Hart and Cruickshank
[2004] FMCAfam 668
•2 December 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HART & CRUICKSHANK | [2004] FMCAfam 668 |
| FAMILY LAW – Property – just and equitable division of net assets – global and asset by asset approach – direct and indirect contributions by each party – credit of each party’s evidence. |
Family Law Act 1975 (Cth), ss.75(2), 79
Lee Steere and Lee Steere (1985) FLC 19-626
Ferraro (1993) FLC 92-335
Clauson (1995) FLC92-595
Russell and Russell (1999) FLC 92-877
Pastrikos and Pastrikos (1980) FLC 91-987
In the Marriage of Lee Steere and Lee Steere (1985) FLC 91-626
Whitely and Whitely (1996) 92-684
Tuck and Tuck (1981) FLC 91-021
McMahon and McMahon (1995) FLC 92-606
Norbis v Norbis (1986) 161 CLR 513
Zyk v Zyk (1995) FLC 92-644
Quinn (1979) FLC 90-677
Kerr (Full Court of the Family Court) 11 August 1995 (unreported)
Danielan v Danielian [2003] FamCA 473
Brown v Green (1999) 25 Fam LR 483
Harris (1991) FLC 92-698
Neneke (1996) FLC 92-698
Judkins and Santamaria [2003] FamCA 618
| Applicant: | DELIA JEANIE HART |
| Respondent: | GAVIN KENNETH CRUICKSHANK |
| File No: | BRM 4706 of 2003 |
| Delivered on: | 2 December 2004 |
| Delivered at: | Townsville |
| Hearing date: | 19 August 2004 |
| Judgment of: | Coker FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Burke |
| Solicitors for the Applicant: | Frank Carroll Solicitor |
| Counsel for the Respondent: | Mr Galloway |
| Solicitors for the Respondent: | Simonidis Shoebridge Lawyers |
ORDERS
That the Husband forthwith transfer to the Wife at the Wife’s expense all his right title and interest in and to the properties situate at Magellan Road, Springwood, more particularly described as Lot 59 of Registered Plan 122346 County of Stanley Parish of Redland, City of Logan, Walbrook Avenue, Springwood, more particularly described as Lot 276 on Registered Plan 133472 County of Stanley Parish of Redland, City of Logan and Barry Street, Slacks Creek, more particularly described as Lot 48 on Registered Plan 123142 County of Stanley Parish of Yeerongpilly, City of Logan.
That the Wife indemnify and keep the Husband indemnified in relation to all liabilities attaching to the said properties and that within 30 days of the date of these Orders effect a change in mortgage to release the Husband from any liability.
That the Wife indemnify and keep the Husband indemnified in relation to all monies owing to Peter Hart and Jeanie Hart.
It is declared that the Wife has no interest in and to the property held in the name of the Husband at 6/367 Cornwall Street, Greenslopes more particularly described as Lot 6 on BUP102447, County of Stanley, Parish of Bulimba, and further that the Wife has no interest in and to the 1988 Porsche 944 Turbo motor vehicle.
That each party otherwise retain as and for their own property absolutely all assets held in their name including but not limited to superannuation entitlements.
That each party do all acts and things and execute all deeds and instruments necessary to give effect to the Orders and that if either party refuses or neglects to sign any document within 7 days of a written request to do so, the Registrar of the Federal Magistrates Court of Australia is hereby appointed pursuant to the provisions of section 106A of the Family Law Act 1975 (as amended) to execute such documents on behalf of such party.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT TOWNSVILLE |
BRM 4706 of 2003
| DELIA JEANIE HART |
Applicant
And
| GAVIN KENNETH CRUICKSHANK |
Respondent
REASONS FOR JUDGMENT
These proceedings relate to an application for settlement of matrimonial property. The applicant is Delia Jeanie Hart whom I shall refer to as the wife. The respondent is Gavin Kenneth Cruickshank whom I shall refer to as the husband. The relationship between the parties is very short. Both agree that they met via internet correspondence in February 2002. Only a matter of weeks later the wife flew to Australia on 5 March 2002 and the parties commenced their relationship. They married on 9 March 2003 almost exactly one year after the wife travelled from the United Kingdom to Australia and separated, the wife says, on 24 July 2003 whilst the husband says 5 October 2003.
The wife travelled overseas during this time and in her evidence indicates that she came to the view that the marriage was at an end and that she was not returning to the relationship, from when she left Australia. The husband says that he was not aware of this until the return, or at least until some indications were given to him and therefore fixes the date some nine or ten weeks, after the wife. It is not that significant in the whole determination of the proceedings. Whether the relationship in its entirety is sixteen months or eighteen months is not overly significant.
The wife’s application commencing proceedings was filed 22 October 2003 the Orders sought by the wife in that initial application were as follows:
(1)the Husband assign to the wife all his right title and interest in the four pieces of realty owned by the parties as joint tenants.
(2)That the wife shall pay and indemnify the husband against liability for the debts of the parties to Macquarie Mortgages Pty Ltd in respect of the said realty.
(3)That the husband pay to the wife a sum of $30,000.00 being proceeds of two Porsche motor vehicles sold by the husband.
