HASKELL & NEWCOMBE

[2020] FCCA 1165

FEDERAL CIRCUIT COURT OF AUSTRALIA

HASKELL & NEWCOMBE [2020] FCCA 1165

Catchwords:
FAMILY LAW – Property – long relationship – treatment of inheritance which forms a vast majority of the pool.

Legislation:

Family Law Act 1975 (Cth), ss.75(2), 79, 79(2), 90SB(a), 90SD, 90SF, 90SF(3), 90SL, 90SM, 90SM(1), 90SM(3), 90SM(4), 106A
Family Law Rules 2004 (Cth), r.17.3

Cases cited:

Bevis & Bevis [2014] FamCAFC 147

Bonnici & Bonnici (1992) FLC 92-272

Dickons & Dickons (2012) 50 Fam LR 244

Farmer & Bramley [2000] FamCA 1615

G & G (1984) FLC 91-582

Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143

Horrigan & Horrigan [2020] FamCAFC 25

Hurst & Hurst [2018] FamCAFC 146

Jabour & Jabour [2019] FamCAFC 78

Pierce & Pierce (1999) FLC 92-844

Singerson & Joans [2014] FamCAFC 238

Stanford v Stanford (2012) 247 CLR 108

Watson & Ling (2013) 49 Fam LR 303

Applicant: MR HASKELL

Respondent: MS NEWCOMBE

File Number: MLC 12433 of 2018

Judgment of: Judge Harland

Hearing dates: 10 & 11 March 2020

Date of Last Submission: 11 March 2020

Delivered at: Melbourne

Delivered on: 14 May 2020

REPRESENTATION

Counsel for the Applicant: Mr Sweeney

Solicitors for the Applicant: Lander & Rogers

Counsel for the Respondent: Mr Arnold

Solicitors for the Respondent: Rochelle Belcher

ORDERS

1. That within 60 days the parties do all acts and things and sign all documents necessary to cause the following to occur simultaneously:

   (a)the respondent pay the applicant the sum of $702,226;

   (b)each party shall do all such things and execute all documents necessary to transfer the property situate at and known as A Street, Suburb B, in the State of Victoria being the whole of the land contained in folio identifier Volume … Folio … and Volume … Folio … ("the A Street, Suburb B property") to the sole name of the respondent at the cost of the respondent;

   (c)the applicant shall do all acts and things to cause the withdrawal of the caveat registered by him over the real property situate at and known as C Street, Suburb D, in the State of Victoria more particularly described in Certificate of Title Volume … Folio … ("the C Street, Suburb D property"); and

   (d)the applicant pay out the Westpac personal loan.

2. That in the event the respondent is in default of Order 1(a) she is to pay interest on the amount in Order 1(a) or such part thereof which remains due to be paid to the applicant at the rate prescribed by r.17.3 of the Family Law Rules 2004 (Cth), provided the applicant has complied with his obligations under Order 1(c).

3. That pursuant to s.90SL of the Family Law Act the applicant shall be and hereby is declared to be the sole and absolute owner at law and in equity of:

   (a)all items of furniture, furnishings, personalty, chattels and jewellery;

   (b)all monies (whether held in cash or in deposit with any financial institution);

   (c)the Motor Vehicle 1;

   (d)the Motor Vehicle 2;

   (e)all contributions to or benefits or entitlements arising from membership of any fund of insurance or superannuation whether such interest be present, contingent or expectant;

   in the possession, custody or control or in which he has an interest which are not otherwise dealt with in these Orders.

4. That pursuant to s.90SL of the Family Law Act the respondent shall be and hereby is declared to be the sole and absolute owner at law and in equity of:

   (a)all items of furniture, furnishings, personalty, chattels and jewellery;

   (b)all monies (whether held in cash or in deposit with any financial institution);

   (c)the C Street, Suburb D property;

   (d)the Motor Vehicle 3;

   (e)the Motor Vehicle 4;

   all contributions to or benefits or entitlements arising from membership of any fund of insurance or superannuation whether such interest be present, contingent or expectant in the possession, custody or control or in which she has an interest which are not otherwise dealt with in these Orders.

5. That the applicant indemnify and keep the respondent indemnified in relation to the Westpac credit card debt in the applicant's sole name.

