Healy and Healy - [2009] FMCAfam 351

FEDERAL MAGISTRATES COURT OF AUSTRALIA

HEALY & HEALY

[2009] FMCAfam 351

FAMILY LAW – Property dispute – death of one party to the proceedings following institution – appointment of legal personal representative as a party to the proceedings – consideration of the requirements of s.79(8)(b) in conjunction with the facts of the case – determination as to the exercise of discretion – consideration of the influence of a recently expressed wish of the deceased – determination that in the circumstances it was appropriate to make an order with respect to property – consideration of s.79(2)-(4) factors and assessment of just and equitable distribution of property – consideration of s.79(c) and relevant factors leading to the making of an order for the settlement of property upon trust for the child of the marriage.

Family Law Act 1975 (Cth), ss.79(8)(a)-(c), 75(2), 79(2)-(4), 79(1)(d)

Fisher v Fisher (No.2) (1986) FLC 91-767
Menzies & Evans & Evans (1988) FLC 91-969
Re Berry (through the executor of his estate) & Berry (1990) FLC 92-118
Mason v Hannaford; Mason-King (Intervener) (1993) FLC 92-398
Whitely and Whitely (1996) 92-684
In the Marriage of Clauson (1995) FLC 92-595
In the Marriage of Ferraro (1993) FLC 92-335
Pastrikos and Pastrikos (1980) FLC 91-987
In the Marriage of Lee Steere and Lee Steere (1985) FLC 91-626
Russell and Russell (1999) FLC 92-877

Applicant:

MR HEALY

Respondent:

MS HEALY (DECEASED) (through her legal personal representative
MR WAKEFIELD)

File Number:

BRC 2674 of 2008

Judgment of:

Coker FM

Hearing date:

11 February 2009

Date of Last Submission:

11 February 2009

Delivered at:

Cairns

Delivered on:

21 April 2009

REPRESENTATION

Solicitors for the Applicant:

Self Represented

Counsel for the Respondent:

Mr Foley

Solicitors for the Respondent:

North Coast Law

ORDERS

That by way of property settlement:

The husband forthwith effect a transfer of 40 percent of his interest in the property situate at Property D, in the State of Queensland, to himself, as trustee for the child, [X] born in 2002.
The husband be responsible for the payment of all rates, insurances, utilities and other expenses associated with the day-to-day maintenance of the property situate at Property D, in the State of Queensland.
The legal personal representative be responsible for the preparation of the necessary transfer documentation to effect the transfer pursuant to order 1 herein and that the legal personal representative be responsible for all costs associated with effecting the transfer, including any legal costs relating to the preparation of the necessary transfer documents.
Each party otherwise retain for their own property absolutely, all of their right, title and interest in and to any property, chattels, money, bank accounts, superannuation entitlements, insurance entitlements and choses in action, as may be held by them as at the date of this order.
In the event of the husband failing to execute any documentation necessary to effect the transfer pursuant to order 1 herein, then and in that event the Registry Manager of the Family Law Courts, Brisbane is empowered to sign such documentation so as to effect the transfer, provided however that the Registry Manager is satisfied that the husband has failed for a period in excess of 7 days from signing such documentation as may be provided to him.
Each party have liberty to apply within 28 days of the date of this order in relation to any point of clarification in relation to the orders and in respect of costs.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
TOWNSVILLE

BRC 2674 of 2008

MR HEALY

Applicant

And

MS HEALY (DECEASED)
(through her legal personal representative MR WAKEFIELD)