(4)That the husband repay monies borrowed from the wife’s patents William Hart and Jean Hart is the sum of $31,000.00 and from one Peter hart $32,000.00.
(5)That the husband pay the wife’s costs of these proceedings.
The wife also sought Orders on an interim basis particularly with regard to spousal maintenance however those matters were not later pursued.
The husband’s response was filed on 7 January 2004. The orders that he sought were in simple terms as follows:
That an accounting be made of the assets and liabilities of the parties and that the net assets be divided 50% to the husband and 50% to the wife.
At the commencement of the hearing each party provided a case outline and in that, filed by the husband, he detailed final Orders that he sought. Those Orders varied from the response in that the husband proposed that he retain the property registered in his name at Unit 6, 367 Cornwall Street, Greenslopes representing his initial contribution and that once an accounting was made of the assets and liabilities of the parties that the assets be divided equally between the parties after the wife is first paid the sum of $130,000.00. This was a change from the initial application which simply suggested the accounting of assets or liabilities and the equal division thereafter, without consideration of the amount brought in by the wife.
In summary, this is a very short marriage or relationship but one in which there has been significant positive movement in the value of the assets, held jointly by the parties. The wife was asked about the various properties that were purchased by them and the cost of the various properties, as well as sale price of the properties. Each of the properties purchased by the parties significantly increased in value. The property at 27 Marday Street, Slacks Creek was purchased for $90,000.00 and sold for $180,000.00. The property at 16 Barry Street, Slacks Creek was purchased for $107,000.00 and is valued, the wife says, at $170,000.00. The property at 15 Walbrook Avenue, Springwood was purchased for $215,000.00 and is valued at $270,000.00 and the property at 46 Magellan Road, Springwood was purchased at $225,000.00 and is valued at $290,000.00.
The parties in fact agreed upon those values and they accorded with the valuations provided by John Joseph Olive, a valuer engaged by the husband and the wife to prepare valuations.
On those figures, the increase in value from purchase price to current valuation is $273,000.00.
The husband, prior to the commencement of the relationship, purchased a unit situate at 6/367 Cornwall Street, Greenslopes. The husband says in his material that the property, at the commencement at the relationship, was valued at $78,000.00 and it was subject to a mortgage of a little in excess of $48,000.00. The husband’s equity therefore, was approximately $30,000.00. The husband says that he had other assets including a 1988 Porsche 944 Turbo as well as computer equipment, furniture and superannuation entitlements which had a total value including the Cornwall Street property of $127,622.00. Liabilities including the Cornwall Street mortgage as well a Suncorp Metway personal loan, Citibank credit card, ANZ card and Westpac credit card totalled $76,903.00 which left an equity, the husband says, of $51,719.00 in the assets held by him.
The wife says that when she came to Australia, on 16 June 2002 as a temporary resident, her assets totalled $196,575.11. The husband does not accept this amount as having been brought into the relationship by the wife. In his affidavit he says that the total bought into the relationship was $137,000.00 exclusive of the personal effects brought into the country by the wife in a shipping container. There is dispute therefore in relation to approximately $60,000.00 of assets, though at least in part that is attributable to the different values placed on the Porsche motor vehicles by the wife and the husband, being $40,000.00 and $27,000.00 respectively. There are however additional significant differences relating to monies held in accounts in the United Kingdom by the wife. These include a United Kingdom superannuation account with Predential valued at approximately $10,000.00 and monies held with Natwest Bank and Halifax Bank, of a little over $30,000.00.
One of the most significant difficulties that arrises in relation to this matter is the vehement disagreement between the parties in relation to almost every aspect of their relationship, including initial financial contributions, contributions both financial and indirectly to the acquisition and improvement of assets and disputes, particularly in relation to employment, of both the husband and the wife.
The Wife says that as a result of her significantly greater financial contribution toward the purchase of assets, as well as what she says are significantly greater financial and non-financial contributions during the relationship, that there should be a very significant if not total benefit received by her, as reflected in the Orders that are sought. The husband’s position is best reflected in the Orders detailed in his outline of case which are to the effect that each party should be put back in the position that they were in, prior to the commencement of the relationship and that thereafter, there should be an equal distribution of the assets, as between the parties. These briefly are the issues which are required to be determined by the Court, as the parties have been unable to resolve the matter.
Background
The husband is 40 years of age having been born on 5 May 1964. The Wife is 32 years of age having been born on 21 April 1972. The relationship as I have already indicated was only very short and the total period of cohabitation varies between 16 and 18 months. No doubt prior to final separation, but certainly subsequent to separation, the relationship between the parties has been unpleasant. There are allegations and counter allegations in relation to who may or may not have been responsible for keeping the other out of the properties of the parties and there were numerous allegations made by each against the other of a critical nature, both personally and financially. I shall address those matters more particularly when dealing with the evidence of the parties.
The Evidence
Each party was represented by experienced Counsel at the final hearing before me. Each had filed affidavits of their evidence in chief and had called other witnesses to give evidence. In the end only the husband and the wife were required to give brief additional evidence in chief and each was cross-examined by Counsel for the other party.