6. That the parties indemnify and keep the other indemnified in relation to all other debts in their sole names.

7. That in the event that either party should fail, neglect or refuse to sign or execute any deed, document or instrument required by or to give effect to these Orders then pursuant to s.106A Family Law Act that the Registrar of the Federal Circuit Court of Australia, Melbourne Registry shall be and is hereby authorised, empowered and directed to sign and execute such deed, document or instrument in the place and instead of such party and to thereafter do all things and acts as are necessary to give validity and operation to same.

IT IS NOTED that publication of this judgment under the pseudonym Haskell & Newcombe is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 12433 of 2018

MR HASKELL

Applicant

And

MS NEWCOMBE

Respondent

REASONS FOR JUDGMENT

1. The preparation of this matter by both sides leaves much to be desired.  It is simply unacceptable for disclosure documents to be provided the morning of trial. Both parties did this.  Both complained about the other.  The respondent (“Ms Newcombe”) sought an adjournment because of it.  I refused that application.

2. The applicant (“Mr Haskell”) commenced the proceedings on 26 October 2018 seeking parenting and property orders.  The parties entered into final parenting orders on 8 February 2019. 

3. On 5 April 2019 I made orders listing the matter for a two day trial commencing on 10 March 2020.  That provided the parties with ample time to exchange all disclosure documents.  When each of the parties was asked about their failure to provide documents, they replied with the all too common refrain that they did not think they had been asked for those particular documents.  The obligation to provide full and frank disclosure is a positive ongoing obligation by both parties and is not reliant on the other party asking for particular documents.

4. Ms Newcombe did not rely on the affidavit of the parties’ adult daughter Ms E or the affidavit of Dr F.

5. Mr Haskell’s Counsel handed up a list of objections at the beginning of the trial. I was not required to make individual rulings. Much of Ms Newcombe’s affidavit filed on 11 February 2020 contained argument, opinion, submissions and conclusions. For example, Ms Newcombe alleges that Mr Haskell was abusive to her and the children but does not provide details. She also expresses opinions as to the reasons for Ms E and Ms G’s mental health issues and in Ms G’s case behavioural issues where, in essence, she blames Mr Haskell. Mr Haskell was not cross-examined about these allegations.

6. Ms Newcombe’s affidavit also purports to respond to Mr Haskell’s affidavit sworn on 25 October 2018. My trial directions clearly provide for parties to rely on one trial affidavit which is to be filed simultaneously. This direction is designed to avoid responsive affidavits. Of course the affidavit she is responding to is not in evidence before me. Her affidavit also attaches a Wikipedia page on Scheuermann's disease. This is not admissible evidence and has no place in an affidavit. It is curious that it is included at all given the fact that an affidavit was filed by her doctor. The annexures are not paginated.

7. Mr Haskell’s affidavit filed on 11 February 2020 also contains inadmissible material. For example, he says they could have earned approximately $40,000 in rent on the A Street, Suburb B property since separation and wants that taken into account. This is the type of evidence an expert must give.

Background

1. There are two children of the relationship, Ms E aged 22 and Ms G aged 16.  The girls are estranged from their father. The reasons for this are disputed but were not explored as the parenting matters were resolved with final consent orders being made on 8 February 2019.

2. The cross-examination of each of the parties was brief.  The parties were in a de facto relationship for either 23 or 25 years.  They disagree about the commencement of the relationship but nothing turns on this.

3. Mr Haskell worked throughout the relationship as a labourer. Ms Newcombe worked full time until shortly before Ms E was born and then returned to work part-time.  She has not worked in paid employment since shortly before Ms G was born.

Contributions

1. At the commencement of the relationship Ms Newcombe owned an unencumbered property at H Street, Suburb J (“the H Street, Suburb J property”). Mr Haskell had little assets. There is no evidence of the value of the H Street, Suburb J property as at the date of cohabitation.

2. The parties lived in the H Street, Suburb J property until Ms Newcombe sold it about 10 years ago for $370,000. Ms Newcombe says she used the proceeds of sale and sums she received by way of inheritance to purchase C Street, Suburb D, (“the C Street, Suburb D property”) for $620,000. The family lived in this home until separation. Ms Newcombe and Ms G remain living there. Ms Newcombe says she purchased the property in her sole name as she always considered it to be solely hers. She says she spent approximately $200,000 on improvements.