Respondent

REASONS FOR JUDGMENT

I should say at the outset, that this is truly one of the saddest cases that one could imagine having to be dealt with by this, or any other Court, dealing with proceedings in respect of a marriage. The reason I say that is that the situation is one where a little boy has been left in a position where he is without his mother and there is continued dispute between his father and the estate of his mother.
Proceedings were originally commenced in this Court by Mr Healy whom I shall refer to as the father. His application was filed on 26 March 2008 only a matter of a few days after separation had occurred between he and the respondent mother, Ms Healy. The circumstances that led to the separation were tragic. The mother and the father had been involved in a serious motor vehicle accident approximately one and a half to two years before the separation.
As a result of that motor vehicle accident, the father suffered injuries but the mother suffered far more serious injuries resulting in her being confined thereafter to a wheelchair. The mother clearly experienced, not only serious and severe physical injury as a result of the accident, but tragically also was experiencing serious psychological difficulties. Evidence was given that the mother had, on a number of occasions following her release from hospital, attempted to take her own life.
The father deposes in material to the fact that he had, whilst they were still living together, found the mother in a creek at the back of their property, where she had apparently wheeled her wheelchair and had sought to drown herself in the creek. She was experiencing enormous difficulties.
One can only begin to imagine the difficulties that both the mother and the father were experiencing with regard to their own injuries, to the breakdown in their relationship, and to the enormous difficulties that were occurring, as a result of the breakdown of the relationship and the difficulties associated with the physical harm, as well as emotional harm that had arisen from the motor vehicle accident. Tragically, the mother was unable to deal with the circumstances and on 23 June 2008, the mother took her own life.
Subsequently, arrangements were put in place for the child of the relationship, [X], born in 2002, to live with the father. Following separation which had occurred in February 2008, [X] had remained primarily in the care of the mother, though had obviously been spending significant and substantial time with the father. The parties had been able to work out between themselves an arrangement which provided for [X]'s care.
There were mutual undertakings given by the mother and the father in relation to what arrangements were to be put in place and orders were made on 19 May 2008 which put in to perspective the two week cycle which was to occur, with regard to [X]'s care. Of course, with the mother's death only a matter of some five or six weeks later, circumstances changed radically.
The proceedings, however, remained on foot. I am mindful, of course, of the provisions of the Act in relation to what occurs following the death of a party to proceedings in relation to property that have not been completed. In that respect specifically s.79(8) of the Family Law Act is relevant. It is in these terms:
Section 79(8)
Where, before property settlement proceedings are completed, a party to the marriage dies:
(a)the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings;
(b)if the Court is of the opinion:
(i)that it would have made an order with respect to property if the deceased party had not died; and
(ii) that it is still appropriate to make an order with respect to property;
the Court may make such order as it considers appropriate with respect to:
(iii)any of the property of the parties to the marriage or either of them; or
(iv)any of the vested bankruptcy property in relation to a bankrupt party to the marriage; and
(c)an order made by the Court pursuant to paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
It is obvious, therefore, that there are a number of considerations which must be looked at in relation to the continuation of property proceedings.
The first matter is a consideration of what is required pursuant to the provisions of sub-section (a) of s.79(8). The legal personal representative of the deceased party may be made a party to the proceedings, subject of course, to an order of the Court. That has occurred and as a result of the order of Jarrett FM of 11 November 2008, Mr Wakefield, as executor of the Estate of the late Ms Healy has been substituted as a party for the respondent in the proceedings.
Mr Wakefield has filed a number of affidavits in relation to this matter. He has, of course, experienced understandable difficulties in relation to the position with regard to the matter. For example, Mr Wakefield is, in fact, a resident of Western Australia. As a result of the appointment in relation to this matter, he has attempted, as best he can, to put forward a position in respect of the matter which relates to the opportunity for there to be appropriate consideration of the position of the former wife, in relation to the proceedings.
In order to attempt to put those factors before the Court, the legal personal representative filed an affidavit on 18 December 2008 in which he details the contents of an affidavit that had previously been prepared by his sister, but which had never been executed or filed.