Insofar as the evidence of the other witnesses is concerned, they were only to limited degrees able to assist in relation to the determination of these proceedings, though on various matters their unchallenged evidence does carry some weight. Peter James Hart, a surveyor, of the United Kingdom, had previously been engaged to the wife, though they were not married and the wife indicates that the fact that they have the same surname is coincidental. The relationship between the wife and Peter Hart however was close and certain monies were lent by Mr Hart to the wife, following her move to Australia. The various amounts that were lent by Mr Hart to the wife totalled, he said, $31,077.46. The husband appears to acknowledge that those monies were received though does not necessarily acknowledge that they were utilised directly toward the purchase of various properties or to their maintenance and upkeep.
Mr Peter Hart says that he regards the money as repayable but says he has not made a formal demand for repayment. I accept the unchallenged evidence of Mr Peter Hart.
The wife’s mother Delia Jeanie Hart also gave evidence by way of affidavit and was not required for cross-examination. Mrs Jeanie Hart says that she advanced monies between July 2002 and November 2003 totalling $35,066.00. In particular I note however that the last two advances referred to in the affidavits of Jeanie Hart were for payments on 25 August 2003 and 7 November 2003. Both of those payments clearly were made after the date that the wife says separation occurred. The total of those two advances is almost exactly $7,000.00 and whilst I have no doubt that the advances were made to the wife, it would be inappropriate, in my view, to attribute any advance made after the date the wife says separation occurred, for the benefit of both the husband and the wife.
Mrs Jeanie Hart also says that the monies advanced by her to her daughter are repayable and that she understands that the monies will be repaid, as soon as the wife can redeem her investments in real estate in Australia. Again I accept the unchallenged evidence of Mrs Jeanie Hart in relation to the advances made to the wife.
The wife sought also to rely upon the evidence of John Olive, valuer who had attended to the valuations of the properties situated at 27 Marday Street, Slacks Creek, 16 Barry Street, Slacks Creek, 15 Walbrook Avenue, Springwood and 46 Magellan Road, Springwood. The valuations were not challenged and in fact, as I have previously indicated, appear agreed between the parties.
The husband also sought to rely upon the evidence of Terry Buckley, a registered valuer. Mr Buckley had prepared a valuation of the unit situate at 6/367 Cornwall Street, Greenslopes. Mr Buckley had given assessments of fair market value as $78,000.00 as at 5 March 2002 and at $113,000.00 as at 8 July 2004. Mr Buckley also was not required for cross-examination.
It would appear that the values attributed to the various properties including the two assessments of value at two different times provided by Mr Buckley were accepted and I have accepted the valuations, as unchallenged.
The husband had evidence provided by a number of witnesses, including family members, being his father, Kenneth Cruickshank, mother, Glenys Joy Cruickshank and sister, Jeneen Kay Thatcher. The evidence of Mr and Mrs Cruickshank, senior, related to works performed upon various properties owned by the parties. Neither Mr nor Mrs Cruickshank were required for cross examination. I accept the evidence of those witnesses in relation to their observations as to work performed both by Mr Cruickshank, senior and by the husband in these proceedings, as well as evidence as to expenditure made by Mr Cruickshank, senior, on the purchase of materials for work on the property at Marday Street, Slacks Creek.
The husband’s sister, Jeneen Kay Thatcher, gave evidence in relation to a 1986 Toyota Corolla motor car. She says that the vehicle was owned by her and was provided to her brother, for the use by her sister-in-law, the wife in these proceedings. She says that the vehicle was not paid for and was returned to her in or about July 2003. Ms Thatcher was not required for cross-examination and again I accept her evidence.
Jeffrey Alan Downes gave evidence as to his observations, from August to November 2002, in relation to work performed upon the property at Marday Street, Slacks Creek. He observed work being performed and direction being given to tradesman, by the husband. Although the observations of Mr Downes were of a limited nature I accept the truth of the matters raised by him and similarly accept the evidence of Ms Anne Maree Sheenan a tenant at the property at Marday Street, Slacks Creek from February 2003 to June 2004. She gives evidence of her observations of the husband performing work on the property at Marday Street and more particularly, she confirmed that she did not see the wife engaging or paying tradesman for work performed at the property. I accept Ms Sheenan’s evidence along with the evidence of Mr Downes.
Constantine George Simonidis is the solicitor for the father and he gave evidence in a brief affidavit filed 16 August 2004 as to monies received from the husband and held, on behalf of both the husband and the wife. He confirms that in October 2003 an amount of $9,247.00 was deposited into his trust account and that subsequently the deductions of $3,180.85 and $4,000.00 were utilised at the direction of both parties for expenses relating to various of the jointly owned properties. Mr Simonidis confirms that $2,066.15 is held currently in the trust account of Simonidis Shoebridge Lawyers.
The two primary witnesses, as is almost invariably the case in proceedings of a family law, nature are the husband and the wife. In this instance it is one of those unusual matters in which the Court is called upon to determine the overall issue of each party’s credit. Counsel for the wife contended, that in this matter it would be appropriate to accept on every occasion the wife’s evidence in preference to the evidence of the husband. He submitted that the husband was argumentative and evasive in the giving of his evidence and that he made up evidence on the run. It was submitted more specifically, that the husband’s failure to disclose evidence was a telling factor and that statements made by the husband in relation to proceedings generally and more particularly, in respect of the oral evidence that he gave, was given in a glib manner and was in no sense particularised.
