there is a corresponding reduction in the entitlement of the husband but for this order; and
(c)this order binds the Trustee or trustees from time to time of the Fund.
That subject to the next succeeding Order hereof the parties must do all acts and execute all documents necessary to sell at market value the property known as Property W in Tasmania and comprised in Certificate of Title Volume [2] Folio 1 (“the property”) by private treaty and the property is to be listed for sale with such real estate agent (“the Agent”) as the parties may agree or, failing agreement, as nominated by the President of the Real Estate Institute of Tasmania.
That for the purposes of the preceding Order hereof:
(a)the listing price for the property shall be as agreed between the parties, or failing agreement, as determined by the Agent; and
(b)the husband must co-operate in every way with the Agent in relation to the marketing of the property including making a key available, allowing inspection of the property at times reasonably requested by the Agent and ensuring that the property is in a neat and clean condition at the time of inspection by any prospective purchasers
That if the property is not sold within three months of its listing for sale with the Agent, the parties must do all acts and execute all documents necessary to procure the sale of the property by public auction in accordance with the following:
(a)the parties must place the property with Auctioneers agreed between them or, failing agreement, as nominated by the President of the Real Estate Institute of Tasmania (“the Auctioneers”) for the sale of the property by public auction at the earliest reasonable time;
(b)the parties must execute all documents requested by the Auctioneers for the sale of the property;
(c)the reserve price for the sale of the property will be as agreed, or failing agreement, as determined by the Auctioneers;
(d)the parties must give instructions to a legal practitioner (mutually agreed upon by the parties or if they are unable to agree, a legal practitioner nominated by the President of the Law Society of Tasmania) for acting on the sale of the property including the preparation of a contract and such other documents as are necessary for the sale of the property;
(e)the husband must co-operate in every way with the Auctioneers in relation to the auction of the property including making a key available, allowing inspection of the property at times reasonably requested by the Auctioneers and ensuring that the property is in a neat and clean condition at the time of inspection by any prospective purchasers; and
(f)the parties (or their properly authorised agents) must attend at the auction sale in order to negotiate with the highest bidder if the highest bid does not reach the reserve price.
That until completion of the sale the husband has the right to occupy the property subject to paying council and water rate instalments and household building insurances as they fall due and keeping the property in a neat and clean condition.
That upon completion of the sale pursuant to these Orders, the proceeds of sale will be paid in the following manner and priority:
(a)payment of agents’ fees and commission due on the sale;
(b)payment of legal costs on the sale;
(c)payment of such fees as are necessary to discharge Mortgage No. [C] registered on the title to the property in favour of the Commonwealth Bank of Australia;
(d)payment of any liability to the husband’s mother not exceeding the sum of $86,468;
(e)payment to the wife of a sum calculated in accordance with the formula “S = 65% of (A plus $53,580.00) minus B” where:
(i)S = the sum payable to the wife;
(ii)A = the balance of the proceeds of sale of the property after payment of the amounts referred to in paragraphs (a), (b), (c) and (d) above; and
(iii)B = $16,695.00
(f)payment of the remaining balance to the husband.
That the husband must pay, indemnify the wife and keep her indemnified against any payment of money owed or claimed to be owed by the parties or either of them to the husband’s mother.
That unless otherwise specified in these Orders:
(a)each party will be solely entitled to the exclusion of the other to all property in the possession of such party as at this date;
(b)each party will be solely liable for and indemnify the other against any liability encumbering any form of property to which that party is entitled pursuant to these Orders;
(c)each party will remain solely liable for their respective debts.
That the parties and the Trustee each have liberty to apply in relation to the implementation of these orders.
That save as to costs all extant applications are otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Hammond & Fitch is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT LAUNCESTON |
LNC 799 of 2007
| MR HAMMOND |
Applicant
And
| MS FITCH |
Respondent
REASONS FOR JUDGMENT
Applications
This matter concerns competing property settlement applications by MR HAMMOND (“the husband”) and MS FITCH (“the wife).