3. Ms Newcombe received the following inheritances during the relationship:

   a)$232,260 from her mother’s estate in 2002;

   b)$170,000 and $115,000 from her father’s estate in 2007;

   c)$1,800,000 and a 50% interest in A Street, Suburb B (“the A Street, Suburb B property”) from her aunt’s estate in 2017.

4. Mr Haskell received the other 50% interest in the A Street, Suburb B property from Ms Newcombe’s aunt.

5. In his affidavit Mr Haskell says he had a close relationship with Ms Newcombe’s aunt Ms K and her husband. He and Ms Newcombe hold the A Street, Suburb B property as tenants in common with equal shares.

6. Ms E received $25,000 from her maternal grandmother’s estate, which is held on trust until she turns 25. Currently the amount is approximately $40,000.  Ms G was not born at that time. Ms Newcombe’s father gifted Ms G approximately $37,000 which Ms Newcombe also holds on trust for her and it is intermingled in her account. Mr Haskell does not dispute this.

7. Mr Haskell says that initially they contributed equally to the household expenses but he soon took over the majority of the expenses and paid all the household expenses after Ms G was born.

8. He says that in 2001 they bought a block of land in Suburb L for $80,000. He does not say how it was funded. They sold it for $150,000 in 2003, making a profit after costs of $50,000 which was used to purchase a Motor Vehicle 5 that Ms Newcombe drives. Ms Newcombe makes no mention of the Suburb L land at all. Mr Haskell was not cross-examined about this. The purchase took place before Ms Newcombe received the first of her inheritances.

9. Mr Haskell says in early 2017 they renovated the A Street, Suburb B property. He does not provide any detail as to what they did and how the renovations were funded.

10. When the renovations were completed Ms E asked if she could move into the property. The parties agreed and in 2017 Ms E moved into the property with her friend Ms M. Mr Haskell says he and Ms Newcombe could not agree on the appropriate quantum of rent but says he acquiesced to Ms Newcombe’s suggestion that Ms E pay $160 a month and Ms M pay $345 a month. He says after the first month he did not receive any rent. He says Ms Newcombe assured him that she was collecting the rent.

11. Mr Haskell says that in 2018 when Ms E told him that a third person named Ms N was going to move into the A Street, Suburb B property he told her he did not agree. The parties’ relationship had broken down and he wanted to move into the A Street, Suburb B property.  He says that a short time later Ms Newcombe told him that she allowed Ms N to move in without any obligation to pay rent. 

12. The parties entered into consent orders on 8 February 2019 requiring the rent received from the A Street, Suburb B property to be deposited into the joint bank account. Unfortunately the orders did not specify who was responsible for the collection of rent. Ms Newcombe caused her lawyer to write to Mr Haskell’s lawyer saying she abrogated responsibility for collecting the rent. Ms Newcombe’s position is somewhat unreasonable in circumstances where she claims that Mr Haskell was abusive to her and the girls and as Ms E is living in the A Street, Suburb B property. In addition, up until the beginning of the trial she was relying on an affidavit sworn by Ms E. Having Ms E swear an affidavit in this dispute only drew her further into the conflict. This would not have in any way assisted Ms E with her mental health struggles which Ms Newcombe refers to.

13. It is also unreasonable for Ms Newcombe to complain about paying for expenses associated with the A Street, Suburb B property in circumstances where the parties could have charged rent to cover the expenses or Mr Haskell could have moved into the A Street, Suburb B property post separation and been responsible for those expenses and any upkeep on the property. Ms Newcombe has been able to continue to live in the home the parties cohabited, whilst Mr Haskell moved into his mother’s home as he says he could not afford to rent a place.

14. It is clear from the exchanges annexed to Mr Haskell’s affidavit that the parties were content to incur legal costs with respect to this issue rather than take a practical approach.

15. Mr Haskell says that in July 2019 he spoke to Ms E about his desire to move into the A Street, Suburb B property. He says that he assured Ms E at the time that he did not require her to move out but became upset with her attitude given that he had agreed to her renting the property and that she was over 18, earning an income and that she should be paying rent.  Things deteriorated from there with Mr Haskell purporting to give Ms E notice that she and her friends needed to vacate the home. Ms E responded, saying that she would call the police if Mr Haskell attended the home and that he needed to confirm with the other landlord and provide appropriate documentation.  He caused his lawyers to write to Ms Newcombe’s lawyers on 19 July 2019 saying he withdrew his consent to Ms E and her friends living in the property and that he intended to move in. He said he was content with Ms E remaining in the property.

