Heed and Heed
[2008] FamCA 79
•19 February 2008
FAMILY COURT OF AUSTRALIA
| HEED & HEED | [2008] FamCA 79 |
| FAMILY LAW - PROPERTY SETTLEMENT – Contributions – Adjustment for other matters |
| Family Law Act 1975 (Cth) s 75, s 79 |
In the Marriage of Hickey (2003) 30 Fam LR 355
Mallett v Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) l2 Fam LR 139
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
In the Marriage of Coghlan (2004) 33 Fam LR 414
VAK & AK [2005] FamCA 803
In the Marriage of Pellegrino (1997) 22 Fam LR 474
Kessey v Kessey (1994) FLC 92-495
In the Marriage of Lee Steere (1985) 10 Fam LR 431
In the Marriage of Pierce (1998) 24 Fam LR 377; (1999) FLC 92-844
| APPLICANT: | Mr Heed |
| RESPONDENT: | Mrs Heed |
| FILE NUMBER: | SYF | 4154 | Of | 2006 |
| DATE DELIVERED: | 19 February 2008 |
| PLACE DELIVERED: | Sydney |
PLACE HEARD: | Sydney |
| JUDGMENT OF: | Judicial Registrar Loughnan |
| HEARING DATE: | 14 & 15 February 2008 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr R. M. Schonell |
SOLICITOR FOR THE APPLICANT: | Turner Whelan Solicitors |
| COUNSEL FOR THE RESPONDENT: | Mr W. Washington |
SOLICITOR FOR THE RESPONDENT: | Shana Radnan Solicitor |
Orders
That the parties forthwith do all acts and sign all documents necessary to cause the property at L, being all of the land contained in Folio Identifier …, to be sold and the proceeds of sale divided as follows:-
(a)In payment of the Agent’s commission, auction expenses, if any, and legal expenses of the sale;
(b)In payment of the outstanding mortgage to Homeside;
(c)In payment of 51.5% of the balance to the husband; and
(d)In payment of the remainder to the wife.
In order to facilitate the sale in accordance with Order 1 herein:-
(a)That within seven days of the date of these Orders the parties agree on an Agent to act on their behalf with respect to the sale and failing agreement the parties shall jointly approach the President of the Real Estate Institute of New South Wales within seven days thereafter to request that the President appoint an Agent to act on their behalf and the parties shall each pay one-half of any expenses associated with such appointment;
(b)That within seven days the parties shall agree on a Solicitor or Conveyancer to act on their behalf with respect to the sale and failing agreement the parties shall jointly approach the President of the Law Society of New South Wales within seven days thereafter to request that the President appoint a Solicitor to act on their behalf and the parties shall each pay one-half of any expenses associated with such appointment;
That within 21 days of the date of these Orders the wife make available for collection by the husband the piano and the husband’s tools and fishing rods, contained within the former matrimonial home.
Ownership of the aeroplane tyre, currently in the L property shall pass to the husband, who shall immediately transfer that tyre to the child, D.
The wife retain sole right, title and interest to the Honda Acclaim and Daewoo Nubira motor vehicles and the husband retain sole right, title and interest to the Toyota Corolla motor vehicle.
That except as otherwise specified herein, each party retain sole right, title and interest to any other assets or resources currently in their respective sole name or possession, including but not limited to furniture, personal effects, chattels, shares, funds held in any superannuation fund, redundancy entitlements, interest in any family trust or company.
Each party retain sole responsibility for any liabilities in their respective sole name including but not limited to credit card debts, loans from family members and each party shall indemnify and keep the other indemnified with respect to all such liabilities.
Both parties shall do all acts and things and sign all documents necessary to give effect to these Orders and in the event either party refuses or neglects to do such act or thing or sign such document within seven days of such act or thing being required or such document being submitted to them for signature, then pursuant to Section 106A of the Family Law Act 1975, a Registrar of the Family Court shall have power to do such act or thing or sign such document on behalf of the defaulting party.
IT IS NOTED that publication of this judgment under the pseudonym Heed & Heed is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYF4154 OF 2006
| Mr Heed |
Applicant
| Mrs Heed |
Respondent
REASONS FOR JUDGMENT
After living together for more than 15 years the parties cannot agree on a settlement of their property. For convenience I will refer to the parties as the husband and wife. I note, however, that they are now divorced.
Applications
The husband seeks orders in accordance with a minute of orders provided with his Case Outline as follows:
1. That the parties forthwith do all acts and sign all documents necessary to cause the property at [L], being all of the land contained in Folio Identifier […], to be sold and the proceeds of sale divided as follows:-
a.In payment of the Agent’s commission, auction expenses, if any, and legal expenses of the sale;
b.In payment of the outstanding mortgage to Homeside;
c.In payment of the balance so as to effect a division of the parties’ pool of assets 60% in favour of the husband and 40% in favour of the wife in accordance with the Schedule which is annexed hereto and marked with the Letter “A”.