In his Application filed 11 December 2007 the husband seeks a division of the party’s assets on the basis of 70% to himself and 30% to the wife. However, in his trial affidavit he states that he is seeking “a division of the net matrimonial assets 50% to me and 50% to
Ms Fitch”.In the Case Outline filed on his behalf, and in submissions by his counsel, it was suggested that the overall division should be 52.5% to the husband and 47.5% to the wife.
In her Response filed 8 February 2008 the wife was seeking a division of 65% to her and 35% to the husband. She maintained that position in relation to the non-superannuation assets at the hearing.
At the hearing, the parties agreed that the Court should adopt the approach of having two separate asset pools; those being a superannuation pool and a non-superannuation pool. (This accords with the decision of the majority in C v C.[1]) The parties also agreed that there should be a superannuation splitting order which would result in them each having superannuation interests of approximately equal value. Consequently, the dispute between them relates only to the distribution of the non-superannuation assets. The husband wants 52.5% and the wife wants 65% by value.
[1] (2005) FLC 93-220
Background
The parties are both nearly 50 years old and were married in the United Kingdom in December 1986 after meeting in the Middle East. They migrated to Australia in 1987, settling initially in Western Australia before moving to Tasmania in 1989.
They have two children who are aged 20 years and 18 years. The older child is a university student in Hobart and the younger child continues to live with the husband. He was to start an apprenticeship shortly after the hearing.
The parties separated under the same roof in mid-2004 and continued to live in the former matrimonial home until the wife moved into rented accommodation in July 2006.
The parties purchased and sold a number of properties over the years. However, much of the dispute between the parties centred on the value of the real estate that they purchased in Tasmania in 1996, which they still own; a small farm of approximately 22 hectares near Property W (“the property”). I shall refer to that in more detail below.
During their time together, the husband was primarily employed full-time and the wife worked in part-time and temporary positions on occasions.
In early 1996, while holidaying in France, the wife had an accident when skiing. She dislocated her right shoulder and broke her right upper arm. The arm was immobilised for a period, which resulted in a “frozen shoulder”, from which she has not completely recovered.
In April 1997 the wife fell from a horse and suffered some serious injuries. In addition, the wife had a number of other medical difficulties in the years that followed. Those medical difficulties were further compounded by a serious car accident that she had in July 2006.
The wife continues to have medical and psychological assistance and I shall refer to that further below.
Shortly prior to the hearing on the husband obtained new employment. His salary is $114,000 per annum and his employer provides him with a car, lap-top computer and mobile telephone.
The wife is a part-time student, in receipt of a Disability Support Pension. She is completing only two units at university and has six class hours per week. She also receives an educational supplement to her pension and rental assistance.
Relevant law
The Court’s approach to the determination of an application for the adjustment of property interests has been well established by authority[2]. It is essentially a multi-step process to:
·firstly, identify the property, liabilities and financial resources of the parties (usually at the time of the hearing);
·secondly, evaluate the contributions made by the parties as defined in section 79(4)(a) to (c) of the Family Law Act 1975 (“the Act”); and
·thirdly, consider the matters referred to in section 75(2) of the Act, if they are relevant
[2] See Lee Steere (1985) FLC 91-626, Ferraro (1993) FLC 92-335, Clauson (1995) FLC 92-595, Hickey (2003) FLC 93-143 and C v C (2005) FLC 93-220.
In determining what orders the Court should make under section 79, the Court must also be satisfied that it is just and equitable in all the circumstances to do so.[3] This is often referred to as the fourth step and has been described by one commentator as “the overriding caveat”[4].
[3] See section 79(2) and Russell v Russell (1999) FLC 92-877.
[4] See Australian Family Law & Practice, Vol. 2 at ¶37-640
The assets
As mentioned above the parties agree that the Court should adopt the approach of having a superannuation asset pool and a non-superannuation asset pool.
The parties also agree that the total value of their superannuation is $236,644 and that there should be a superannuation splitting order to give effect to an equal division of their superannuation. In this regard, they agree that a base amount of $108,000 should be allocated to the wife from the husband’s superannuation interest.