It details in paragraphs 9 through 25 particulars in relation to property issues.
Unfortunately, the legal personal representative has little, if any, personal knowledge whatsoever of the situation with regard to the matrimonial affairs and, of course, the contributions both financial and non financial that were made by the parties, during their relationship.
It is one of the obvious difficulties that arises in relation to these proceedings. In fact, during the conduct and course of the proceedings, the legal personal representative was asked why he continued the proceedings in relation to this matter on behalf of his deceased sister. His answer was, I thought, rather telling. He confirmed that he did so firstly because it was his sister's wish that her estate should primarily be bequeathed to her son, [X], but also because of the very clear indication within the will that the mother did not wish the father to receive any benefit under the provisions of her will.
Annexed to the affidavit of Mr Wakefield, the legal personal representative, on 29 September 2008 is a copy of the last will and testament of Ms Healy. It includes the following provision:
I request that Mr Healy receive nothing and take nothing from the house at Property D.
I am not sure whether it is, in fact, a determination or definite intention on the part of the mother in the preparation of the will or simply is a matter that has interestingly arisen from the copying of the will, but the word "nothing" when repeated in that particular clause is highlighted. It is in thicker and darker print. Very clearly the relationship between the wife and the husband in relation to these proceedings, have been extremely strained. It is clear that the intention of the deceased was for there to be no entitlement or benefit whatsoever received by the husband, in these proceedings.
As an indicator then, of the wishes of the wife, and in respect of those wishes Mr Wakefield, as the legal personal representative, takes a very firm stand in relation to what is sought in respect of the matter. His response was filed on 18 December 2008. It sought an order in very simple terms. The order that was sought on behalf of the estate was as follows:
That the applicant husband pay to the estate of the respondent wife, the sum of $255,000.
The orders that were sought by the husband in relation to this matter as detailed in his original application were as follows:
(11)That the husband, within thirty days of the date of receipt of these Orders duly sealed from this Honourable Court, transfer all his right, title and interest in and to the former matrimonial home situated at Property D to the wife for her sole use and benefit absolutely in consideration for which the wife pay to the husband the sum of $202,500.
(12)That in the event the wife does not pay the said sum of $202,500 to the husband as aforesaid, the former matrimonial home be forthwith listed for sale with at least three reputable real Estate Agents in the area at current market value as agreed between the parties and failing agreement as determined by an independent Registered Value nominated by the Chief Executive Officer of the Real Estate Institute of Queensland at the request of either party but at the joint expense of both parties.
(13)That at settlement of the sale of the former matrimonial home there be paid all Real Estate Agent’s commission, release fees, all monies due and owing to Suncorp, rates adjustment, all monies due and owing to the Paternal Grandparents, any other adjustment upon sale with the balance hereinafter referred to as “nett proceeds of sale”.
(14)That at settlement of the sale of the former matrimonial home the wife be paid a sum to be ascertained which is equivalent to 50% of the nett proceeds of sale with the balance to the husband.
(15)That the wife retain for her sole use and benefit absolutely save for those paintings and tools hereinafter referred to, the furniture and chattels in the former matrimonial home, her motor vehicle, her savings and her Superannuation entitlements.
(16)That the wife forthwith make available for collection by the husband and within thirty days of the date of making of these Orders at a time and date to be confirmed in writing between the parties’ respective Solicitors, the abstract paintings purchased by the husband in Bali and all his tools.
(17)That the husband retain for his sole use and benefit absolutely his Superannuation entitlements and his motor vehicle.
(18)That not less than ten Business days prior to the settlement of the sale of the former matrimonial home the husband and wife attend upon the relevant Branch of the Mortgagee to sign all necessary documents to release the indebtedness thereover in readiness for settlement.
(19)That unless otherwise specified in these Orders, each party be solely entitled to the exclusion of the other, to all other property and resources in the possession of such party, including any liabilities attached thereto, as at the date hereof and indemnifies the other party against any responsibility therefore.
