Hewson and Hewson
[2009] FamCA 80
•13 February 2009
FAMILY COURT OF AUSTRALIA
| HEWSON & HEWSON | [2009] FamCA 80 |
| FAMILY LAW – PROPERTY – Settlement in relation to marriage – Inheritance |
| Family Law Act 1975 (Cth) ss 75(2), 79 |
| Briese and Briese (1986) FLC 91-713 Oriolo and Oriolo (1985) FLC 91-653 Black and Kellner (1992) FLC 92-287 Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335 Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355 Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414 Clauson and Clauson (1995) FLC 92-595; 18 Fam LR 693 Bonnici and Bonnici (1992) FLC 92-0272 Wall and Wall (2002) FLC 93-110 Burke and Burke (1993) FLC 92-356 Farmer and Bramley (2000) FLC 93-060 |
| APPLICANT: | Mr Hewson |
| RESPONDENT: | Ms Hewson |
| FILE NUMBER: | SYC | 1716 | of | 2007 |
| DATE DELIVERED: | 13 February 2009 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Johnston JR |
| HEARING DATE: | 16 & 17 October 2008 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | In person |
| COUNSEL FOR THE RESPONDENT: | Mr Millar |
| SOLICITOR FOR THE RESPONDENT: | Leanne White Solicitor |
Orders
That the husband and the wife forthwith do all things and sign all documents necessary to place the former matrimonial home at L, New South Wales on the market and to sell it and for this purpose:
(a)The parties will immediately list the matrimonial home for sale by private treaty with such agent as the parties agree to appoint and in default of agreement about the agent within 14 days after this order comes into effect, with such agent as the President of the Real Estate Institute of New South Wales appoints, the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;
(b)The parties will list the matrimonial home for sale at the price of $360 000 or such other sum as may be agreed upon by the parties;
(c)The parties will each cooperate in every way with the agent including but not limited to:
(i)Making the key available to the agent;
(ii)Allowing inspection of the matrimonial home at all reasonable times requested by the agent;
(iii)Doing or saying nothing to hinder or prevent a sale being effected;
(iv)Ensuring that the matrimonial home including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers; and
(v)Signing all documents requested by the agent in relation to the listing for sale of the matrimonial home except a contract or agreement for sale which has not been authorised by the parties’ solicitors
(d)The parties will each execute a contract for sale in the form prepared by the solicitors having the conduct of the sale at a price agreed upon by the parties or, in the absence of any agreement, at or above the price nominated by the agent pursuant to paragraph (b);
(e)The wife’s solicitor will have the primary conduct of the sale on behalf of both parties;
(f)Neither party may confer on any agent without the consent of the other party any right to any sole or exclusive agency in respect of the matrimonial home or to any commission;
(g)The party not in possession will be entitled upon reasonable notice once per fortnight to enter and view the state of repair of the matrimonial home;
(h)In the event that the matrimonial home remains unsold for a period of 6 months from the date upon which it was first listed for sale, the parties will list the matrimonial home for sale by public auction with such agent as the parties agree to appoint and in default of agreement about the agent, with such agent as the President of the Real Estate Institute of New South Wales appoints, the costs of and incidental to such appointment to be borne equally by the parties;
(i)The reserve price for the purpose of such auction will be such as the parties agree upon or failing agreement will be the price nominated as a fair market value by a licensed valuer appointed by the President of the Australian Institute of Valuers. The costs of such valuation will be borne by the husband and wife equally;
(j)In the event that the bidding at the auction does not reach the reserve price the parties may negotiate with the highest bidders or any other interested person and effect a sale of the matrimonial home at a price which is not more than 10% below the reserve price;
(k)If the matrimonial home remains unsold, the parties will do all things and sign all documents necessary to immediately relist the matrimonial home for sale by public auction again, on a date nominated by the agent and at such auction there will be no reserve price.
That on settlement of the sale of the matrimonial home the proceeds of sale be paid in the following manner and priority:
(a)All costs and expenses of sale including legal costs and disbursements, agent’s commission, valuer’s fees and auction expenses (including repayment of any such expenses as have been paid by either or both of the parties to clean and present the property for sale);
(b)The amounts required to pay all municipal and water rates outstanding with respect to the matrimonial home;
(c)The balance then remaining to be paid 73.29 percent thereof to the husband and 26.71 percent thereof to the wife.
That apart from as provided in these orders each party be solely entitled to the exclusion of the other to all items currently in their respective possession or names including but not limited to bank accounts, furniture, furnishings, motor vehicles and any other investments.
That the above orders not commence operation until 4 March 2009.
That both parties have leave to re-list these proceedings in relation to the form of the orders only, including in the case of the husband for an order to permit him to purchase the wife’s interest in the former matrimonial home for $90 814, at any time until 3 March 2009.