In relation to the non-superannuation assets, those about which there is no dispute are as follows:
Husband’s furniture & effects
$3,000
Tractor
$6,000[5]
Husband’s share portfolio
$7,885
Wife’s Hyundai Excel
$2,500
Wife’s furniture & effects
$10,825
Balance of Wife’s bank accounts
$3,370
Total
$33,580
[5] Husband values his half-share of the tractor at $3,000 and that is accepted by the wife.
In his affidavit sworn 30 October 2008 the husband says that his tools and farm equipment are worth $13,940. However, in his financial statement sworn on the same day, he says that they are worth $20,000. Not surprisingly, he would like me to adopt the lower of those two values, while the wife would like me to adopt the higher value. I do not have any sworn valuation evidence in relation to the tools and farm equipment, but the husband must have been thinking carefully about financial matters when he completed his financial statement, so I intend to adopt a value of $20,000 for those assets. That will make the total value of the assets referred to in the table above and the tools and farm equipment $53,580.
Of those, the husband retains assets worth $33,885 and the wife retains assets worth $16,695.
The value of the wife’s shares
Both parties appear to accept that the wife has 86 shares in a UK based company, [C]. During the hearing I obtained information from the internet about the trading price of those shares and the exchange rate from Pounds Sterling to Australian Dollars. Counsel for each party appeared to accept then that they had a value of approximately $21,000.
Unfortunately, I misled both counsel because I wrongly believed the share price to be quoted in “Pounds Sterling”, whereas the price was in “Pence Sterling”. This was subsequently pointed out in correspondence from the wife’s solicitors so the matter was listed for mention by telephone on 12 February 2009. At that time the husband’s counsel appeared to accept the error that I had made in the trading price, and that in early February those shares were worth only $241.
When considered in relation to the total value of the parties’ assets, that is a very small sum indeed, especially when one takes into account that there would be some cost in realising that value, in terms of both broker’s and exchange rate commissions. In the circumstances, I intend to apply the principle of de minimis non curat lex and exclude those shares from consideration.[6]
[6] For a discussion of the application of the de minimis principle see the Full Court decision in Milankov and Milankov (2002) FLC 93-095
There is also a dispute between the parties about whether or not the wife has shares in Rio Tinto registered in the United Kingdom. Because no satisfactory evidence was put before the Court about that, I am unable to come to any conclusion about that issue. In any event, it is clear that the wife received all her UK shares by way of an inheritance and the husband made no contribution to their acquisition.
The value of the former matrimonial home
There was a significant dispute between the parties over the value of the property (i.e. the small farm of approximately 22 hectares near Property W). Exhibit “W1” shows that as at 20 December 2007 the property was valued at $460,000 for the purposes of enabling the husband to borrow funds.
It is the wife’s case that the property is worth considerably more than that, because an offer was made in May 2008 by a family friend (“the friend”) to purchase the property for $600,000. It is alleged that the husband would not accept that figure because he wanted to clear $600,000.
The friend swore an affidavit on 15 October 2008 in which he stated that he instructed a named real estate agent (“the agent”) to put a contract for the purchase of the property to the husband. A copy of a contract is annexed to the friend’s affidavit.
It was the evidence of the husband that he did not see that contract until he saw the friend’s affidavit, which had been provided to his solicitors in January 2009. He also stated that the agent had telephoned him one Saturday night in May 2008 and he told the agent then that the property was not for sale. The agent wanted to see the property and came the following day. The husband said that he did not consider any offer to be serious because there nothing was put to him in writing. He also said that the agent:
·was unsure about the offer;
·did not believe it to be genuine; and
·was not sure why he was being asked to present an offer to the husband.
When it was put to the husband that the agent had come back and put a further offer, his evidence was that he had not had any contact with the agent after that Sunday when the agent attended at the property.