16. In response Ms Newcombe’s lawyers wrote saying the issue of rent was Mr Haskell’s “personal issue”. In the same letter she stated that Mr Haskell has been told previously that he must take responsibility for collecting the rent whilst in the next paragraph reference is made to Ms E having serious mental health issues and that Ms Newcombe felt it part of her responsibility to allow Ms E to live in the property. It makes no sense to then put Ms E in the middle of this dispute. Ms Newcombe seeks to have things both ways. In a further letter dated 26 November 2019 her lawyer complains about various household bills for the A Street, Suburb B property being outstanding with insufficient money in the account because Mr Haskell had not collected rent. She also stated that her client would seek reimbursement at trial. Sensibly, this was not agitated at trial.

17. Ms Newcombe has enjoyed a stronger financial position since the parties separated. She seeks to quarantine it all on the basis of it being her inheritance. She presents her financial position as being modest yet in 2017 she purchased a Motor Vehicle 3 for $131,000. She also purchased a Motor Vehicle 4 in 2019 for $50,000. When cross-examined about the necessity of having both cars, she said she drives both regularly and that one is for her sanity. She says her therapist told her to do something that made her happy.

18. Ms Newcombe also spent about $270,000 in the past year. She says she paid for expenses for her daughters including a school trip to Country O and braces and various repairs for the properties. She has had the exclusive use of two unencumbered properties since separation. Whilst the A Street, Suburb B property is in the parties’ joint names, given the state of the parties’ respective relationships with Ms E, Ms Newcombe was in the position to collect rent, not Mr Haskell.

19. Ms Newcombe seeks to keep both properties, arguing that the A Street, Suburb B property has sentimental value to her. When it was put to her that she has the capacity to make a cash payment to Mr Haskell she replied that then she would not be able to support her children. She also claims that she spent 15 years asking him to leave and did not cohabit with him by choice. She did not file admissible evidence about this. The reality is that whether it was an unhappy relationship or not, she concedes that the parties were in a de facto relationship for 23 years. This is a long relationship.

The parties’ legal and equitable interests

1. The parties did not provide an explanation as to why current valuations and figures for their respective superannuation entitlements were not provided. Instead the parties relied on valuations of the real property conducted in February 2019 and superannuation figures from mid-2019. As I pointed out during the hearing, this does not enable the Court to determine the value of the parties’ existing legal and equitable interests as required by s.90SM of the Family Law Act 1975 (Cth) (“the Family Law Act”) which was explicitly referred to in Mr Haskell’s case outline.

2. The parties agreed that the asset pool is as follows:

Assets	ownership	$	Comments
C Street, Suburb D	Respondent	950,000	Valued March 2019
A Street, Suburb B	Joint	540,000	Valued  March 2019
Motor Vehicle 1	Applicant	E23,000	Appraised 2018
Motor Vehicle 2	Applicant	E12,400	Appraised late 2018
Motor Vehicle 3	Respondent	89,500
Motor Vehicle 4	Respondent	50,000	Ms Newcombe says it is now worth $37,500
Part property to applicant	Respondent	50,000
Cash in bank	Respondent	1,360,632	Remainder of the inheritance
Total Assets	3,075,532
Liabilities
Personal loan	Applicant	24,991	As at March 2020
Total Liabilities	24,991
Net assets	3,050,541
Superannuation
Super Fund P	Applicant	31,016	As at 30 June 2019
Super Fund Q	Respondent	11,245	As at 30 June 2019
Total Superannuation	42,261

1. Very late in closing submissions the issue of paid legal costs was raised. Mr Haskell’s Counsel said Mr Haskell used his $50,000 part property settlement to pay for legal costs whereas Ms Newcombe paid $16,000 in legal fees from joint funds.  Neither party has provided the court with statements of legal costs.  The costs they paid are not in evidence and there was no cross-examination about it. Nor was this addressed in the balance sheet tendered by the parties and marked exhibit 4.  Given these factors I cannot add back paid legal fees. Pursuant to the consent orders made on 8 February 2019 Ms Newcombe paid Mr Haskell $50,000 by way of partial property settlement. Both parties have included Mr Haskell’s part property payment in the balance sheet as an addback. There was no similar payment to Ms Newcombe. Of course she controls most of the assets and she has been able to spend significant sums post separation as she saw fit. Whilst Mr Haskell complained about Ms Newcombe spending some $270,000 and not providing an explanation for how much of it was spent, he did not seek that any part of this be notionally added back.