Counsel for the husband on the other hand, indicated, I think quite properly, that there was unnecessary heat in the proceedings. What Counsel for the husband also submitted however, was that this should not affect the mathematical assessment to be taken in relation to the matter and that the proper course for the Court to follow was to stand back and to take, as Counsel described it “a broad brush approach”, in relation to the calculation, of what boiled down to a set of complicated transactions.
Insofar as the husband and the wife were concerned I should say at the beginning that I had concerns in relation to the evidence of both parties. The wife was obviously very angry with the husband. On more than one occasion during cross-examination she was asked about her feelings toward the husband and on one occasion, it was put to her in cross-examination that she bore the husband a great deal of animosity. She was honest in her response, in that she indicated that in fact that was the case and went on to explain, that she had had, as she described it, “a dreadful life with him”.
That anger and dislike was most particularly evidenced in the fact that a significant part of the affidavit evidence which was provided related to investigation of the husband by police officers, inquiring into child pornography. I do not intend to comment in relation to that particular aspect of the matter, especially as all of that evidence was removed as being wholly irrelevant to these proceedings, but it was suggested that it was included by the wife for the purposes of smearing the character of the husband and was of a scandalous nature. I would think that there could be no other explanation for the inclusion of such material in property proceedings and whilst it was suggested that it gave some indication of the life that the wife had lead and why she therefore thought that it was of such unhappy nature, it never the less showed the degree of animosity that she did have, toward the husband.
Notwithstanding that obvious animosity, I thought the wife generally a truthful witness. She was frank in her assertions and clear as to the basis upon which she said there should be a settlement in accordance with what she proposed, in relation to this matter. She was very precise in her evidence and in particular, clear as to monies bought into the country by her, what monies were utilised in what way and in particular, was honest and open about the joint course of conduct which was entered into in relation to the purchase of property and the intention of both the husband and the wife, as the wife described it in cross-examination, to become “investors”. The wife was not evasive at any time, even when questions in relation to her employment were put and I would find that she was an honest witness in that regard and generally a witness whose evidence could be relied upon.
Unfortunately no such reliance could be place upon the evidence of the husband. Throughout cross-examination the husband, in so many of his answers, was evasive and almost gave the impression of cockiness, particularly, answering what might be described as, the hard questions. This was particularly the case, in a number of instances, which included questions relating to financial contribution, by each party. The husband was adamant that the wife’s evidence in relation to her employment, as a pilate’s instructor, was a fabrication or charade. It was put to him however, that his contribution was also negligible, which he denied and then indicated that he had documents, which showed his financial contribution. No such documents were ever produced and the husband simply made bland statements as to evidence, without ever producing a skerrick of that evidence.
Similarly when questioned about the sale of the second Porsche motor vehicle, brought into the country by the wife, at the time of her move from the Untied Kingdom, the husband was simply non responsive, if not wholly untruthful. He was asked about the proceeds of sale when the vehicle was sold, whilst the wife was out of the country. He denied that he had retained all the proceeds of sale. Only when questioned closely on the point did he indicate that some monies had been utilised, he indicated about $8,000.00, for joint liabilities and the balance of about $10,000.00 went elsewhere. When asked why there was no documentation, he quite incredibly indicated that none had been asked for, though the evidence throughout and in fact the obligations, which existed at all times, were for the production of all relevant financial documentation.
More particularly when he was questioned about the whereabouts of the approximate sum of $10,000.00, which were unaccounted for, it was suggested that some of those monies, if not all, had gone to his solicitors. The evidence in fact was clear that that had been the case but he denied, that notwithstanding that his own evidence showed the denial to be untruthful. He then indicated that the wife had taken the sum of $950.00 for something, but was unable to explain what and yet was unable to at all properly explain what might have happened with regard to vast amounts of the monies that were in his control, but which were never explained.
On another occasion when being cross-examined in relation to joint furniture and items from the household, he was asked what had happened with the furniture. He indicated that it was in storage and subject to negotiations. When it was put to him that that was not really the case and that he had simply kept it all, he indicated that he had only kept all the jointly owned items and somehow seemed to suggest, that that was to ensure the protection of those items. He was then asked directly whether it was the case that he had simply kept anything purchased during co-habitation and he replied, in an argumentative and again cocky manner, that he had kept anything that the wife, was jointly liable for.
The husband was an unimpressive witness. He was clearly prepared to twist the truth and I gained the distinct impression that really his evidence was far more fabrication than fact and was in fact variable, dependant upon the pressure bought to bear.
The best indicator during cross-examination however, came when he was asked about payments made in relation to the four properties, purchased during the relationship. He indicated that payments were from the joint account but he also made a direct statement that he had paid, certain of the payments. Only when pressure was brought to bear and he was unable to provide any evidence what-so-ever in relation to his own financial contribution, did he clarify the statement in relation to payments made by him, by indicating that he did, the “physical act”.