(20)That for the purposes of effecting these Orders, each party sign as required all necessary documents and, in particular:-
a. Sale Authority/ies;
b. Contracts of Sale;
c. Release Authority/s to any mortgagee;
d. Transfer documents;
e. Settlement Authority/ies;
f. Any other associated document pertaining to the sale/transfer of real property.
(21)That in the event that either party refuses or neglects to sign (within forty-eight (48) hours of a written request to do so) any documents or do any act necessary to effect the terms of these Orders, the Registrar of this Honourable Court is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act, to execute such documents on behalf of the defaulting party and the party in default is Ordered to pay all reasonable Solicitor/own client costs incurred by the non-defaulting party.
(22)That either party have liberty to apply for matters relating to enforcement or interpretation of this Order upon giving SEVEN (7) days notice in writing to the other.
At that time, the husband was legally represented. Subsequently he has not been represented in relation to proceedings and details now in the orders that he seeks in relation to the matter, more specific information with regard as to what is proposed with respect to the settlement to be effected between he and the estate of the wife. Orders now detailed are in these terms:
1.Ownership of the property at Property D, remain the property of the applicant, Mr Healy.
2.All moneys held by the respondent Mr Wakefield be paid over to the applicant except for the funds required to wind up the testamentary estate of Ms Healy.
In other words, the husband's position in relation to the matter has changed rather radically from that which was existing at the time that the proceedings were originally commenced. Obviously, the death of the wife has been one of those significant factors but, interestingly and significantly in relation to this matter, one of the other factors which no doubt has played upon the husband's mind in relation to any proposals with regard to settlement, is the fact that following the death of the wife, the property situate at Property D, has been transferred in its entirety into the name of the husband.
It has passed pursuant to the fact that the property was held as joint tenants. Again, interestingly, it had been the intention of the wife to suspend that situation and I am advised that, in fact, an attempt was made to sever the joint tenancy and to have the property held as tenants in common in equal shares, however, that did not occur. I am advised that there was some flaw in the application in respect of such an arrangement and, of course, subsequently the wife died and therefore there was no capacity for the change to be effected.
In any event, the situation is now one where the property that was jointly owned has now passed entirely into the possession of the husband. The estate, through the legal personal representative, seeks the recovery of some proportion in relation to the value of the property and seeks an order for the payment of certain moneys or alternatively for a transfer into the name of the legal personal representative of a proportion of the property, to be then held in trust for the child.
It is a matter that has given rise to significant difficulty in relation to my determination of this matter. The difficulty is because of the provisions of sub-section (b) of s.79(8). In particular, as is detailed earlier, s.79(8)(b) requires that the Court must take a preliminary step in relation to any determination that might be made, in relation to the proceedings. In particular, the Court is required to determine whether it would have made an order with respect to property if the deceased party had not died.
Quite clearly, there was an entitlement in relation to such a proceeding and, if nothing else, it is acknowledged on the part of the husband that the wife had a very clear entitlement, even if it were not necessarily the most accurate of assessments of what the entitlement might be. The husband in the application filed on 26 March 2008, suggested that the wife may wish to retain the property at Property D, in return for a payment to him of a sum of $202,500.
Alternatively, the husband proposed that if that did not occur, then that the property should be sold and, after the payment of all of the expenses associated with the sale of the property, that the equity which might be received following sale, was to be distributed 50 per cent to the wife and 50 per cent to him.
In other words, there was clearly an acknowledgement that there was an entitlement in relation to property and I have no hesitation, obviously, in finding that if the matter had proceeded with the wife still alive, that the Court would have made an order in respect of property.
The second matter that arises, however, pursuant to s.79(8)(b) and which is required to be considered, is whether in fact it is still appropriate to make an order with respect to property. The reason that that is a significant and difficult issue, that arises in relation to this matter is obvious, when one considers the circumstances that now exist.