2. The balance sheet indicates the disputed items as being the Motor Vehicle 4 where Mr Haskell relies on the year of purchase price whereas Ms Newcombe says it is now worth 37,000.  Mr Haskell’s Counsel submits that it should be valued at the purchase price. Noting it was only purchased last year it will be included valued at $50,000.

1. The other disputed items are the personal loan in Mr Haskell’s name with a balance of $24,991 as at 4 March 2020 and the Westpac credit card in Mr Haskell’s name with a balance of $5,836 as at 4 March 2020. 

2. Mr Haskell says that the personal loan he has with a current balance of approximately $21,000 relates to a tax liability and credit card debt acquired during the relationship and should be included as a joint debt.  Ms Newcombe denies this although she conceded during cross-examination that she did use the joint credit card. She also accepted that the statement showed that as at 25 February 2018 the amount owing was $18,204.

3. The personal loan at its current balance should be included in the parties’ joint liability as both made concessions that there were joint expenses of approximately $18,000.  It is conceded that this was a Westpac credit card debt which is now represented by the personal loan with a lower interest rate. At least some of the increase would be as a result of interest charges. It is appropriate to include the personal loan as a joint debt at its current value. 

4. Mr Haskell says the Westpac credit card debt is for tax from his BAS. He does not say that this was incurred pre-separation. Ms Newcombe opposed this being included in the balance sheet on the basis of it not being a joint debt. I do not have any evidence that this relates to joint expenditure. I will not include it in the balance sheet.

5. Sensibly neither party seeks an adjustment of the superannuation interests which are modest. The balance sheet provided by Counsel deals with the parties’ superannuation separately and not as part of one pool. Whilst Mr Haskell has three times as much superannuation as Ms Newcombe, together the parties’ superannuation is less than 2% of the pool. As I was not asked to include the superannuation in one pool I will order that each party retain their superannuation interests. The net pool of realisable assets between the parties is $3,050,041.

Section 90SF factors

1. I will address the relevant s.90SF factors.

2. Ms Newcombe is nine years older than Mr Haskell. Mr Haskell is 45 years old.  Ms Newcombe is 54 years old.

3. The parties were in a long relationship.

4. Ms Newcombe has some health issues and has not worked in paid employment for 16 years.

5. One of the issues in dispute between the parties is Mr Haskell’s current earning capacity. Mr Haskell has not filed tax returns for the past two years. He works as a contractor for Employer R and has for many years. Mr Haskell blamed his failure to file tax returns partly on Employer R and partly on Ms Newcombe’s failure to give him information with respect to the rent and expenses for the A Street, Suburb B property.

6. Mr Haskell conceded that his taxable income was $79,896 for the year ending 30 June 2017. Mr Haskell claims that his current income is about $50,000 a year. He has had some time off work for a foot injury and also had a six week holiday in Country S. As he is a contractor he does not get sick leave and holiday pay. Mr Haskell claims in his affidavit that the work from Employer R has lessened in the past year as demand for labourers has dropped. He does not provide supporting evidence of this.  The evidence does not support a finding that his income has dropped to $50,000.

7. Ms Newcombe earns an income from her inherited funds. Ms Newcombe’s taxable income for the year ending 30 June 2019 is $38,763. She earns this income from interest from her term deposits. Mr Haskell’s income is approximately twice this amount. Whilst Ms Newcombe’s income from this source will reduce if she makes a cash payment to Mr Haskell, she will have the ability to earn rental income from the A Street, Suburb B property should she choose to do so.

8. Ms Newcombe also has the sole care of Ms G. Mr Haskell is paying child support but is not spending any time with her. As Ms G is 16 this does not justify a significant adjustment in her favour.

9. The parties’ superannuation entitlements are modest.

10. In her case outline Ms Newcombe claims that whilst she has not re-partnered, Mr Haskell has and she believes he is living with his partner. No evidence with respect to this assertion was proffered. Mr Haskell was not cross-examined about this.