2.In order to facilitate the sale in accordance with Order 1 herein:-
a.That within seven days of the date of these Orders the parties agree on an Agent to act on their behalf with respect to the sale and failing agreement the parties shall jointly approach the President of the Real Estate Institute of New South Wales within seven days thereafter to request that the President appoint an Agent to act on their behalf and the parties shall each pay one-half of any expenses associated with such appointment;
b.That within seven days the parties shall agree on a Solicitor or Conveyancer to act on their behalf with respect to the sale and failing agreement the parties shall jointly approach the President of the Law Society of New South Wales within seven days thereafter to request that the President appoint a Solicitor to act on their behalf and the parties shall each pay one-half of any expenses associated with such appointment;
3.That within 21 days of the date of these Orders the wife make available for collection by the husband the piano, aeroplane tyre and the husband’s remaining personal belongings, including books and photographs contained within the former matrimonial home.
4.That the wife retain sole right, title and interest to the Honda Acclaim and Daiwoo (sic) Nubria (sic) motor vehicle and the husband retain sole right, title and interest to the Toyota Corolla motor vehicle.
5.That except as otherwise specified herein, each party retain sole right, title and interest to any other assets or resources currently in their respective sole name or possession, including but not limited to furniture, personal effects, chattels, shares, funds held in any superannuation fund, redundancy entitlements, interest in any family trust or company.
6.Each party retain sole responsibility for any liabilities in their respective sole name including but not limited to credit card debts, loans from family members and each party shall indemnify and keep the other indemnified with respect to all such liabilities.
7.Both parties shall do all acts and things and sign all documents necessary to give effect to these Orders and in the event either party refuses or neglects to do such act or thing or sign such document within seven days of such act or thing being required or such document being submitted to them for signature, then pursuant to Section 106A of the Family Law Act 1975, a Registrar of the Family Court shall have power to do such act or thing or sign such document on behalf of the defaulting party.
ANNEXURE “A”
SCHEDULE
ASSETS
Nett proceeds of sale of [L Property] TBA
Husband’s Qantas Superannuation $88,915.15
Wife’s First State Super $41,540.92
Household contents at former matrimonial home $16,000.00
Household contents in husband’s possession $1,000.00
Holden Acclaim motor vehicle $11,000.00
Daiwoo Nubria motor vehicle $4,000.00
Husband’s Toyota Corolla $3,000.00
330 IAG shares (formerly NRMA) (at $3.57 each as at 12.2.08) $1,178.10
Husband’s 180 Qantas shares (at $4.62 each as at 12.2.08) $831.60
TOTAL - TO BE CALCULATED UPON SETTEMENT OF THE SALE OF THE FORMER MATRIMONIAL HOME.
HUSBAND
Husband receives 60% of total nett assets as follows:-
Husband’s Qantas Superannuation $88,915.15
Household contents in husband’s possession $1,000.00
Toyota Corolla $3,000.00
330 IAG shares (formerly NRMA) (at $3.57 each) $1,178.10
180 Qantas shares (at $4.62 each) $831.60
TOTAL $94,858.85
Plus balance from nett proceeds of sale to reach 60% of total assets TBAWIFE
Wife receives 40% of total nett assets as follows:-
Wife’s First State Super $41,540.92
Household contents at former matrimonial home $16,000.00
Holden Acclaim motor vehicle $11,000.00
Daiwoo (sic) Nubria (sic) motor vehicle $4,000.00
TOTAL $72,540.92
Plus balance from nett proceeds of sale to reach 40% of total assets TBA
The wife seeks orders to the effect that the net proceeds of sale of the former matrimonial home be divided in the proportions 55% to the wife 45% to the husband and that they retain all other assets and liabilities in their respective names. The detail of the wife’s orders is contained in a minute of orders provided to my chambers on the morning of the second day of the hearing which provides as follows:
1. That the parties forthwith do all acts and sign all documents necessary to cause the property at [L], being all of the land contained in Folio Identifier […], to be sold and the proceeds of sale divided as follows: -
a) In payment of the Agent’s commission, auction expenses, if any, and legal expenses of the sale;
b) In payment of the outstanding mortgage to Homeside;
c) In payment of the balance as to 55% in favour of the wife and 45% in favour of the husband.
2. In order to facilitate the sale in accordance with Order 1 herein: -
a) That within twenty eight (28) days of the date of these Orders the parties agree on an Agent to act on their behalf with respect to the sale and failing agreement the parties shall jointly approach the President of the Real Estate Institute of New South Wales within seven days thereafter to request that the President appoint an Agent to act on their behalf and the parties shall each pay one-half of any expenses associated with such appointment;
b) That within twenty-eight (28) days the parties shall agree on a Solicitor or Conveyancer to act on their behalf with respect to the sale and failing agreement the parties shall jointly approach the President of the Law Society of New South Wales within seven days thereafter to request that the President appoint a Solicitor to act on their behalf and the parties shall each pay one-half of any expenses associated with such appointment;
3. That within 28 days of the date of these Orders the wife make available for collection by the husband the piano and the husband’s remaining personal belongings contained within the former matrimonial home.
4. That the aeroplane tyre be retained by [the child, D].
5. That the wife retain sole right, title and interest to the Holden Acclaim and Daiwoo (sic) Nubria (sic) motor vehicles and the husband retain sole right, title and interest to the Toyota Corolla motor vehicle.
6. That except as otherwise specified herein, each party retain sole right, title and interest to any other assets or resources currently n their respective sole name or possession, including but not limited to furniture, personal effects, chattels, shares, funds held in superannuation fun, redundancy entitlements, interest in any family trust or company.