On 10 December 2008 a subpoena had been issued at the request of the wife’s solicitors to require the agent to attend Court on 22 January 2009 to give evidence and produce documents. A copy of the subpoena and conduct money were served upon the agent on 12 January 2009. However, when the agent was called to answer that subpoena on 22 January 2009, he did not attend. Senior counsel for the wife asked me to issue a Warrant for his arrest and for it to lie in the Registry. I indicated that the agent should be contacted and informed of the request for a Warrant and that he should be told that he was required to attend on 23 January 2009. (In fact, he did not attend at the start of Court on 23 January 2009, so a Warrant was issued. However, he attended later in the day and the Warrant was discharged.)
It was only when I asked some questions of counsel during cross-examination of the husband on 22 January 2009 that I was informed that the agent had in fact sworn an affidavit. I then directed that his affidavit be filed and a copy be provided to counsel for the husband. I then adjourned to allow the husband to provide instructions to his counsel in relation to that affidavit (notwithstanding that he was being cross-examined) and then permitted his counsel to ask further questions as examination in chief.
The agent’s affidavit reads in part as follows:
In May 2008 I received instructions from (the friend) to approach the owners of (the property) and put an offer to them for the purchase of that property. My instructions were to approach the owners with an “anonymous purchaser”.
I recall that on or about Saturday 24 May 2008 I attended at the property and spoke with a man who identified himself as (the husband). I put the offer of purchase to him.
That offer was rejected by him.
When I returned to (the friend) I advised him that the offer was rejected. (The friend) then instructed me to return to (the husband) and put a further offer to him in terms that were satisfactory to him. I received a response from (the husband) that the offer to purchase was rejected.
The husband’s evidence in response to that was that no formal offer had been made during discussions with the agent and he confirmed that there had been no further discussion or phone calls after the Sunday as had been previously stated by him.
The wife’s evidence in relation to the “offer” by the friend was that he (the friend) had initially rung her and told her that somebody wanted to purchase the property. He had not said who that person was in that first conversation. Although she could not recall the exact date that she had spoken to the friend, she thought that the conversation would have been a few days before her solicitors sent a letter to the husband’s solicitors on 26 May 2008.[7]
[7] The letter is Exhibit “W2”
The wife said that her reaction to the friend’s telephone conversation was one of curiosity and she asked the friend how much the purchaser was prepared to pay. Her evidence was that the friend had said that the matter was confidential but that he had heard that when $525,000 had been offered, the husband had laughed and said that he would only sell it for “$600,000 clear”.
The wife’s evidence was that the friend had revealed that he was in fact the potential purchaser in a conversation a few days after that. He had said that he was prepared to wait, but some months later he had told her that he had “moved on”.
The wife conceded that she must have had discussions with her lawyer about a sale of the property at that time but stated that she could not force the husband to sign a contract. She said that her instruction to her lawyer was to continue negotiations on the basis that the property was worth $600,000.
The wife now believes that the property is worth about $575,000. She bases that upon her belief that the friend had been prepared to pay $620,000 but there has since been a general reduction in property values.
While the husband may believe that what is described above was really “a set up” on the part of the wife and/or the friend to artificially inflate the value of the property, either for the purposes of negotiations or for these proceedings, that is all somewhat academic now. That is because the husband no longer wishes to retain the property and I accept his counsel’s submission that I cannot force him to take the property.
I also accept the submission by the husband’s counsel that it was open to the wife to make an application to have the property sold but she did not do that. It is very clear from her evidence that she was actively instructing her lawyer at that time but she chose only instruct her lawyer to adopt a value of $600,000 for the purposes of negotiations. She must therefore accept her share of the responsibility for any lost sale (if indeed there ever could have been such a sale).
Consequently, there must now be a sale of the property and any adjustment between the parties will need to be made from the sale proceeds.
Should there be any “adding back” to the asset pool?
After the parties separated the husband continued to trade in shares. The husband’s affidavit sworn 30 October 2008 states that in September 2007 he sold shares that he “had accumulated since separation” and realised $82,127. He also says that sold further shares in approximately June 2008 and realized a further $13,000.