That all exhibits be released.
IT IS NOTED that publication of this judgment under the pseudonym Hewson & Hewson is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 1716 of 2007
| MR HEWSON |
Applicant
And
| MS HEWSON |
Respondent
REASONS FOR JUDGMENT
Introduction and applications
These are contested property proceedings. The applicant is Mr Hewson and the respondent is Ms Hewson. For convenience I shall refer to them respectively as “the husband” and “the wife”.
The husband seeks orders to the effect that he would enjoy property with a value of 35 percent of the value of all of the available property of both parties. This would include all of the property which was inherited by the wife after the parties separated to which I shall refer below.
On the other hand the wife seeks orders to the effect that the former matrimonial home at L be sold and the net proceeds be paid in the proportions of 65.4 percent thereof to the husband and the balance to the wife. The wife also seeks an order that otherwise each party be solely entitled to the property in their possession and/or control respectively.
Background
The husband was born in June 1949. The wife was born in July 1953. Accordingly, they are aged 59 years and 55 years respectively. They married in May 1980 and separated in May 2006. There are 3 children of the marriage now all adults.
At the commencement of marriage neither party had any assets of significant value. The husband was working as State Manager of a company. The wife was also working.
In approximately mid-1980 the parties purchased a property at B, New South Wales for $63 000. This purchase was funded by a loan of $10 000 from the wife’s father at 10 percent interest and a private loan through a solicitor for $50 000.
In approximately 1983, the parties and children moved in to live with the wife’s parents to enable their B property to be sold. This property was sold for $85 000.
The parties then purchased the property at L for $68 000. This was funded using their available funds including the $10 000 loaned by the wife’s father and they borrowed $40 000 on mortgage.
In 1987 the wife’s parents gave the parties $10 000 which they paid towards reducing the outstanding mortgage balance.
In 1987 the husband’s father died and the husband inherited approximately $24 000. The husband said that he repaid the wife’s father the $10 000 the parties owed him and spent the balance on household expenses. I shall refer to this matter again below. It appears that the husband used at least $15 000 of his inheritance to reduce the outstanding mortgage balance.
In 1988 the wife worked part time at a day care centre for approximately 6 months.
In 1998 the husband worked a second job for approximately 6 months delivering take away food during the evenings.
In December 2005 the wife’s mother purchased a Hyundai Getz motor vehicle for the wife at a cost of $18 000.
In April 2006, just prior to the parties’ separation, the Wife’s mother gave the husband $10 000 towards the purchase of a Triumph Tiger motorcycle which cost $17 000.
As indicated above, the parties separated in May 2006. On 16 May 2006 the wife left the former matrimonial home and commenced living with her mother at F, New South Wales. Within a few days the husband resigned from his employment.
The parties had a joint line of credit with a limit of $60 084. It had a credit balance of $4674.88 at the time of separation. Shortly after separation the wife arranged for the line of credit to be closed. The $4674.88 credit balance was transferred to the Access Visa Account and the husband has had the benefit of this amount.
On 24 June 2006 the husband commenced to travel around Australia on his motorcycle. The husband had withdrawn the entirety of his superannuation benefit which was $52 618.
In October 2006 the wife’s mother died.
In July 2006 the parties had reached an agreement that the former matrimonial home would be sold. The wife was to arrange for the sale because the husband would be away on his motorcycling holiday. But as things turned out, the home was not sold.
In November 2006 the husband returned from his motorcycle travelling holiday. He subsequently resumed residing in the former matrimonial home and continues to live there.
In April 2007 probate of the wife’s mother’s will was granted to the wife and to her brother.
In July 2007 the home previously owned by the wife’s mother at F was transferred to the wife as part of her inheritance. The wife continues to live in this property. The wife subsequently received property and cash with a significant value pursuant to her mother’s will.
Contributions by wife’s parents
There was an issue about the circumstances of loans and gifts to the parties by the wife’s parents.
It is common ground that the wife’s father loaned the parties $10 000 to assist them in the purchase of their B home in 1980. There is no issue that they were to pay 10 percent interest on this and that they did so.
The husband said that he repaid this loan from the inheritance he received from his father’s estate in 1987.
The wife said that her father forgave this loan in approximately 1987 and that her parents gave the parties an additional $10 000. The husband was unsure about whether the wife’s father made a further $10 000 available to the parties.