7. Each party retain sole responsibility for any liabilities in their respective sole name including but not limited to the credit card debts, loans from family members and each party shall indemnify and keep the other indemnified with respect to all such liabilities.
8. Both parties shall do all acts and things and sign all documents necessary to give effect to these Orders and in the event either party refuses or neglects to do such act or thing or sign such document within seven days of such act or thing being required or such document being submitted to them for signature, then pursuant to Section 106A of the Family Law Act 1975, a Registrar of the Family Court shall have power to do such act of thing or sign such document on behalf of the defaulting party.
Affidavits
1. Affidavit of Husband filed 7 November 2007.
2. Affidavit of Husband filed 14 February 2008
3. Affidavit of Mr H Heed filed 7 November 2007.
4. Financial Statement of Husband filed 7 November 2007.
5. Affidavit of Ms K Heed filed 27 November 2007.
6. Financial Statement of Wife filed 27 November 2007.
Valuation of land at L dated 22 January 2008
Issues for determination
The issues for determination are:
The impact on the balance of contributions of the gifts and inheritances received by each of the parties during the marriage; and
The extent of the adjustment in favour of the wife pursuant to the non-contribution aspects of section 79(4).
Short History
The husband and wife are 47 and 38 years of age respectively. They commenced cohabitation in either about August or October 1989 or about February 1990. They were married in October 1990, separated on 4 December 2005 and are now divorced.
Children
The parties have three children:
Awho was born in January 1992 and as at the date of the hearing was 16 years of age;
D who was born in February 1993 and as at the date of the hearing was 14 years of age; and
Wwho was born in September 1995 and as at the date of the hearing was 12 years of age.
Background Facts
The husband says that the parties commenced cohabitation in about February 1990. The wife says it was variously in August or October 1989. Nothing much turns on this issue.
The wife was employed in secretarial capacity with the Council and worked a second job at a sports club. She had a motor vehicle and savings of about $5,000.00. The husband says he had savings of $35,000 to $40,000 from a property settlement with his first wife and a motor vehicle. The wife thinks the husband’s savings stood at about $30,000. The husband was employed full time.
On 1 May 1990, the husband’s aunt executed a Will leaving all of her estate to the husband.
The parties were married in October 1990.
In December 1990 they moved into M, a house property owned and, at that time, still occupied by the husband’s aunt.
From December 1990 to February 1997 the parties occupied the M home and they paid no rent or board.
On 23 January 1991 they purchased land at D for $47,000. The wife says that the purchase was facilitated by a personal loan of $20,000.00 from the Commonwealth Bank. It is the husband’s case that there was no such loan. The wife was challenged about this issue but she did not resile from her evidence. Nothing turns on this issue.
In January 1992, A was born.
In about early 1993 repairs were carried out to the roof of the property at M and insulation batts were installed, all paid for by the husband’s aunt.
In February 1993, D was born.
In 1994 new windows were installed at the M property, again paid for by the husband’s aunt.
In September 1995, W was born.
From approx. 1995 to 2005 the wife received $65,000 by way of distributions of income from the wife’s Family Trust, being four payments of approximately $10,000.00 and one payment of $25,000.00 in 2005. The later payment was paid into the mortgage account and the earlier payments were used to pay off credit cards and otherwise for day to day family living expenses.
On 26 April 1996 the land at D was sold for $51,500.00.
In February 1997, the husband’s aunt died. In April 1997 Probate of her will was granted. On or about 6 June 1997 the unencumbered property at M was transferred into the husband’s sole name. On or about 25 June 1997 the husband received a cheque in the sum of $42,725.79 from the estate of his late aunt.
In September 1997 the property at M was sold to P Pty. Limited for $466,666.66. There was Agent’s commission of approximately $6,000.00. The property was otherwise unencumbered.
In September 1997 the parties purchased the property at L (the former matrimonial home) for $388,000, as tenants in common in equal shares.
In 1997 the wife re-entered the paid workforce after a period of full-time parenting.
From 17 November 1997 to 16 May 1998 the parties continued to live at M under a Residential Tenancy Agreement with P Pty. Limited, while the home at L was demolished and a new home built. The husband and some work colleagues demolished the old home on the land at L and the parties entered a contract with W Homes to build a new home at a cost of $153,246.00. The balance of the proceeds of sale of the M property, together with the balance of the husband’s inheritance, together with a mortgage in the parties joint names from RAMS, were utilized to pay for the cost of the new home.
The initial mortgage to RAMS was in the sum of $140,000 but by December 1998, when the parties took possession of the new house at L, the mortgage stood at $240,000. The additional borrowings paid for a pool, the purchase of a Daewoo motor vehicle for approximately $20,000 and approximately $10,000 was paid into the RCI Travel Scheme.
In September 2001 the husband’s employer went into liquidation. The husband continued to work with that employer for approximately three or four months thereafter. From about late 2001 to 2004 the husband walked dogs to supplement the family income. The wife kept the financial records of that business and she supplemented the family income by working at three jobs.
From late 2001 to 2005 the husband received redundancy and other payments from his previous employer in varying amounts, but up until separation he received a total of approximately $66,000. Some of those funds were used to install stairs at the front of the home at L and a pergola at the back of the house at L, and were otherwise spent on family living expenses.