At the time of the hearing, he had not lodged his 2008 tax return, but he estimated that he would have a tax liability because of share sales of approximately $25,000.
Senior counsel for the wife sought to persuade me that I should add back into the asset pool an amount that takes account of the share sales since separation, allowing for a reasonable estimate of tax liability. He relied upon the decision in Townsend and Townsend[8] and stated that the sales of those shares amounted to a “premature distribution”.
[8] (1995) FLC 92-569
In Townsend the husband had sold a taxi licence after the separation of the parties and had spent much of the proceeds for his own benefit. Nicholson CJ said:[9]
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband's receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.
[9] At page 81,654
In that case Fogarty and Jordan JJ agreed with the reasoning of Nicholson CJ, but Fogarty J added:
Whilst the terms of section 79 and the leading cases in this Court upon it make it clear that the property of the parties and their contributions are to be assessed as at the time of the trial, nevertheless the Court is entitled to and should in appropriate cases give direct weight to any premature distribution before trial of property by one party and should do so in the way which the Chief Justice has indicated.
In Re NHC & RCH, [10] Finn, Kay and May JJ appear to have endorsed the remarks of Nicholson CJ, Ellis, Kay JJ in the unreported decision of C & C, [11] when they quoted paragraph 46 as follows:
Whilst not seeking to place a fetter upon the exercise of discretion of a trial judge in individual cases, it seems to us that the concept of adding monies reasonably disposed of back into the pool ought to be the exception rather than the rule. The parties are entitled to reasonably conduct their affairs post-separation in a manner that is consistent with properly getting on with their lives.
[10] (2004) FLC 93-204
[11] [1998] FamCA 143
In AJO v GRO[12], Holden, Warnick and Le Poer Trench JJ said at paragraph 39:
Her Honour seems to be saying that the mere fact that a party has expended money realised from the disposition of assets that existed as at the date of separation, will result in that expenditure being added back “in the usual way” as a premature distribution of assets with nothing more. If that is what her Honour is saying, in our view, she is being unduly simplistic. In our opinion, it was a necessary requirement for her Honour to examine and make some assessment of the reasonableness or otherwise of the expenditure.
[12] (2005) FLC 93-218
In a 2007 decision of the Full Court of the Family Court[13], Bryant CJ, Finn and Boland JJ said:
The question of constructing a notional pool of property for division between parties in proceedings under s 79 is not without difficulty and has been the subject of a number of decisions each dealing with differing factual situations. (See Townsend and Townsend (1995) FLC 92-569; C and C [1998] FamCA 143; Re NHC & RCH (supra); AJO v GRO (2005) FLC 93-218 and Gollings and Scott [2007] FamCA 397[14]). These cases all recognise the discretion reposed within the trial Judge in adjusting property between parties pursuant to s 79. The discretion in relation to living expenses post separation was specifically addressed in M and M [1998] FamCA 42 and C & C [1998] FamCA 143
[13] Wilde & Wilde [2007] FamCA 1044
[14] Reported at (2007) FLC 93-319
In M & M their Honours Baker, Kay and Chisholm JJ put the principle succinctly when they said:[15]
There seems to be no appropriate basis for notionally adding back moneys that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses. Neither the Family Law Act nor the case law require that parties go into a state of suspended economic animation once their marriage breaks down pending the resolution of their financial arrangements. Parties are entitled to continue to provide for their own support. Whether any expenditure so incurred is reasonable or extravagant is a matter that can be determined by the trial Judge.
[15] [1998] FamCA 42 at paragraph 2.11
In my view, that applies as much to money or assets that existed at separation as it does to those that came into a party’s possession after separation.