11. The other significant factor is the parties’ respective financial resources. Ms Newcombe will be in a stronger financial position than Mr Haskell. She will have two unencumbered properties and cash.

12. As can be seen there are several factors that point to an adjustment in favour of Ms Newcombe but this needs to be balanced against the parties’ respective financial positions after these proceedings. Ms Newcombe has said that Mr Haskell will receive a significant inheritance in the future. This is speculative. There is no evidence before me that would enable me to take any prospective inheritance into account.

Legal principles with respect to property division

1. Section 90SB(a) of the Family Law Act is satisfied as the de facto relationship was longer than two years. Section 90SD being the geographical requirement is also satisfied.

2. Part VIIIA is the part of the Family Law Act dealing with property, spousal maintenance and maintenance agreement between de facto partners. The major provisions relating to de facto property division are contained in ss.90SM(1); 90SM(3), 90SM(4); and 90SF(3) of the Family Law Act.

3. Until the High Court decision in Stanford v Stanford (2012) 247 CLR 108, the position in respect of the process to be applied to the resolution of matrimonial property cases was said to be well settled with a preferred approach as set out by the Full Court in Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39].

4. The High Court considered the operation of s.79 of the Family Law Act (which has almost identical terms to s.90SM) in the matter of Stanford. In this case, the majority stated at [35]-[36] that:

   35. “It will be recalled that s 79(2) provides that "[t]he 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) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.”

   36. The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.” [Footnotes omitted]

5. The High Court found three fundamental propositions with respect to the application of s.79, which can be summarised as follows:

   1. Firstly, in order to ascertain whether it is just and equitable to make a property settlement order, it is necessary to identify the existing legal and equitable interests of the parties in the property. The High Court emphasised the word ‘existing’.

   2. Secondly, although s.79 gives the court a broad power to make property settlement orders it may not be exercised in an unprincipled fashion. There must be no assumption that the parties’ interests are or should be different to their existing interests.

   3. Thirdly, when considering whether making a property settlement order is just and equitable the court must not assume that one or the other party has the right to a property adjustment order. The court must give separate consideration to s.79(2) in addition to the matters referred to in s.79(4).

6. In Stanford the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of s.79(2) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation.

7. The High Court also pointed out that what is just and equitable is different in every case.

8. The principles referred to in Stanford v Stanford are equally applicable to de facto property matters.[1]

   [1] See Watson & Ling (2013) 49 Fam LR 303.

Submissions

1. In closing submissions Ms Newcombe’s Counsel conceded that based on the paucity of evidence before the Court the only finding the Court can make is that apart from Ms Newcombe’s initial contributions and her inheritances, the parties’ contributions during the relationship were equal.

2. Ms Newcombe’s Counsel submitted that Ms Newcombe made significant contributions post separation including care for the children. She also had access to two homes and significant financial resources. She was in a better position than Mr Haskell to collect rent from Ms E and her friends.

3. He further submitted that the Court should find that Mr Haskell’s earning capacity has not reduced significantly as he asserts but rather, Mr Haskell has limited his income post separation, reducing his child support whilst going on a six week overseas trip. The evidence with respect to his current earnings is unsatisfactory. The best evidence before the Court is his most recent tax return. The BAS statements tendered do not give a complete picture.

4. He also said that Ms Newcombe has greater s.90SF factors in her favour because she is nine years older, has care of the children and is solely reliant on her investment income. She has not been in paid employment since Ms G was born. The case outline submitted on her behalf claims that Ms E cannot live with her and Ms G because of Ms G’s behaviour and that Ms Newcombe wants Ms E to live independently but will need to assist her financially. There is no evidence to support this contention, nor is there any evidence that Ms G will need to be financially supported for years to come. She says she will not receive any further inheritances but believes Mr Haskell will “inherit well” from his mother and grandparents. This is speculative. There was no cross-examination on this point and there is nothing in evidence about this.

5. Her Counsel argued that there is no basis for making the adjustment of 40% to Mr Haskell that he seeks. This would recognise the difference in earning capacity and caring responsibility but ignores the significance of the inheritances Ms Newcombe received.

6. Mr Haskell’s Counsel submitted that whether the relationship was 25 years or 23 years is immaterial. In a relationship of that length the initial contribution loses its significance because of the other contributions and the need to assess contributions holistically.