The husband was simply unable or unwilling to give any sensible or what might be considered credible explanation, in relation to so many of the inconsistencies and inefficiencies, within his evidence. As I say I gained the distinct impression that very significantly the evidence that he gave was a fabrication, designed to bolster his own position in relation to this matter and to significantly, denigrate the wife and her very considerable contribution to the acquisition of assets. The husband clearly inflated the contribution made by him and the value of that contribution and whist I do not doubt that certain works were performed by him, he has sought through fabrication and falsehood to somehow equate minimal physical contributions with the enormous financial contribution, made by the wife.
As I said a little earlier, the wife was angry and that clearly influenced the way she gave her evidence and perhaps the demeanour indicated by her, but overall I found her an honest and forthright witness. The wife’s recollection of events and in particular, recollection of financial particulars was accurate. The husband’s evidence was not and in fact in so many instances was, I would find, unreliable to the extent that where there were divergence in the evidence given by the husband and given by the wife I would accept the evidence of wife, without hesitation.
The Law
Section 79 of the Family Law Act defines the court’s powers in determining applications for property settlement. Subsection (2) of section 79 provides that:
“The court shall not make an order under this section unless it is satisfied that in all the circumstances, it is just and equitable to make the order”.
Section 79(4) sets out the matters the court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters include:
(a)the financial and non-financial contributions made directly or indirectly by or on behalf of each party or by a child to the acquisition, conservation or improvement of any property of the parties;
(b)the contribution made by a party to the welfare of the family including any contribution made in the capacity of home maker or parent;
(c)the effect of any proposed order upon the earning capacity of either party;
(d)the matters referred to in subsection 75(2) as far as they are relevant;
(e)any other order made under the Family Law Act affecting a party to the marriage or a child of the marriage; and
(f)any child support payable.
The approach to the determination of an application under section 79 is well established by authority (see, for example Pastrikos and Pastrikos; In the Marriage of Lee Steere and Lee Steere; In the Marriage of Ferraro; In the Marriage of Clauson and Whitely and Whitely) the process ordinarily involves a multiple part procedure.
The court must first identify the assets, liabilities and financial resources of the parties and attribute a value to all assets, usually at the time of the hearing. Thereafter it must evaluate the contributions made by each of the parties as defined in section 79(4)(a) to (c). Finally, the court must consider the financial resources, means and needs of the parties, and other matters set out in section 75(2) in so far as they are relevant. An adjustment of the amount due to each party by way of contribution is then made by reference to the section 75(2) factors. It is not essential, however, that such an adjustment be made. Generally speaking, an adjustment is made because one party has greater needs and the other has stronger means. Section 75(2) is concerned with the process of arriving at a just and equitable result.
In determining what order the court should make under section 79, the court must be satisfied in all the circumstances of the case that order to be made is just and equitable – not simply that the underlying percentage division of the net value of the parties is appropriate. In other words, in consideration of whether the overall result of the order in the property settlement proceedings is just and equitable [see section 79(2)]. It is the justice and equity of the actual orders that the court must consider – Russell v Russell.
Section 75(2) of the Family Law Act sets out the matters which must be taken into account by the court when determining applications with respect to maintenance. This is the prospective element of the determination of the application for property settlement. The assessment of contributions during the marriage is the retrospective element.
In the Marriage of Ferraro (supra) the Full Court said:
“A now well established line of authority in this court indicates the approach normally to be taken in the exercise of the discretion in section 79 proceedings. That approach is firstly to ascertain the property of the parties at the time of the hearing, then to consider ‘contributions’ of the parties within paragraphs (a) – (c) of section 79(4) and then consider the matters in paragraphs (d) – (g), more especially paragraph (e) which takes up by reference the provisions of section 75(2) which are generally referred to as the ‘Section 75 Factors’”.
The court is therefore required to determine the following matters:
a)the assets, liabilities and financial resources of the parties to the marriage; and
b) the relevant contributions of each of the parties.
The approach to the determination of an application under section 79 is well established by authority In the Marriage of Lee Steere and Lee Steere (supra); In the Marriage of Ferraro (supra); In the Marriage of Clauson (supra). The process ordinarily involves a multiple part procedure. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined in section 79(4)(a) to (c) and the effect of any proposed order upon the earning capacity of either party. I must then evaluate the matters contained in section 75(2) insofar as they are relevant, any other order made under the Act affecting a party or child and any child support under the Child Support (Assessment) Act 1989 that a party to the marriage is to provide, or might be liable to provide in the future, for a child to the marriage.
In determining what order the court should make under section 79, the court must be satisfied in all the circumstances that it is just and equitable to do so [Section 79(2)]. It is the justice and equity of the actual orders that the court must consider. Russell v Russell.
It has been necessary to consider whether the court should approach the assessment of the parties’ entitlement using a global approach or the asset by asset approach. The global approach involves the division of the parties’ assets on an overall proportion of the global view of the assets - Tuck and Tuck. The asset by asset approach involves a determination of the parties’ interests in individual items of property - McMahon and McMahon. In Norbis v Norbis the High Court held that either approach is legitimate, and that in some cases either approach may be adopted in part or in whole. An examination of the reported case reveals that the global approach is the generally preferred approach and the approach most frequently applied - Zyk v Zyk. The rationale for its predominance is identified in the following passage taken from Norbis v Norbis (supra).