In this matter, the husband sets out in his affidavit[16] how the proceeds of the share sales were used. I find that all his expenditure was reasonable and consistent with getting on with his life, save for what he refers to as expenditure on holidays in 2005 and 2006. Clearly, it is inconsistent to claim payment for those holidays from proceeds of sales that were not obtained until late 2007 and mid-2008. Further, in the absence of evidence to the contrary, I accept that the shares were accumulated after separation, so it would not be appropriate to add anything back into a notional asset pool as a result of the sales, nor would it be appropriate to bring into account the husband’s liability for tax on those sales.
[16] At paragraphs 50 and 51
Senior counsel for the wife would also have me add back a further sum because the husband stopped repaying the housing loan after the wife left the former matrimonial home in June 2006. In this regard, the husband says that the loan liability to be taken into account is $86,470, whereas the wife says it should only be $62,926.
At some time in 2004 the husband paid off the parties’ housing loan from the Commonwealth Bank with funds that he borrowed from his mother. It is clear that he did that without any prior consultation with the wife. However, it appears that the Commonwealth Bank mortgage has not been discharged, and that the husband’s mother has not secured her loan by a registered mortgage.
Exhibit “W4” is a loan repayment schedule that appears to have been prepared by the husband showing the required repayments to his mother of both capital and interest at 5.5%. That document appears to show that the last payment made by the husband was in June 2006 and that his mother was owed $86,468 at that time. It also appears to show that if the husband had kept up the payments of capital and interest, the balance owing at the time of the hearing would have been $62,926.
It is the wife’s contention that the husband had the ability to keep up the payments, and that had he done so, the parties’ asset pool would have been worth more. As I understand the argument put forward by her counsel, the difference of $23,542 should therefore be “added back” to the asset pool if the loan liability is accepted to be $86,468.
In my view, that is a somewhat simplistic argument and it does not take account of the fact that the husband’s mother does not appear to have claimed any unpaid interest for that period of approximately
18 months. I therefore consider it to be more appropriate to fix the liability to the husband’s mother at $86,468 but also make orders that the husband be responsible for, and indemnify the wife against any payment to his mother in excess of that sum.
Contributions
Counsel for the wife contends that the parties made equal contributions at the start of the marriage. The husband says that, apart from personal effects, he had savings of $US25,000 and the wife had a share portfolio worth approximately 25,000 Pounds Sterling. They pooled some of their funds to bring a Range Rover to Australia when they migrated here. Unfortunately for them, they had to pay substantial import duties and it was sold shortly after they arrived.
During the marriage the husband was the primary bread-winner, in that he was employed full-time and the wife was employed part-time on occasions. However, I accept the wife’s evidence that her contribution as homemaker and parent were greater than those of the husband. It logically follows that, if the husband was working full-time, the wife was more available to undertake those homemaker and parenting duties.
It is also clear that the contributions “made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent”[17] should not merely be recognised in a token manner, but rather, they should be recognised in a substantial way.[18]
[17] See section 79(4)(c)
[18] See Rolfe and Rolfe (1979) FLC 90-62 and Mallet v Mallet (1984) FLC 91-507
In Bigelow & Reuter[19], Kay J (sitting as the Full Court of the Family Court of Australia) said:
What was the relevant finding is that the wife, whatever she was doing in the course of the relationship, was not able to earn money at the same rate that the husband was able to earn, but there is nothing to indicate that she was not pulling her weight in terms of effort and endeavour.
[19] [2006] FamCA 1455
In my view, the same applies in this matter.
I am also satisfied that the wife contributed in a meaningful way to the parties’ joint farming enterprise. Indeed, it is unfortunate that the husband does not properly acknowledge the contributions that she made. For example, on one occasion the wife continued the farming activities alone (which were made more onerous by her health difficulties) while the husband and the two children went on holiday. Further, I accept her evidence that she continued her part time work at times and her homemaker duties as well, notwithstanding that she was in significant pain. When she was questioned about that her response was to say: “Life does not stop because one is in pain.”
Although I am sure that the husband’s contributions to the farm and to home life were made more difficult because of the wife’s accidents and health difficulties, it is unfortunate that the husband appears not to recognise how much more difficult the wife’s contributions must have been for her.