7. He submitted that Ms Newcombe’s approach to the initial contribution invites the Court to do what Jabour & Jabour [2019] FamCAFC 78 and Pierce & Pierce (1999) FLC 92-844 says the Court should not do. Mr Haskell does not shy away from the significance of Ms Newcombe’s inheritance but points out that a 10% adjustment for a difference in earning capacity is $600,000. Of course Ms Newcombe also says there should be adjustment because of her care of the children. Ms E is an adult. Ms Newcombe does not have a legal obligation to financially support her. I have no doubt that like many parents of adult children she will continue to provide support. Ms G is 16. This factor does not justify a significant adjustment. Mr Haskell pays child support and does not spend time with Ms G.

8. Both Counsel referred to several authorities in support of their submissions including Bevis & Bevis [2014] FamCAFC 147; Singerson & Joans [2014] FamCAFC 238; Hurst & Hurst [2018] FamCAFC 146; Jabour & Jabour [2019] FamCAFC 78; and Horrigan & Horrigan [2020] FamCAFC 25.

9. In Bonnici & Bonnici (1992) FLC 92-272 the Full Court states “property does not fall into a protected category merely because it is an inheritance.”

10. Bevis & Bevis [2014] FamCAFC 147 and Singerson & Joans [2014] FamCAFC 238 both concerned inheritances received after separation.

11. In Singerson the husband’s father died around the time the parties separated and he inherited $3,000,000. The husband used some of those funds for his needs and expenses and otherwise relied on it for income.  In that case the wife earned approximately $250,000 a year after tax from her business.  The Full Court found that the trial judge had fallen into error by making the mistake Nygh J warned of in G & G (1984) FLC 91-582 of mistaking the trees for the forest, meaning failing to stand back and consider the overall outcome instead of taking the mathematical approach.

12. Several of the authorities the parties relied on refer to the reasoning of the Full Court in Dickons & Dickons (2012) 50 Fam LR 244. I set out paragraphs 17 to 21:

    Within that context, then, it is self-evident that financial contributions (whether direct or indirect) can be made to a relationship that have an effect on the property of the parties without those financial contributions finding their way directly into, or being directly linked to, specific property or, indeed, directly to the totality of the property available for distribution at the time of trial. Financial contributions can be made to the “…acquisition, conservation or improvement…” of property “…directly or indirectly…” (s 79(4)(a). …  A financial contribution can be made indirectly by, for example, the use by parties of income or assets for purpose A freeing up the use of other income or assets for purpose B.  Moreover, a particular financial contribution might have been used wholly in discretionary expenditure which, but for that contribution, would not have been available to the parties or would have required borrowings or a diminution of capital.  Such a contribution can also, in that way, be seen, for example, as an indirect contribution to the conservation of property.  Indeed, the principles discussed for example in In the Marriage of Kowaliw (1981) FLC 91-092 and In the Marriage of Townsend (1995) FLC 92-569, can be seen as an exception to that general proposition.

    Any and all such contributions, whether or not they sound in, or are directly linked to, the property available for distribution, should be considered and assessed together with the nature, form and extent of all other contributions of all types contemplated otherwise by s 79(4). 

    That is true of assets or income generated within the relationship and it is equally true of assets or income coming from outside of the relationship (for example, as here, in the form of inheritances). In the same way, s 79(4) specifically requires the Court to take into account contributions made to the welfare of the family (and substantively and “…not in any merely token way…”; see, Mallett v Mallett (1984) 156 CLR 605 at 636 per Wilson J) notwithstanding that those contributions may not be, or cannot be seen to be, directly linked to the available property at trial, or any increase or decrease in the value of the property. 

    Put another way, consistent with authority, the s 79 discretion involves as a necessary requirement that “… trial Judges weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such an assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment.” (In the Marriage of Aleksovski (1996) FLC 92-705 at 83,437).  In Aleksovski, Kay J outlined the well-known “gold bar” analogy and said “[w]hat is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship” (at 83,443). 

    Those same principles can be expressed as saying that the requirements of the section are met by approaching the assessment of contributions holistically and by analysing the nature, form, characteristics and origin of the property currently comprising that to which s 79 applies, and, in turn, analysing the nature, form and extent of the contributions (of all types) contemplated by s 79).  That task is also undertaken by reference to the nature and form of the particular marriage partnership manifested by the particular circumstances of this particular marriage.  Is it, for example, a relationship, as Deane J put it in Mallett at 640-641 “…where the parties have adopted the attitude that their marriage constituted a practical union of both lives and property…” or is it, for example, a union where parties lived very separate domestic and financial lives?  