"Although it is natural to assess financial contributions under sec. 79(4)(a) by reference to individual assets, it is also natural to assess the contribution of a spouse as home maker and parent either by reference to the whole of the parties’ property or to some part of that property. For ease of comparison and calculation it will be convenient in assessing the overall contributions of the parties at some stage to place the two types of contribution on the same basis, i.e. on a global or, alternatively, on an “asset-by-asset” basis. Which of the two approaches is the more convenient will depend on the circumstances of the particular case. However, there is much to be said for the view that in most cases the global approach is the more convenient.” per Mason and Deane JJ
The asset by asset approach has been adopted in those matters where the marriage is of short duration and during which the parties have strictly divided and kept their own assets separate from each other - McMahon (supra). An apparent distinction, even when these two features apply is the importance of s.75(2) factors, including the presence or absence of children of the marriage. See Quinn and Kerr.
This issue arose again recently in Danielan v Danielian. There the marriage lasted two years. At the time of marriage the wife had a share portfolio and the husband had an investment apartment. The wife contributed $304,000 and the husband contributed $254,000 towards their home. As well as being responsible for her own mortgage the wife contributed a significant sum of money towards meeting the husband’s obligations under his loan for the purchase. She had also provided him with money prior to the marriage for various expenses. By the end of cohabitation the wife’s share portfolio had significantly depreciated, whilst the husband’s apartment had appreciated. Le Poer Trench J, assessed the parties contributions on a global basis, ordering that the home be transferred to the wife and that she take responsibility for the mortgage. As the home had increased in value by approximately $300,000 the wife was left with assets worth around $600,000. The husband appealed. Counsel for the husband contended that an asset by asset approach was the proper approach. It was submitted that justice would be best served by looking at the parties’ contributions to their joint ventures and that otherwise the profits and losses of their separate investments should lie where they fall. In contrast the wife’s counsel submitted that the court should adopt a global approach and that, the wife having contributed more to the marriage, should receive about 75% of the pool.
The Full Court stated that the distinguishing feature in this case was that the losses incurred by the wife happened entirely within the course of the marriage and there was no finding that she had deliberately contrived to dissipate or minimise her assets. Their Honours referred the decision of the Full Court in Brown v Green where it was noted that absent the application of waste principles it would be just and equitable to expect spouses to share the brunt of a loss that befell only one of them during a short marriage. Their Honours then cited the cases of Harris and Neneke and stated:
“…the task of the court in proceedings under s79 is not akin to an accounting exercise. The task is to examine the facts of each carefully to decide what is appropriate and just and equitable in the circumstances. There cannot be expected to be a universal answer to that question on any given set of facts. It is of the essence of judicial discretion that different minds may comfortably arrive at different conclusions. By and large marriage is a joint venture where parties can expect to buffer each other from the winds of misfortune that blow during the course of their relationship. The degree of the buffer may depend on how much individual sailing they do without consultation or indeed contrary wishes of the pother. But there can be no certain answer to how much that should be when applying s79 principles.” (at para 49)
The Full Court stated that in this case it was appropriate to make a preliminary assessment on an asset by asset basis, then make a global check to ensure any proposed distribution attributed appropriate weight to the various contributions.
A short marriage does not mandate the adoption of the “asset by asset” approach. This was shown in the case of Judkins and Santamari, which involved a marriage of almost 5 years. There were no children of the marriage; however, both parties had adult children from a previous marriage. The Federal Magistrate adopted an “asset by asset” approach and concluded that the contributions of the parties to the former matrimonial home were 90% in favour of the wife and 10% in favour of the husband. It was not considered appropriate to make any adjustment pursuant to section 75(2). He stated:
“This is a short marriage in which the parties have kept their finances separate. The husband has made minimal contributions to his and his daughters’ upkeep, although he has provided a clearly defined contribution to one asset of the parties by virtue of the renovations to the property. I am satisfied that it is therefore appropriate to adopt the asset by asset approach rather than a global approach.”
The decision was appealed on several grounds, one being that His Honour had erred in finding the marriage was of short duration. Counsel referred to Dickey A, Family Law (Lawbook Co 4th edition, 2002) at 712, and submitted:-
“The significance of a short marriage is that whilst every case depends on its own facts, ‘… the court always considers it appropriate to examine the respective contributions of both parties to a marriage more closely in the case of a comparatively short period of cohabitation than in the case of a longer period of cohabitation”.
The Full Court stated that the expression short marriage as used by the Federal Magistrate had no particular legal meaning and was merely used to describe the period for which the marriage lasted. However, they considered it had been open to describe the marriage as “short”. They considered that he had undertaken the required evaluation of the parties’ financial, non-financial, direct and indirect contributions and in their respective capacities as homemaker and parent. However, the appeal was upheld as the order made was seen as being outside what was outside a reasonable exercise of his discretion and was not just and equitable within the meaning of s.79(2). When re-exercising its discretion the Full Court adopted a “global” approach rather than an “asset by asset” approach.