Prior to the wife's death, [X] had been spending significant and substantial time in the household of both the wife and the husband. Subsequent to her death, the child, understandably, has been in the care of the husband. As a result of the responsibility that he took on in that regard, his circumstances have changed radically. He now is not in employment but in receipt of Commonwealth benefits to assist him, in relation to providing for the day-to-day care of the child.
The husband now lives back in the house at Property D. Previously he had lived elsewhere and, in fact, as is indicated by the orders that were sought in the original application, it was proposed that, if possible, the wife retain that property, but if not possible, that it should be sold and the proceeds divided. In other words, there was no proposal on the part of the husband that the home should be retained by him.
But as circumstances have changed, so has the position in relation to the matter. The husband has returned to the home with the child. It is, to all intents and purposes, the only real home that is known to the child. The difficulty that arises is further compounded by the fact that the property was previously owned as a joint tenancy between the husband and the wife, but is now held solely by the husband.
The husband says that as a result of the transfer to him and the change in circumstances, he is basically able to continue in occupation of the home with a very small mortgage, if any, attaching to the property and on the limited resources now available to him, through receipt of Commonwealth benefits, is able to ensure that there is continuity provided for the child and that there is a roof over their head.
In other words, the father says that his circumstances are changed, in some respects for the better, in that there is an unencumbered home available for the accommodation of he and [X], but in other respects has changed for the worst, in that his day-to-day financial circumstances have deteriorated considerably from those which existed, prior to the wife's death.
The difficulty that arises is, of course, the requirement that the Court must make a determination before proceeding toward a property settlement that it is still appropriate to make and order the property settlement. What needs to be considered therefore is what the changes have been since the death of the wife and whether they have then led to a situation, which means that the proceedings should not be able to continue, in their present form.
What needs to be considered in that regard, therefore, are the various factors as they exist and the consequences of any orders that might be made.
As I have indicated, the position taken by the legal personal representative is that there should be some re-organisation of the financial circumstances between the husband and the estate. As originally indicated in the response and the orders sought by the legal personal representative, it was for there to be a payment by the husband to the legal personal representative on behalf of the estate, of certain moneys. It was acknowledged however, that that may be an impossibility in the current financial circumstances that the husband finds himself in and, if there were no alternative available, then that the property would have to be sold.
It was clearly a situation which would be of some detriment to this child in particular, because there had been such radical changes already in relation to the child's life, and understandably, and quite compassionately, the legal personal representative has indicated that they would not necessarily seek to put the child through that.
As a result of that position, the legal personal representative gave evidence before the Court that he would be agreeable to a portion of the interest in the property at Property D being transferred to him as trustee to hold the property, on behalf of the child, until such time as [X] attains his majority.
That proposal was, of course, upon pre-condition that whilst the husband would have the right of occupation, along with the child, he would be responsible for the outgoings associated with that continued occupation, including the payment of utilities and rates, the payment of insurance sufficient to secure the property, and the payment of any other expenses that might accrue in relation to the continued occupation of the home. The husband, for his part, had agreed that he would be responsible for those outgoings, if so ordered.
He indicated however, that he was not agreeable to such an arrangement being put in place, because of the obvious difficulties that would arise in respect of the interaction that might subsequently be needed between he and the legal personal representative.
Obviously, the husband was averting to situations, for example, where the property needed to be sold or moneys expended in relation to it, over and above those general maintenance or continuing expenses, associated with the occupation of the home. The husband, however, when questioned in relation to that particular aspect of the matter indicated that if the Court ordered that part of the title was to be held by the legal personal representative for [X], he would obviously have to agree, if ordered to do so, though it would not necessarily be willing agreement, on his part.
It was a difficult concession for the husband to make. Obviously, the circumstances that existed prior to separation and certainly prior to the wife's death, and subsequent to the wife's death, have led to a developing degree of animosity between the husband and the family of the wife.