The husband may have made some greater contributions in relation to the property after separation. However, I note that he has had the benefit of living on the property during that time and, as mentioned above, he did not keep up the loan repayments to his mother, so it logically follows that his financial contributions have been less since mid-2006.
It is clear that the task to be undertaken by a trial Judge in assessing weight to be attached to contributions is not always an easy one and is not discharged by a strict accounting exercise.[20] However, when I consider the evidence in this matter, I am satisfied that it is appropriate to assess the parties’ overall contributions as being of equal value.
[20] See Clives and Clives (2008) FLC 93-385 at paragraph 44
Section 75(2) factors
The husband is just 50 years old and the wife will be that age shortly.
As mentioned above, the husband’s salary is $114,000 per annum and his employer provides him with a car, lap-top computer and mobile telephone, whereas the wife is a part-time student, in receipt of a Disability Support Pension. Clearly, the husband is much better off than the wife on a day to day basis.
It is quite clear that the wife suffers from some serious medical difficulties which currently affect her ability to obtain employment. Her doctor says that she suffers from:
a)mixed anxiety and depressed mood;
b)chronic pain syndrome from her past right ulna fracture;
c)chronic back pain (which was severely aggravated by her motor vehicle accident); and
d)memory loss and thought processing difficulties.
Her doctor says that her memory loss and thought processing difficulties affect her daily life, with a need for effort in problem solving. She goes on to say that the wife will require “ongoing conservative management of her pain and her mood disorders”.
The husband’s solicitors required the wife to see a Consultant Occupational Physician as part of the pre-trial procedures. He provided a long affidavit, which included the following:
It is difficult not to make mention of the psychiatric condition as it would appear that Ms Fitch is suffering with a chronic pain situation and that her failure to cope can be attributed to the fact that she is in all probability depressed at this time. No doubt further information will be obtained from the psychiatrist but from an occupational physician’s perspective and in assessing the capacity to perform activity one would state that the depression is probably having a significant impact on her capacity to cope.
Ms Fitch is having antidepressant treatment, and presumably with improvement in her depression that will occur with the help of medication and time it is anticipated that her capacity to cope with the pain that she experiences will allow her to have a better quality of life.
After noting that the wife takes six different types of medication and is having regular chiropractic treatment, he went on to say:
I anticipate that Ms Fitch will need to continue the antidepressant medication as well as the analgesic medication. I would anticipate that when the property settlement has been finalized Ms Fitch will be better in herself and be able to move forward. I would anticipate that when her depression and anxiety eases, her capacity to cope with the symptoms she experiences will improve and that she will be able to function with less disability than she currently reports .I would anticipate that with the antidepressant treatment fulfilling the expectations, her depression will ease and she will require less antidepressant medication.
It is too early to speculate as to whether Ms Fitch will have permanent impairment.
Ms Fitch states that she feels she has the capacity to work part-time for up to two days per week. I would anticipate that her capacity to work for more than two days per week will eventuate and would hope that Ms Fitch would have the capacity to work full-time as the depression eases. Ms Fitch is studying part-time for a further university degree. It is not known what the further degree will lead to as it involves history and indigenous affairs but it would be fair to assume that the obtaining of a new degree will open up other opportunities for her.
The wife’s psychologist had also provided a report and he gave evidence. His opinion was as follows:
Ms. Fitch has provided a history of being a reasonably intelligent, capable, well- travelled and experienced person whose working life essentially ceased in 1997 when she fell from a horse and injured her lower back. I have been seeing her regularly since April, 2006, and have been concerned about her extremely high level of distress, her dysfunctionality, and her odd personal style.
My formulation is that pain has been her primary complaint. This has created a secondary depressive illness, and amplified her underlying tendencies to experience psychotic thoughts, exhibit eccentric behaviours, and be anxious and socially avoidant. She has been seen by a large range of specialists in psychiatry, clinical psychology, pain management, and rheumatology. She has tried a wide range of pain and psychiatric medications including narcotic analgesics with only moderate effect.