13. In Singerson the Full Court also found that the trial judge erred by only assessing contributions to the inheritance post separation and not across the whole of the parties’ relationship.

14. In Bevis & Bevis [2014] FamCAFC 147 the parties were married for 29 years. The husband received an inheritance post separation and used it to buy a unit. The parties had negligible assets at separation. The equity in the unit was small, less than the inheritance received. The Full Court observed that the husband’s post separation contributions could be not treated in isolation from the myriad of contributions made during the 29 year relationship.

15. In the case before me the inheritances have been received at various times during the relationship.  The difficulty in this case arises because the inheritances form an overwhelming bulk of the pool. From Ms Newcombe’s perspective any significant adjustment to Mr Haskell will be unfair given her initial contributions and her inheritances, but her approach ignores the necessity of assessing the myriad of the parties’ different contributions over the whole of what was a long relationship.

16. In Hurst & Hurst [2018] FamCAFC 146 the parties were in a relationship for 39 years. The Full Court commented on there being a danger in that isolating indirect contributions to one part of the parties’ interests in the context of assessing contributions on a global basis risks ignoring significant contributions made by the parties which do not have any nexus to the property considered separately in isolation.

17. Mr Haskell’s Counsel also referred to the Full Court decision of Farmer & Bramley [2000] FamCA 1615. That case concerned a lottery win post separation. The parties did not have assets to divide at separation. There are some parallels with this case in that the parties in that case focused on the issue of the ownership of the lottery winnings rather than the parties’ contributions and s.75(2) factors. In this case the parties have focused on the treatment of Ms Newcombe’s inheritances which she received at different times during the relationship.

18. As several authorities make clear, the Court must assess the myriad of the parties’ contributions across the whole of the parties’ relationship. There does not need to be a causal connection between a party’s contribution and a particular asset. It is also important to assess contributions of the parties holistically over the whole of the relationship.

19. The parties both worked hard in their respective spheres.  Ms Newcombe was not willing to give Mr Haskell any credit and was obviously bitter towards him.

Conclusion

1. I am satisfied that considering the myriad of different types of contributions the parties have made throughout the whole of their relationship Mr Haskell’s contributions should be assessed as 25% and Ms Newcombe’s at 75%.

2. Mr Haskell has already received $50,000 by way of partial property settlement. He will keep the Motor Vehicle 1 and Motor Vehicle 2 in his possession and will transfer his share of the A Street, Suburb B property to Ms Newcombe. He will also have the responsibility for paying out the personal loan. Ms Newcombe will need to make a cash payment to Mr Haskell of $702,226.

3. Standing back and looking at the impact of this division I am satisfied that there should be no s.90SF adjustment in Ms Newcombe’s favour. Mr Haskell earns significantly more than Ms Newcombe and she will retain two unencumbered properties and a significant amount of cash.

4. Ms Newcombe seeks to keep both the home she lives in with Ms G and the A Street, Suburb B property which she wants to keep as it came from her family. Ms E is living there currently. This is an attractive solution as it does not require Ms E to move out of the property and avoids any argument about the state of the A Street, Suburb B property. This was flagged as a potential source of contention given order 6 of the orders sought in Mr Haskell’s case outline. Whilst her cash resources will be reduced she will have the ability to rent out the A Street, Suburb B property to supplement her income. If she chooses not to, that is a matter for her but she is not entitled to a greater adjustment because of those choices.  As Ms Newcombe has sufficient capital to make the cash payment to Mr Haskell it is not necessary to include a default clause selling the property. It is sufficient to include an interest clause in the event Ms Newcombe does not comply with the orders within the time frame. Simultaneously with the cash payment to the Mr Haskell, Mr Haskell will need to transfer his interest in the A Street, Suburb B property to Ms Newcombe and remove the caveat over the C Street, Suburb D property. He will also need to pay out the personal loan.

1. I am satisfied that this outcome is just and equitable.

I certify that the preceding eighty-two (82) paragraphs are a true copy of the reasons for judgment of Judge Harland

Associate:

Date: 14 May 2020