In particular, there is an indicator of that as a factor in relation to this matter, when the husband seeks orders, as he does in the amended application which was not previously filed, that the moneys held by the legal personal representative be paid to the husband, apart from those funds which might be required to wind up the testamentary estate of the wife. The reason for the order in those terms being sought by the husband is clear, when further consideration is given to the terms of the will, which was prepared the wife.
It included a clause in these terms:
My mother is to have all my savings. I request that from my savings my mother give Ms C and Ms W $1000 each for the care and love they showed me and [X]. My funeral is to be paid for from my savings.
It is unknown what might have been the position in relation to the savings at various times, but at the time of the wife's death, the moneys that were held in her savings account, as a result of the personal injuries action that had been brought and which had been utilised toward payment out of the debt on the home at Property D, meant that in the wife's Commonwealth Bank account, a sum in excess of $85,000 was held, at the time of her death.
Pursuant to the terms of the wife’s will, those moneys would be passing, not to the child, but to her mother. The difficulty, obviously, that arises there is that the husband, perhaps understandably, is concerned that the child was not to benefit from receipt of those moneys. He, in fact, commenced a line of questioning directed towards the legal personal representative in relation to whether the maternal grandmother had given any indication as to whether moneys received by her would be gifted back to the child.
Objection was taken in relation to that particular course of questioning and I ruled that it was unnecessary to consider that particular aspect of the evidence because of relevance. In that regard, I noted that the Court is not to take into consideration such matters being mindful of the decision of the High Court in Fisher v Fisher (No.2) (1986) FLC 91-767. In that regard, as is indicated by recent writings, even though the benefit of an order will be enjoyed by the beneficiaries of estate, who might include non family members, it is clear that orders may be made in favour of a deceased spouse.
In other words, the maternal grandmother was able to receive the benefit in relation to this matter, and it is irrelevant that it might have meant that the entitlement would be removed from a benefit otherwise to be received, in this instance, by the child.
Just as that might not be relevant in respect of my determination in relation to this matter, it is clearly a matter that plays upon the mind of the husband and, whilst he would obviously seek to have the opportunity to have such funds available to him, for the benefit of the child, it must be somewhat galling for the husband to see those moneys being utilised for purposes, other than those which he might genuinely consider to be most appropriate and most properly utilised, when one considers that the funds came from the wife's estate.
The matter that troubles me most in relation to this matter, and which leads to the very difficult circumstance of the determination is whether it is appropriate to make an order with respect of property, in light of the change in circumstances. Quite clearly here, the only way that a payment could be made to the estate of the wife, is if the home at Property D were to be sold. There are no ifs, buts or maybes in relation to that.
If the only feasible arrangement is for moneys to be paid, then of course the home in which the husband, but more particularly, the child, are now residing would have to be disposed of. That would mean further upheaval for the child. It would mean a situation arose where the limited stability remaining from this tragic situation was removed from the child.
The alternative that is proposed by the legal personal representative is for the severing of some proportion of the husband's interest now held entirely in the property at Property D and for that proportion to be passed to him as trustee and held as trustee for the child, until some time in the future. The difficulty there is obvious also. There is a continued situation which leads to concerns in respect of continued interaction between the husband and the estate of the deceased wife.
Whilst it might be, for example, that there would be little difficulty if the husband remained in occupation of the property, there would be far more considerable difficulties that would arise if, in changes of circumstances that would arise over the next 10 or more years, there may be a situation where the husband would seek to sell the property or to, as I have indicated, make significant or substantial changes to the property, which would involve expenditure over and above the normal maintenance and payment of utilities, associated with remaining in the home.
It is, I would think, a recipe for disaster and is not a suitable alternative in relation to proceedings. It was not suggested to me that there was another alternative in relation to this matter but, of course, notwithstanding the fact that it was not suggested, does not alter what might be an appropriate course to follow, if it were determined that that should occur.
The other alternative that was not canvassed, relates to a direction being made that the husband transfer a certain proportion of the interest, currently held by him in the property to himself, as trustee for the child. It would have a number of benefits if that were to occur.