Many chronic pain sufferers develop neurocognitive difficulties such as impaired attention and memory, and slowed rate of mental processing, and I think Ms. Fitch is one of them. High levels of chronic pain, severe depression, and high levels of pain medication can all have a detrimental effect on cognitive functioning. While Ms. Fitch is still capable of writing assignments for university studies, I do not think she is able to function reliably or efficiently enough to manage anything more than limited casual employment of around 10 hours per week where she can work her own hours by herself subject to her pain level. At present I do not believe she could manage any work at all unless she ceased her studies.
Unless there is a major medical breakthrough with her condition I do not anticipate that her current level of functioning is amenable to great improvement. Her severe depression might moderate to some extent when her family law proceedings have been completed, but her pain is most likely to persist and to continue to distress her almost as much as at present. One of the important goals for me in seeing Ms. Fitch is to monitor her depression and intervene if I perceive that she is presenting a significant risk of self-harm.
When she gave evidence, it was very clear that the wife was both in pain and distressed. She was crying at times and she needed to stand in order to lessen her discomfort. If her time giving evidence was indicative of her ability to function, I would be very surprised if she could manage “limited casual employment of around 10 hours per week where she can work her own hours by herself”.
However, even if I am wrong about that, there are factors that militate against her finding suitable employment. They are that:
a)she is almost fifty years of age;
b)she would be seeking to work ten hours per week during times that she would determine, not the employer; and
c)she is living in a part of Tasmania that is well known to be economically depressed in comparison to many other parts of Australia.
When I consider those factors, I cannot help but conclude that her chances of finding suitable employment are very slim indeed.
Neither party has the care or control of a child of the marriage who has not attained the age of 18 years[21]. However, counsel for the father says that the husband “presently has the responsibility of providing for the day to day accommodation and needs of their son”. In my view that is of negligible relevance because their son was to start employment as an apprentice shortly after the hearing and, in any event, he has attained the age of 18 years.
[21] See section 75(2)(c).
Counsel for the father also submitted in his Case Summary that the “connection between the Section 75(2) factors and a just and equitable property Order does not invite a process of social engineering” and referred me to page 81-912 of Clauson.[22] He also referred me to Hirst and Rosen, [23] where Nygh J had said:
I also reject any argument based solely upon the disparity in financial resources between the parties. Section 79, as I have indicated in argument, does not entitle the Court to adopt “a soup kitchen” approach.
[22] (1995) FLC 92-595
[23] (1982) FLC 91-230
In my opinion, his submissions are correct, but section 75(2) does require me to have regard to “a standard of living that in all the circumstances is reasonable”[25] and “the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration”[26]. In this regard, it is clear that:
·the husband has, and will continue to have a better standard of living than the wife; and
·the marriage lasted for more then seventeen years and the wife is, by virtue of her age and lack of employment experience during that time, in a worse situation economically than the husband.
[25] Paragraph (g)
[26] Paragraph (k)
When I consider all these matters, I conclude that the wife should receive a substantial adjustment under section 75(2) and I consider an adjustment of 15% in relation to the non-superannuation assets to be appropriate.
Conclusions
Given what I have said above, I conclude that it is just and equitable for there to be orders that will provide for the following:
a)a superannuation splitting order allocating a base amount of $108,000 to the wife;
b)the sale of the property, with the husband to be responsible for meeting the outgoings until it is sold;
c)a provision that the liability to the husband’s mother be set at $86,468, and that the husband be responsible for, and indemnify the wife against any payment to his mother in excess of that sum; and
d)the wife to receive 65% of total value of the non-superannuation assets and the husband to receive 35%.
I do not appear to have been provided with evidence of procedural fairness to the trustee of the husband’s superannuation fund, so I will allow the parties and the trustee liberty to apply in relation to the implementation of the superannuation splitting orders.
I certify that the preceding eighty-four (84) paragraphs are a true copy of the reasons for judgment of Roberts FM
Associate:
Date:
[24] See page 77,251
0
6
1