In early 2002 the husband commenced work in the transport business for six to eight weeks, before commencing work at Qantas in a temporary full time position. In September 2002 the husband became a permanent employee of Qantas and continues to work at Qantas. The wife continued working part time and caring for children.
On various dates her family make gifts of money and goods to assist her.
On 4 December 2005 the parties separated when the husband vacated the former matrimonial home.
From 4 December 2005 to June 2007 the husband continued to pay $100 per fortnight to HCF for private health insurance for the family, including the wife and the children. That ceased at the request of the wife in June 2007 when the wife arranged separate private health insurance for herself and the children.
From 4 December 2005 to August 2007 the husband lived in rented premises at H.
From December 2005 to December 2006 the husband paid approximately $1,100 per fortnight into the parties’ joint account, being the amount of approximately $618 per fortnight in child support and the balance as a contribution towards the mortgage instalments, which equated to approximately 65% of the mortgage instalment payment required each fortnight.
In December 2006 the parties agreed the husband would pay $1,000 per fortnight into the joint mortgage account, again representing approximately $618 by way of child support and the balance as a contribution to the mortgage. The husband also agreed to pay the wife the sum of $500, to assist with the purchase of Christmas presents for the children and expenses for the children over Christmas that year.
In mid-August 2006 the husband received a further payment from his previous employer in the sum of approximately $4,000 which he deposited into the Qantas Credit Union line of credit to reduce the outstanding balance.
In August 2006 the husband received a notice in his letterbox from a Mercantile Agent indicating the American Express Card was cancelled and legal proceedings were threatened as a result of a debt to American Express of $8,729. The husband negotiated with the Mercantile Agent to reduce the debt down to $7,100, and arranged a personal loan from Qantas Credit Union in the sum of approximately $8,000 to pay out the American Express card. The husband alleges that approximately $4,000 of that debt was incurred prior to separation, and the balance incurred by the wife after separation.
In August 2006 the wife obtained an Assessment of child support from Child Support Agency, and applied for the amount to be reassessed to take into account the children’s school fees.
In early 2007 the husband sold a Holden Rodeo motor vehicle for $5,000 and bought a 1989 Toyota Corolla for $3,000. The proceeds of sale of the Rodeo were deposited into the husband’s Credit Union account, and the purchase price of the Corolla, plus some necessary repairs were withdrawn from the Credit Union account.
In February 2007 the Child Support Agency reassessed the amount of the husband’s child support to be $913.40 per fortnight. That amount is paid directly to the Child Support Agency each month from the husband’s wages, by his employer. The husband says he also pays $400 per fortnight into the parties’ joint NAB account as a continuing contribution towards the mortgage.
A Decree Nisi of Dissolution of the parties’ marriage was pronounced in July 2007.
In July 2007 the husband’s father gave him $90,000 in the form of a cheque made out to the husband’s girlfriend, Ms E. The husband applied those funds to discharge a personal loan and Qantas line of credit in the combined sum of $18,000, $35,200 has been transferred in 6 transactions to the husband’s Qantas Credit Union Account and $29,000 was used to buy Commsec shares with his girlfriend. From the Credit Union account the husband has paid $22,708.41 to his solicitors for these proceedings. The husband says that about $2,000 of the funds from his father will remain once he pays his solicitors a further $10,000.
In July/August 2007 the husband received 180 Qantas shares as a work bonus.
From August 2007 to January 2008 the husband lived with his father at M. In February 2008 the husband moved to rental premises at Y.
On 3 September 2007 final orders were made by this court with respect to the arrangements for the children, in terms agreed between the parties.
Credit and Submissions
The evidence of the witnesses
The only witnesses called for cross-examination were the parties
As the case was finally argued there are no significant factual disputes and it is not necessary to make observations about credit.
Submissions
Although the orders sought by the parties are expressed in terms of a division of the net proceeds of sale of the L home, it is common ground that within a percentage or two, such a division will achieve a similar division of the assets overall.
The submissions made on behalf of the husband were to the following effect:
The case is argued on the basis of one, agreed pool of assets and liabilities;
The husband’s contributions overall could be 75% compared to 25% by the wife. That is largely because of the initial imbalance of funds, the 7 year rent free use and later, the injection of the entire value of the M property. It is submitted that the contribution was on behalf of the husband because that was the intention of the husband’s aunt, corroborated by her own will and that of the husband’s father that both predated the marriage and by the unchallenged evidence of the husband’s father. It is submitted that the conversations that the wife asserts she had with the husband’s aunt and the things that the parties did for her do not change the unchallenged evidence of a consistent intention to benefit the husband. The will was not changed as a result of those things and the contribution must be seen as one on behalf of the husband;
The husband’s contributions continued after separation, including him paying out a debt to American Express;
Provided that the contributions are found to be in those proportions, there should be an adjustment of 15% to the wife. The matters warranting such an adjustment are the fact that the wife’s income earning capacity is currently qualified and in any event, less than that of the husband; although not what the husband wants, in fact the burden of the children falls largely on the wife and that cannot be entirely offset by the husband’s child support;
The wife agrees to the husband taking a piano from the L property and some personal items. The husband presses for the return of an aeroplane tyre, which he would like to give to D.
It is submitted that the division of the proceeds of sale of the L property in the proportions 60% to the husband and 40% to the wife will achieve an overall distribution of about those proportions.