Firstly, it would mean that the husband would continue to have the responsibility in relation to the property, though he would hold it in two different ways. Firstly, as his own property absolutely and secondly, as trustee for the child, in a certain proportion.
It would provide security for the child in that, whether the husband decided to sell the property, it would still mean that there was a fundamental entitlement held on behalf of the child in relation to the property, and upon attaining his majority, it would be a situation where he would be able to retain that interest, so as to have the benefit of the bequest from his mother's estate available to him.
Additionally, it would provide certainty in relation to continued occupation of the home. It would provide stability and it would provide a situation where, at least to some extent, one would think that whilst the legal personal representative did not continue to be involved, there was the certainty and security of knowing that the wife's intention in relation to a bequest being made to her son, was continued and preserved.
I must say, that having considered the various other alternatives, including the payment of moneys or the allocation of a certain proportion of the property on trust held by the legal personal representative for the child, these are matters that trouble me. The other alternative that is considered in relation to this matter is, in my view, the most appropriate.
That however, does not solve the problem that exists, in relation to a determination of whether it is appropriate to make an order with respect to property.
Quite clearly, the wife had an entitlement in relation to a property settlement. That was acknowledged, as I say, by the husband in the terms of the orders that were originally sought in the application. With the change of circumstance, a real concern then arises in respect of whether it would still be appropriate for an order to be made, in respect of property.
I have attempted to weigh the varying considerations in relation to this matter and have come to the decision, that in the end, it is appropriate that there should be an order made with respect to the property of the parties, notwithstanding the difficulties that have arisen. The reason, particularly in relation to that determination, relates to the fact that, if there had been a resolution of property matters between the husband and the wife, only say a day before the wife had died, then there would be no question as to her right absolutely to bequeath her property, in the manner that she saw as appropriate.
In the terms of the will that were signed on 19 June 2008, the wife had determined that it was proper and appropriate that a significant bequest was made to her mother and, as I indicated previously, also to friends who had shown particular care and love. On 19 June 2008, the wife knew what funds were held by her in her bank and it would not be possible for the bequests to occur, if a determination were not made, in relation to the property of the parties being able to be divided. In that respect, I am aware of the open-ended nature of the discretion available to the Court, as to whether or not it is to take into account the claims of the beneficiaries of the deceased spouse’s estate. See Menzies & Evans & Evans (1988) FLC 91-969, Re Berry (through the executor of his estate) & Berry (1990) FLC 92-118 and Mason v Hannaford; Mason-King (Intervener) (1993) FLC 92-398.
In my view, it is therefore proper and appropriate to make an order with respect to property.
I turn then, obviously, to the situation that exists at this time and to the consideration of 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 (1980) FLC 91-987; In the Marriage of Lee Steere and Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-595 and Whitely and Whitely (1996) 92-684). 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 the 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 and Russell (1999) FLC 92-877.
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.
The husband brought certain property into the relationship. It was not, however, a lengthy relationship and what is clear, is that following the motor vehicle accident, which occurred in 2006, the wife received a payout of a significant nature and that that was far and away the most substantial of the contributions that were utilised towards the acquisition of the matrimonial property of the parties.
In fact, the payment out of the mortgage in relation to the home, occurred only very shortly before the wife's death and it is clear that her contribution far outweighed that of the husband, notwithstanding the fact that he obviously provided financially during the relationship through his employment, as well as there having been financial contributions or assistance, provided through his family.
He was unable, to any real extent, if at all, to provide corroborative evidence in that regard but I accept, as appears clearly to have been accepted on the part of the wife, that certain moneys were received at different times and that some payments back to the husband's family had been effected.
It is enormously difficult to ascertain what might be the contributions of the parties, particularly in the circumstances of this case, but the starting point, as it always must be, is to determine the assets of the parties.
In that regard, it is generally a straight forward procedure because the assets appear to be very limited. They comprise the home at