In this matter I am satisfied that the court should adopt an asset by asset approach, given the nature of the parties’ contributions and the very short duration of the relationship
As I have indicated there appears to be agreement in relation to the value of the assets that remain. The can be summarised as follows:
Assets
Cornwall Street Unit $113,000.00
Home Magellan Road Springwood $290,000.00
Home Walbrook Avenue,Springwood $270,000.00
Home Barry Street, Slacks Creek $170,000.00
1988 Porsche 944 Turbo $ 17,000.00
Furniture $ 5,500.00
Superannuation $ 12,622.00
Money held in trust account of Simonidis
Shoebridge Lawyers $ 2,066.15
TOTAL $880,188.15
Liabilities
Mortgage-Cornwall Street Unit $ 45,000.00
Mortgage- home Magellan Road Springwood $147,000.00,
Joint mortgage- home Walbrook Avenue
Springwood and Barry Street, Slacks Creek $257,600.00
TOTAL $449,600.00
NET ASSET POOL $430,588.15
There are a number of unknowns or at least difficulties, which as best as possible, can and should be included in the calculations. There are claims in relation to personal loans at the Suncorp Metway Bank of $1,346.00 as at July 2004, Citi Bank credit card liability of $12,000.00, ANZ Bank credit card liability of $8,000.00 and Westpac credit card liability $7,100.00.
The evidence was that there had been increases in relation to those liabilities. The wife as adamant that that they were not liabilities that attached to her and as I have said I am far more inclined to accept the wife’s evidence in relation to such liabilities. In any event, if anything to a significant degree, they are matched by an amount of at least $8,000.00 which is unaccounted for in respect of the sale of the second Porsche motor vehicle.
The husband’s evidence in relation to same was that about $8,000.00 from the sale price of $18.900.00 had been utilised for joint liabilities. Only those monies that were passed into the trust account of the husband’s solicitors however, were accounted for and in light of the findings I have made with regard to each of the parties, I am far more inclined to think that the husband has not utilised those funds toward the joint liabilities of he and the wife, but toward his own benefit. It would seem that they should properly be considered as balancing each other out in relation to the various other loans and liabilities to which I have referred and accordingly I do not intend to include them nor would I think it is possible to properly include them in any calculations to be done in relation to this settlement.
I therefore find that the net asset pool of the parties is $430,588.15.
Contributions
I have already indicated that I am satisfied that in this matter the Court should adopt an asset by asset approach given the nature of the parties contributions and the very short duration of the relationship. As stated by Dickey A, in Family Law (Law Book Company 4th Edition, 2002), the significance of a short marriage is that whilst every case depends of its own facts, the Court will examine the respective contributions of each party more closely in a case, where there is a short period of co-habitation.
In this case co-habitation was between 16 and 18 months. It is therefore essential that each party place before the Court, cogent evidence as to, as far as possible supported by independent evidence, the contributions that they maintain, they made. This has to a very significant degree been done in these proceedings, though the evidence of financial contribution is almost entirely, weighted in favour of the wife. There is certainly some evidence of physical contribution by the husband and some suggestion certainly of payments made on the husband’s behalf, by his parents. What is also clear from the evidence however, is that the wife says that she repaid the bulk, if not all of those capital amounts, paid on behalf of the husband and where she did not make the payments, the monies from joint funds or from her own funds were provided to the husband, to be paid to the husband’s parents.
I accept that the wife did make the arrangements for the payment of monies direct or for the transfer of funds to the husband, for payments to be made to his parents and that there is no finding that could or should be made with regard to financial contribution by or on behalf of the husband.
In the circumstances I attend to address each of the specific items referred to in the asset pool.
Unit 6/367 Cornwall Street, Greenslopes
This property was owned by the husband prior to the relationship. Quite clearly it has increased in value as a result of the property boom which has occurred. It was prior owned, was rented and from the evidence, would appear to have been wholly self funded. The wife makes no claim in relation to contributions toward that property or in fact, work performed upon the property. It is an asset in respect of which the wife did not make any contribution and should, in my view, be wholly retained by the husband.
Magellan Road, Springwood, Walbrook Avenue, Springwood and Barry Street, Slacks Creek
These three properties along with the property at Marday Street which was purchased and sold during the relationship came as a direct result of the financial contributions of the wife. This includes her own monies as well as those monies provided to her by Mr Hart and by her mother. There is not a skerrick of evidence of financial contribution by the husband and whilst he indicated that he had employment, there was no evidence of income or how it might,if received, have been utilised.
There is certainly some suggestion of work performed by the husband and also by his extended family upon the properties. As was indicated by counsel for the wife, the husband’s schedules indicate a total contribution of 92.75 hours, which even at $50.00per hour, as suggested by the husband as a proper charge out rate, would mean a contribution of about $4,500.00. This fails to take into consideration any physical contribution by the wife, which may not have been as extensive as the husband, but certainly was of value and it fails to take into consideration the enormous contribution made directly of a financial nature, by the wife.