The submissions made on behalf of the wife were to the following effect:
There are few factual disputes;
The husband’s contributions overall could be 65% compared to 35% by the wife. That was largely because of the M property, which it is conceded, must be seen as a contribution made on behalf of the husband. That contribution was in effect made in 1990. The initial imbalance of savings has little residual effect because the funds were dissipated. The impact of the M property is ameliorated by the valuable contributions of funds and goods from the wife’s family and by the impact of very impressive contributions by the parties over the entire marriage;
As to section 75(2), the wife’s health is compromised, she has an earning capacity less than that of the husband and she will have the overwhelming parenting task for at least another 6 years with the possibility of the children going on to tertiary education. Orders seeking 55% of the assets to her require a 20% adjustment under this provision and that is what is contended for on behalf of the wife.
The wife agrees to the husband taking a piano from the L property and some personal items. The wife agrees that the aeroplane tyre should go to D.
It is submitted that the division of the proceeds of sale of L in the proportions 55% to the wife and 45% to the husband will achieve an overall distribution of about those proportions.
The approach in proceedings under section 79
The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, I should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. [1]
[1] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370
The property of the parties at the date of the hearing
The Court is required to make a finding as to the property of the parties at the date of the hearing.
The parties agreed that the relevant list of assets and liabilities is as set out below. In reaching that agreement the parties have ignored for the purposes of the pool of assets to be divided, both the advances they have recently received from their fathers and the assets bought and debts (including legal fees) paid with those advances. In each case the recipient asserts that the advance has the character of a loan.
On the basis of that agreement, the assets of the parties are:
Assets Value L Property $1,000,000 330 IAG shares (formerly NRMA) (at $3.57 each as at 12.2.08) (H) $1,178.10 Husband’s 180 Qantas shares (at $4.62 each as at 12.2.08) $831.60 Husband’s Toyota Corolla $3,000.00 Husband’s savings at Qantas Credit Union (Financial Statement sworn 7.11.07) $2,200.00 Household contents in husband’s possession $1,000.00 Husband’s Qantas Superannuation $88,915.15 Wife’s savings at Westpac Bank, estimate (Financial Statement sworn 27.11.07) $285.00 Wife’s savings at St. George Bank, estimate (Financial Statement sworn 27.11.07) $15.00 Holden Acclaim motor vehicle (W) $11,000.00 Daewoo Nubira motor vehicle (W) $4,000.00 Household contents at former matrimonial home $16,000.00 Wife’s First State Super $41,540.92 Total $1,169,965.77
Liabilities:
On the basis of the agreement referred to above, I find that the relevant liability of the parties as at the date of the hearing is as follows:
Liabilities Amount Mortgage to Homeside on the L property $170,638.00 $170,638.00
The net assets have a value of $999,327.77 ($1,169,965.77 - $170,638).
Financial Resources
Each of the parties has received financial assistance from his/her family. Up until 2005 the wife received distributions of income from a family trust. More recently she was advanced $55,000 from her father, which she asserts is in the form of a loan, repayable when she is able. She hopes that she will receive further moneys from her family. Presumably in support of a contention that the scope for such assistance is limited, the wife gave some evidence about her father needing to support her brother who has significant medical expenses. Without knowing the extent of the assets held in the trust or the financial circumstances of the wife’s father, it is not possible to reach any conclusion from that evidence.
Similarly the husband has recently received $90,000 from his father. The husband says that he intends to repay those moneys to his brother. It seems odd that the husband would buy shares with $29,000 of those funds if he intends to repay the money to his brother, but there it is. It is not suggested that the advance was in form of a loan, just that the husband intends to repay it. There is no evidence on this issue from the husband’s father or brother. Again, even if the advance was a gift, there is no evidence about the financial circumstances of the husband’s father from which a conclusion could be drawn about his capacity to provide further support.
Contributions
The obligations placed on the Court by s 79 call for an assessment of the respective contributions of the parties. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets[2]. There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties[3].
A separate pool for superannuation
[2] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1
[3] In the Marriage of Shewring (1987) l2 Fam LR 139
As to whether the Court should assess contributions asset by asset or globally, the authorities have it that the latter approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court opined that it is preferable for contributions to superannuation to be assessed separately from those made to other assets. However the Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:
“… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.”
Here the parties have themselves adopted a global approach to the assessment of contributions. On that basis, I too will employ a global approach.
Contributions
Section 79(4)(a) Contributions
The initial financial contribution of the husband was greater than that of the wife. He brought in savings of at least $30,000 and perhaps as much as $40,000. The wife brought in $5,000. They each had a motor vehicle.
The husband received over $500,000 from estate of his late aunt in 1997. He received a cheque in the sum of $42,725.79 from the estate in June 1997 and in September 1997 the property at M was sold to P Pty. Limited for $466,666.66. The agent’s commission was $6,000.
$65,000 came into the marriage through distributions of income from the wife’s father’s family trust in the period between the financial years ending 30 June 1998 and 30 June 2005.
Each of the parties was in paid employment for periods during the marriage. The husband was largely engaged full-time. The wife did not work outside the home from about 1992 to 1997. She did some casual secretarial work over that period. Her work in recent years has been part-time. The parties applied their income to the purposes of the family.