Property D, which appears to have a value somewhere in the vicinity of $385,000 to $390,000. There are the moneys that are held in the account of the wife in the vicinity of approximately $85,000. There is some interest held in motor vehicles which appear to be in the vicinity of about $10,000 and thereafter there are some limited other savings, furniture items and the like.

The husband is not able to provide any real particulars or necessarily any real details in relation to such matters but it is clear that the assets of the parties are extremely limited. It was indicated on the part of the wife’s estate, that the property pool could best be summarised as approximately $510,000. I am inclined to think that this is the appropriate starting point in relation to the assets of the parties.
As I indicated previously, there obviously also needs to be a consideration of the contributions of the parties, both financial and non-financial. The husband acknowledged that a very significant amount had been provided by the wife in relation to this matter shortly prior to separation as a result of moneys received from her personal injuries claim.
The husband also indicated that there was a personal injuries claim on foot on his behalf but there was little, if any, information available in relation to what that entitlement might be. It is certainly, at least, a financial resource on the part of the husband, but could not properly at this time be included within the matrimonial assets of the parties.
It is a difficult consideration to try and assess what might be the entitlements that the parties have in relation to this particular matter but I am certainly satisfied, that the contribution made by the wife to the acquisition of assets of the parties, is significantly greater during the period of the relationship, than that of the husband. It was contended on the part of the legal personal representative for the wife’s estate that the contribution factors should be assessed as 75 per cent/25 per cent, in the wife's favour.
I would think that, in all the circumstances, including specifically the recent paying out of the mortgage that that is an apportionment which would be appropriate in relation to this matter.
I am also, of course, mindful of the need to look at and consider those matters which arise pursuant to the provisions of s.75(2). It looms large in relation to this matter because of the very significant changes that have arisen.
Quite clearly, there is no further need on the part of the wife. Quite clearly there is significantly greater responsibility that falls upon the husband, particularly with regard to the welfare, care and supervision of the child [X], as a result of the situation that this family finds itself in.
It is clear that the husband's financial circumstances are somewhat dire and, whilst there is no basis upon which there could be any claim for a need to be met by the financial distribution in favour of the wife, it is obvious that there needs to be an adjustment in relation to the property pool, to take into consideration both the changed financial circumstances of the husband and the very real responsibilities that arise in relation to the future and ongoing care of the child.
In my assessment, it is very clear that that would be a significant amount.
It was contended on the part of the estate that the adjustment would be in the vicinity of 10 per cent. I must say, being mindful of the fact that this is a young child who will be the responsibility of the husband for a significant period of time, and that as a result of taking on those responsibilities, his obligations have significantly changed that there is a far greater adjustment that would arise, in relation to the matter, than one which would be constituted by a figure of 10 per cent.
In my assessment, it would be more appropriately in the vicinity of 25 per cent and I consider that that is an appropriate adjustment in relation to this matter.
What that does, is bring the apportionment back to a 50/50 distribution of the matrimonial assets between the husband and the estate of the wife. On that basis, each party would receive approximately $255,000, in relation to the available assets for distribution between the parties.
If it were, as apparently is the case, that the estate were then to retain those moneys held in the Commonwealth Bank, approximately $85,000, then the amount that would need to be paid on behalf of the husband to the wife’s estate would be a further sum of $170,000.
That would be, in my assessment, the appropriate distribution between the parties, and would be a just and equitable distribution in relation to the property. $170,000 constitutes approximately 43 per cent of the value of the equity generally agreed to be held in the former matrimonial home. For convenience, I would think that the appropriate percentage to be utilised in relation to this matter is 40 per cent.
I have indicated my concern already in relation to making arrangements with regard to either the sale of the property, which would lead to further upheaval in relation to the life of this child, as well as the difficulties, which I would think would arise if it were to be a situation where the legal personal representative were to hold an interest in the property on behalf of the child, until such time as [X] attains his majority.
I do not consider that that is an appropriate or workable arrangement, in light of the matters to which I have already referred. I am mindful, however, of the fact that the Court clearly has the power, pursuant to the provisions of s.79 to effect an alteration of property interests, in relation to property of the parties. Section 79(1) clearly provides that an order can be made which provides for property to be held on trust for a child. The provisions of s.79(1)(d) are in these terms:
In property settlement proceedings the court may make such orders as it considers appropriate.
(d) an order requiring:
(i) either or both of the parties to the marriage; or
(ii) the relevant bankruptcy trustee (if any);
to make for the benefit of either or both of the parties to the marriage or a child of the marriage such entitlement or transfer of property as the Court determines.
In my view, that is the appropriate course to follow in relation to this matter. It effects a settlement which reflects the wishes of the wife in relation to the benefit to be received by the child. It provides a secure and stable, as well as, continuing arrangement in relation to the retention of the home in which the husband and the child now reside and it provides certainty in relation to the receipt by the child, in the future, of entitlements in relation to the property, either at the time that a sale might be effected after he has attained his majority, or it fixes a sum which would be held and continued to be held on the part specifically, of the child.
It is, in my view, the appropriate course to follow as it reflects both the wishes of the husband, in ensuring that the interests of he and the child are to the forefront but at the same time provides a guarantee and a certainty in relation to the child receiving the benefit that the wife clearly wished him to receive, following her death.
I intend therefore, to make orders in relation to this matter in these terms:
That by way of property settlement:
(1)The husband forthwith effect a transfer of 40 percent of his interest in the property situate at Property D, in the State of Queensland, to himself, as trustee for the child, [X] born in 2002.
(2)The husband be responsible for the payment of all rates, insurances, utilities and other expenses associated with the day-to-day maintenance of the property situate at Property D, in the State of Queensland.
(3)The legal personal representative be responsible for the preparation of the necessary transfer documentation to effect the transfer pursuant to order 1 herein and that the legal personal representative be responsible for all costs associated with effecting the transfer, including any legal costs relating to the preparation of the necessary transfer documents.
(4)Each party otherwise retain for their own property absolutely, all of their right, title and interest in and to any property, chattels, money, bank accounts, superannuation entitlements, insurance entitlements and choses in action, as may be held by them as at the date of this order.
(5)
In the event of the husband failing to execute any documentation necessary to effect the transfer pursuant to order 1 herein, then and in that event the Registry Manager of the Family Law Courts, Brisbane is empowered to sign such documentation so as to effect the transfer, provided however that the Registry Manager is satisfied that the husband has failed for a period in excess of

7 days from signing such documentation as may be provided to him.
(6)Each party have liberty to apply within 28 days of the date of this order in relation to any point of clarification in relation to the orders and in respect of costs.

I certify that the preceding ninety-three (93) paragraphs are a true copy of the reasons for judgment of Coker FM

Associate: C Herbst

Date: 21 April 2009