It was submitted on the part of the wife also, that consideration needed to be given to the fact that she has received monies from Mr Hart and from her mother, which were not the subject of interest. Suffice it to say, I am satisfied that contributions coming directly from the wife, by way of a financial contribution as well as non-financial contributions are at least equivalent to and probably out-weigh, the physical contributions by or on behalf of the husband.
I find that the husband has made no contribution in a real sense to the properties and to any increase in value, in relation to any of the three properties.
Furnishings
The parties say that these items were acquired during the relationship. There is obviously argument as to whether they were jointly acquired, particularly in light of the dispute between the parties, in relation to financial contributions during the marriage. In any event, those items which the husband values at approximately $5,500.00, have been overwhelmingly retained by the husband. He suggested that they were retained for some sort of protective measure and to prevent dissipation. The parties have, no doubt, in their own way contributed to the acquisition of those assets and I would think that they clearly should be considered a joint asset of the parties and an asset upon which each has equivalent interest and entitlement.
1988 Porsche 944 Turbo
This asset was clearly owned by the husband prior to marriage. What is also clear however, is that it is retained by him. There is no suggestion of any contribution by either party during the relationship and one can only assume that the vehicle was retained by the husband and utilised by him. Subsequent to the breakdown of the relationship it has continued to be in his possession and I would not find that there has been any contribution by the wife to the interest, in that asset.
Husband’s superannuation entitlements
The husband had his superannuation entitlements prior to the relationship and has retained them. There does not appear to have been any evidence what-so-ever, as to contributions made during the relationship and one can only assume that there were no contributions by either party and certainly none by the wife to the superannuation held by the husband. I find therefore, that the wife did not make any contribution to the husband’s superannuation during the relationship.
Monies held in trust account of Simonidis Shoebridge Lawyers
There remains in the trust account, $2,066.15. They are clearly joint funds in that they are the only monies that remain from the proceeds of sale of the second Porsche motor vehicle brought into the contry. The first Porsche motor vehicle was sold during the relationship and as I have indicated, monies were utilised from that sale, though it is not specifically clear as to the purpose for which they were used. In any event these funds are joint funds and whilst they flowed from the initial purchase of the Porsche motor vehicle by the wife, they have at least in part been utilised for joint purposes including payment of rates and the like and the balance that remains clearly, is of a joint nature.
Overall findings of contributions
Overall, given the findings that I have made in relation to this matter I am clearly satisfied that this is one of those applications where the Court should assess the parties contributions on an asset by asset basis, as I have done. The husband did not make contributions to the rental properties. The wife did not make contributions to the unit at Cornwall Street nor did she make contributions to the husband’s interest in the 1988 Porsche motor vehicle or to superannuation. The parties jointly contributed to the acquisition of furnishing items retained by the husband and the monies held in the account of Simonidis Shoebridge Lawyers.
Section 75(2) Factors.
There are few factors arising pursuant to the provisions of Section 75(2), which are relevant in relation to this relationship. There are no children of the relationship and the relationship was of such short duration that neither party’s capacity to earn, as they had previously done, had been effected. It is acknowledged and conceded that the wife now resides with another person to whom she is engaged to be married and that this, whilst not directly relevant in relation to any distribution, is a factor to be considered in respect of the financial circumstances of the wife now and into the future.
Neither party’s health has been effected as a result of the relationship and both of the parties are able to enter into remunerative employment. Neither parties earning capacity has been effected by the marriage, nor will their position be effected by Orders, made by this Court. No adjustment should be made in relation to any distribution between the parties.
As is perhaps clear from the reasons that I have given in relation to the matter, I am satisfied that on an asset by asset basis and taking into consideration contributions that each party made, that there should be Orders very much in accord with those sought by the wife. I intend to make Orders with regard to the transfer to the wife of the three properties jointly held by the parties and a declaration in relation to the wife having no interest in the property at Cornwall Street nor in the husband’s Porsche motor vehicle or superannuation entitlements.
As I have indicated, the husband made some contribution, of a physical nature in relation to the rental properties, but to a significant degree any contribution, which may out-weigh that of the wife, was balanced by the provision of non-interest bearing funds from Mr Hart and the wife’s mother. More particularly however, it is clear that the husband has retained furnishings and items of that nature, valued at least at an amount equivalent to what the husband seeks to claim, in relation to his input. He should retain those furnishings and items and similarly should retain wholly the interest in the monies held in the trust account of his solicitors.
I am required as a final step to be satisfied in all the circumstances that the Order’s that I intend to make, are just and equitable. I am aware of the calculations made and proposed on the part of the wife with regard to a cash payment to be made by the husband. To make any Order in relation to a cash payment, particularly one as significant as $30,000.00, which is sought by the wife, would leave the husband in a position of having a liability greater than that which he had had at the time of coming into the relationship. He retains, exclusive of furniture items, property which was held by him, prior to the relationship. That is just and equitable and in my view the appropriate course is to make no adjustment in relation to a cash payment, by the husband to the wife.
For the reasons I have set out here I make the Orders as detailed at the commencement of these reasons.
I certify that the preceding eighty-one (81) paragraphs are a true copy of the reasons for judgment of Coker FM
Associate: C Herbst
Date: 2 December 2004
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