Section 79(4)(b) contributions
As to non-financial contributions - the parties had rent free accommodation in the home of the husband’s paternal aunt for the first 7 years of the marriage. It is agreed that they paid the utilities. The wife recalls paying at least one lot of council rates from joint funds. The parties undertook normal maintenance and made some improvements to the M home. The wife recalls that the husband paid for and undertook the installation of new laminex in the kitchen and replaced carpets. However, major repair and maintenance costs for the property were paid from the funds of the husband’s Aunt.
The wife’s family gave the parties two motor vehicles, paid for a security system, may have paid for insurance for two cars, may have paid $1,000 in home insurance, paid some school fees, gave the parties curtains, a refrigerator and a microwave; and might have given the parties a dining room table, other curtains, blinds, a leather lounge and a dryer.
The husband and some work colleagues demolished the original home on the land at L.
Section 79(4)(c) contributions
There are three children of the marriage.
The wife was the primary care giver of the children and was largely responsible for household tasks. The husband worked shift work and was thus available to the children during school hours at some times.
It is likely that the wife’s contributions continued after separation although the husband is critical of what he sees as an interference by the wife with his relationship with the children.
I am satisfied that the wife was the primary care giver of the children and the main homemaker. The time spent by the husband in paid employment must have restricted his availability to assist with those roles.
Conclusion on Contribution
The husband argues that the parties’ contributions favour him in the proportions 75% to 25%. That is based on the imbalance of initial contributions and the fact that the L property was bought outright with his inheritance and that alone represents about two thirds of the pool of assets today. The husband relies on the valuation of the land alone at L at $670,000 for that submission. . The wife argues that the contributions were more like 65% by the husband and to 35% in her favour.
This is a long marriage. The husband’s initial contribution was greater than that of the wife. The parties had 7 years of rent free accommodation in the M property. That is a very significant contribution. The wife’s family contributed gifts of personalty, including two additional motor vehicles.
The critical issue in the case is the way in which the injection of the M property should be treated. The proceeds of sale of that property were the foundation of the assets of the parties today. Although the matter was initially disputed and much of the focus of the parties’ written and oral evidence was devoted to the issue, it is ultimately conceded that the house was a contribution made on behalf of the husband alone. About halfway through the marriage the husband inherited over $500,000 from his Aunt.
In accordance with the discussion about this issue in the Full Court decision of VAK & AK [2005] FamCA 803; In the Marriage of Pellegrino (1997) 22 Fam LR 474; Kessey v Kessey (1994) FLC 92-495 a contribution sourced in a family member of one of the parties will normally be taken to be a contribution on behalf of that party. That approach might not be followed where there is evidence that the donor intended otherwise. Here the intention of the husband’s Aunt was expressed in her will made before the marriage. That will remained unchanged for the rest of her life (another 7 years). The intention was entirely consistent with an agreement made by the husband father and the husband’s Aunt before the parties commenced to live together and evidence about that agreement is unchallenged. Thus the belated concession made on behalf of the wife is a sensible one. The contributions that came in the form of the rent free occupation of the M property for 7 years and, about halfway through the marriage, over $500,000 from the estate of the husband’s aunt were contributions made on behalf of the husband.
Otherwise:
the husband’s initial contribution was greater than that of the wife;
the parties worked hard and made a significant contribution as wage earners and as parents and homemakers over nearly 16 years of cohabitation and since;
The husband’s primary role was that of wage earner and the wife had primary responsibility for the children as well as having some part-time paid work;
I am referred to In the Marriage of Lee Steere (1985) 10 Fam LR 431 and In the Marriage of Pierce (1998) 24 Fam LR 377; (1999) FLC 92-844, particularly in relation to the way in which other contributions have an impact on an injection of assets during the marriage. Those cases reinforce that propositions that each case turns on its own facts; contributions, whether initial or otherwise are not normally carried forward as a mathematical proportion; early contributions are not “eroded” by later or greater contributions; contributions must be weighed by reference to other valuable contributions made during the marriage.
Here the provision of rent free accommodation for 7 years was a very valuable contribution. The inheritance of nearly $500,000 in 1997 was the real foundation of the parties’ current wealth. The better part of $100,000 in moneys and goods came into the marriage through the wife. The parties worked hard for over 15 years in various ways with the husband the main wage earner and the wife the main parent and homemaker.
Overall it seems to me that those contributions would be properly reflected in a finding that they were made in the proportions 65% by and on behalf of the husband and 35% by and on behalf of the wife. Any greater disparity in favour of the husband puts his contributions overall at more than twice those of the wife which would undervalue her efforts over the period of cohabitation and since. A finding that his contributions were of a lesser percentage would understate the critical influence of the contributions made through the husband’s aunt.
The other matters in Section 79
Dealing with the matters identified in the legislation:
Section 79(4) (d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the parties. There is no evidence about this.
Section 79(4)(e) - Section 75(2) Factors
The relevant matters in Section 75(2) would seem to be paragraphs (a), (b), (c), (k) and (l).
(a) the age and state of health of each of the parties;
First, as to the age and state of health of each of the parties. The husband is 47 years of age and the wife is 38.
The wife’s health is currently compromised but has yet to be fully investigated. Since late 2007 she has been in receipt of workers compensation payments related to a possible psychological condition. She has an appointment with a psychiatrist in March and is being treated with anti-depressants. At this early stage there is no prognosis in relation to the wife’s health.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
The husband receives $1,500 per week in the form of wages from Qantas. He was receiving $49 per week in a Carers Allowance when he lived with his father. He now lives alone in rented accommodation at Y. I am not sure if the allowance continues. The husband’s fixed expenditure is as follows:
Expenditure
Amount
Income tax $358.00 Superannuation contributions $45.00 Mortgage payments to Homeside on the L property $200.00 Rent for Y premises $260.00 Motor vehicle registration on Toyota Corolla motor vehicle $8.00 Third Party property insurance on Toyota Corolla motor vehicle with AAMI $7.00 Child Support payments $457.00 All other expenses $140.00 Total $1475.00
There is no suggestion that the husband is not exercising his earning capacity.
The wife’s income is $1,304.45 per week made up of workers compensation payments of $712.44, referable to her job as a part-time Secretary in the public service, $135.31 by way of Family Allowance and Child Support payments of $456.70. The wife lives with the parties’ children. A earns an average of $40 per week from a casual job in a Shopping Centre. D hopes to take a similar job. The wife says that the husband pays $150 per week on the L mortgage. I do not know why he says he pays $200 per week yet the wife acknowledges only $150.
The wife’s expenses are as follows:
Expense Amount Income tax $126.00 Contributions to First State Superannuation $20.00 Mortgage payments to Homeside on the L property $157.50 Rates on the L property $45.00 Motor vehicle registration – Holden $10.00 Payments on Citibank Ready Credit loan $50.00 Living expenses $1,558.00 Food $200.00 Household supplies $75.00 House repairs $100.00 Gas $40.00 Electricity $40.00 Telephone $50.00 Petrol $40.00 Motor vehicle maintenance $48.00 Fares and parking $30.00 Clothing and shoes $70.00 Childrens activities $35.00 Child minding $25.00 Medical dental and optical $70.00 Entertainment and hobbies $50.00 Holidays $200.00 Education expenses including school fees $200.00 Chemist pharmaceuticals $10.00 Gardening lawnmowing $10.00 Cleaning $40.00 Repairs to furnishings and appliances $20.00 Dry cleaning $5.00 Books and magazines $5.00 Gifts $100.00 Hairdressing toiletries $80.00 Internet $15.00 $1558.00 Total $1,966.50
Although not mentioned above, the wife also pays family membership in a health fund that covers herself and the children. The wife does not explain how she funds a weekly deficit of over $600. It may be that some of her expenses are optional – such as a total of $300 per week spent on gifts and holidays. The wife apportions the weekly living expenses as to $358.25 for herself and $1,199.75 for the children. Evidence about the wife’s assets and liabilities is set out earlier in these reasons.
As to her earning capacity, since 1997 the wife has worked part-time. Since late 2007 she has been in receipt of workers compensation payments related to a possible psychological condition. She has an appointment with a Psychiatrist in March and is being treated with anti-depressants. The workers compensation aspect has arisen based on a doctor’s opinion of a link between stress and or depression suffered by the wife and the impact of industrial action at the wife’s workplace. At this early stage there is no prognosis in relation to the wife’s health and therefore no indication of the impact on her earning capacity. Obviously there may be some compensation available to the wife if her ability to retain paid employment continues to be restricted and that continues to be linked to her employment.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
A is in Year 11, D is in Year 10 at R College and W is in Year 7 at that same school. Orders made by consent on 3 September 2007 include provision for D to spend time with the husband two afternoons each week; every third weekend, day only; and for one half of all school holidays. Whether the weekends or holidays include overnight, is left to D. W is to spend time with the husband as agreed between the parties. The orders make no provision for A to spend time with the husband. The Court was asked to note that the parties were hopeful that W would ultimately spend the same time as D, with the husband and that they were working towards encouraging A to spend time with him. In practice the husband has not spent time with A since some time in 2006 nor W since January 2007.
Thus the day to day responsibilities for the children fall almost exclusively to the wife. Sadly, A was assaulted some time ago. Although there is no detail provided by the wife, it would be reasonable to assume that she may need more supervision than the average Year 11 student. Into the near term that assistance could only come from the wife. The wife gives some evidence about her extensive involvement in curricular and extra curricular activities of the children. Those things might limit her capacity for full-time employment.
Finally, it was the parties’ arrangement during the marriage that the wife be more available to the children than full-time paid employment would allow. Ignoring her recent health problems, there is nothing about the current circumstances, involving the parties’ separation and the estrangement between the children and the husband, that would better fit her for full-time employment now.
(d) commitments of each of the parties that are necessary to enable the party to support:
himself or herself; and
a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
I have set out the detail of those commitments above.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,
and the rate of any such pension, allowance or benefit being paid to either party;
The parties have been able to generate some superannuation entitlements. Neither of the parties seeks a splitting order.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
There is little evidence in relation to the standard of living of the parties during the marriage. The wife says that the parties enjoyed holidays to England, Wales, Hong Kong, America, South Mole Island and Surfers paradise on numerous occasions. Each of the children attends a non-government school. The wife referred to the parties eating lobster and living well, when seeking to explain why their initial savings might not have all survived to be applied to the D land. Otherwise there is no evidence of the parties living an affluent lifestyle.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
This is not relevant.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;
This is not relevant.
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
The wife’s role at home and with the children has allowed the husband to maintain full-time employed positions.
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
The wife gave up paid employment outside the home for some years and since returning to it in 1997 has only had part-time work. It is likely that the marriage adversely affected her earning capacity. She was denied the opportunities that come with permanent employment including the building of skills and experience that can lead to better paid employment and the other benefits of employment such as leave and superannuation.
(l) the need to protect a party who wishes to continue that party's role as a parent;
The wife believes that her income earning capacity will continue to be adversely affected for a period of time. She wants to be available to A and the boys. It must be said that the parenting task will diminish over time. In three years, for example, there will only be W in school and he will be in Year 10.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
Apart from the children, the parties live alone.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
The husband pays the assessed child support.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
There is nothing further requiring attention under this provision.
(p) the terms of any financial agreement that is binding on the parties.
There was no binding agreement made between the parties.
Section 79(4)(f)
There are no relevant orders.
Section 79(4)(g)
There is a child support assessment and the husband is making the required payments.
Conclusion
Albeit based on their views of a particular finding on contributions, the wife argues for a 20% adjustment for the “other matters” referred to above and the husband argues that it should be 15%. The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are as follows. Favouring an adjustment to the wife there is:
Ø The wife’s health is compromised to an unknown extent;
Ø Subject to her rights to workers compensation, the wife’s earning capacity is less than that of the husband because of her health; her earning capacity is in any event less that that of the husband as it was the parties’ arrangement during the marriage that the wife was not in paid work away from the home for a period and thereafter that she had only part-time employment; the children are still all at school;
Ø Albeit that there is less than 6 years to go, the wife has the overwhelming proportion of the parenting role. She will receive a proper level of financial support but at this point it appears she will have little or no respite from day to day supervision;
Ø The adjustment based on contribution alone will favour the husband to the extent of about $300,000;
Favouring an adjustment to the husband there is:
Ø The wife is 9 years younger than the husband. Albeit that her earning capacity is less than his, she has the potential of many more years in the paid workforce;
Ø The husband has more of his assets tied up in superannuation than does the wife.
It is an agreed fact that there should be an adjustment to the wife by virtue of the other matters in section 79(4). It is not possible or appropriate to fully compensate the wife for the differences in the parties’ assets or earning capacities. I should have regard to the dollar impact of an adjustment, not just to the percentages. In this case the factors favouring an adjustment to the wife are very significant. I will make an adjustment to the wife of 12.5%. In the context of this case that makes a difference between the parties of the order of $250,000.
Just and Equitable
Based on their contributions and the other matters in s 79 the appropriate division of property is 52.5% to the husband and 47.5% to the wife. I must consider whether it would be just and equitable within the context of s 79 if the net assets of the parties were divided in those proportions.
The net assets have a value of $999,327.77. The outcome of that division would be that the husband receive about $524,647 and the wife about $474,681.
That would leave the husband with the benefit of:
Assets Value 330 IAG shares (formerly NRMA) (at $3.57 each as at 12.2.08) (H) $1,178.10 Husband’s 180 Qantas shares (at $4.62 each as at 12.2.08) $831.60 Husband’s Toyota Corolla $3,000.00 Husband’s savings at Qantas Credit Union (Financial Statement sworn 7.11.07) $2,200.00 Household contents in husband’s possession $1,000.00 Husband’s Qantas Superannuation $88,915.15 Total $97,124.85
In order to bring him to 50% he would need to receive a further $427,522 from the remaining net assets. He will owe his legal fees and any other personal debts.
The wife has or will under the parties proposals have, the benefit of:
Assets Value Wife’s savings at Westpac Bank, estimate (Financial Statement sworn 27.11.07) $285.00 Wife’s savings at St. George Bank, estimate (Financial Statement sworn 27.11.07) $15.00 Holden Acclaim motor vehicle (W) $11,000.00 Daewoo Nubira motor vehicle (W) $4,000.00 Household contents at former matrimonial home $16,000.00 Wife’s First State Super $41,540.92 Total $72,840.92
In order to bring her to 47.5% she would need to receive a further $401,840 from the remaining net assets. She would owe her legal fees for these proceedings and any other personal debts.
Conclusion under Section 79
The effect of the orders will be the sale of the L property and division of the net proceeds between the husband and wife, after the payment of the costs of sale, and of discharging the mortgage, in a proportion that reflects the approximate ratio 427,522: 401,840. I will round out that ratio to 51.5% to the husband and 48.5% to the wife. By dealing with that division in terms of percentage the parties will share the benefit or detriment of any difference between the ultimate net sale proceeds and the value arrived at for the purposes of these proceedings.
As to the personalty, it is agreed that the wife will provide the husband with the piano and the husband’s tools and fishing rods. It is also agreed that the aeroplane tyre which I understand to be the nose tyre of a Boeing 767 aircraft, will become the property of D. Ownership of the tyre will pass to the husband who will transfer the tyre immediately, to the child. The arrangement for the tyre was expressly sought by the husband and the wife agrees that the tyre should ultimately pass to D. The parties will otherwise retain what they have. In my view the outcome I have foreshadowed would be just and equitable pursuant to s 79.
The orders are in similar terms to those proposed on behalf of the parties but they are at liberty to relist the matter in relation to the drafting of the orders and any other machinery issues within 14 days.
I certify that the preceding one husband and twenty one (121) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.
Associate:
Date: 19 February 2008
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