I must say I prefer the wife’s version of this to that of the husband. The wife tendered a letter from her father dated 14 September 1987. This was to the effect that the wife’s father acknowledged the $10 000 loan, expressed his admiration for the parties having paid him the interest on this and forgave the loan. The wife’s father said that he proposed taking similar action with regard to monies owed to him by the wife’s brothers. The letter went on to say as follows:
I also send with this letter by way of gift my cheque for ten thousand dollars. I am confident that it would be of greater use to you at this time rather than to wait until the end of my life span. You will of course use this as your think fit, I would however suggest that it might be of the greatest ultimate benefit if you pay it off your home mortgage, again I say that is a matter entirely for your and [the husband’s] decision.
It is common ground that the parties repaid $24 000 or $25 000 off the mortgage. The husband suggested to the wife in cross-examination that if her parents had given the parties an additional $10 000 then they would have paid approximately $34 000 off the mortgage. The wife responded that they had purchased a fridge, some other things for the house and probably repaid some debt. The wife also said that the husband objected to her father giving them another $10 000 because the husband did not want the wife’s father to do this at the time that the husband’s father died.
In my view the wife’s evidence in relation to this matter was more persuasive than that of the husband and I accept it.
Alleged failure by wife to disclose assets
The husband alleged that the wife did not make a full and frank disclosure of her financial circumstances. There were several criticisms directed by the husband to the wife in this regard. Firstly, the husband suggested to the wife that on 13 February 2007 her solicitor had informed his solicitor that the wife’s mother’s estate had a value of $2.2M whereas in fact it had been valued for the purposes of probate at $2.569M. The wife said that she understood that capital gains tax would have to be paid in respect of shares and that the $2.2M was an estimate of the net value of the estate after allowing for capital gains tax and legal costs. The wife said that, subsequently, it became clear that capital gains tax would not be payable at the time because the shares were rolled over into superannuation.
The wife also said that household furniture, some china and paintings were not included in the probate schedule of property because of an oversight. She said that her mother had indicated that her brother was to inherit the paintings and that the wife was to inherit her mother’s china and jewellery. The jewellery was declared for probate purposes but at a low value because the wife did not know its value.
In her financial statement sworn on 3 April 2007 the wife estimated her interest in the estate to have a value of $700 000. The wife said that this was an estimate. The wife did not provide a separate estimate of the value of the jewellery.
It is true that the wife understated the value of her inheritance in her financial statement sworn on 3 April 2007. But she has explained how she arrived at the estimate of $700 000 although this still appears to be an underestimate even taking account of her explanation.
But an aspect of this alleged non-disclosure by the wife which was the subject of even stronger submission by the husband is as follows.
The wife’s inheritance included numerous cash payments. It is the total of such cash payments which is in issue.
A Mr N, who had been the wife’s mother’s financial planner, prepared a schedule of estate assets on 26 April 2007 apparently for the purposes of a conference to be held the following week. This schedule included an amount of $62 255 as cash to be distributed to the wife. The schedule showed a total of all property to be distributed to the wife as having a value of $897 204.
The solicitors for the estate, Moores Legal, wrote to the wife’s solicitor on 3 June 2008 specifically setting out the cash payments made by the estate to the wife. This letter also included a copy of Mr N’s schedule referred to above. Unfortunately, the solicitors’ letter made reference to the $62 255 cash distribution referred to in the schedule and said:
The cash of $62 255.00 was an amount which was then able to be calculated and in fact, [the wife] has received an additional $67 886.25.
The husband has interpreted this as being evidence that the wife has received cash payments of $67 886.25 in addition to the cash payments set out in the schedule of $62 255.
The husband went on to suggest to the wife during cross-examination that in fact the wife received cash of $67 886.25 in addition to the items of property in Mr N’s schedule valued at $897 204.
With respect to the husband, I am comfortably satisfied that what he suggested in this regard is just not correct. In my view, the explanation for this confusion on the part of the husband lies in the fact that the schedule was prepared setting out items of property (including estimates of value) as at 26 April 2007 whereas the Moores Legal letter was dated more than a year later namely 3 June 2008. What appears to have happened is that some of the shares had been converted to cash by the time all cash distributions had been made, namely by early 2008. So that in addition to the cash of $62 255 referred to in the schedule of 26 April 2007, by the time the letter dated 3 June 2008 was prepared, the nature of some of the property referred to in the schedule had changed and in fact had been paid out in cash payments totalling $67 886.25.
I am not persuaded that there has been any non-disclosure by the wife to the effect that she has received payments amounting to $67 886.25 in addition to the other property comprising her inheritance.
Clearly parties to financial proceedings under the Family Law Act 1975 have a duty to disclose details about their financial circumstances. This is fundamental to the determination of what is a just and equitable order. The principle is set out in the following passage in the case of Briese and Briese (1986) FLC 91-713 per Smithers J:
… I believe that the conclusion in the House of Lords in the case of Livesey v. Jenkins (1985) 1 All E.R. 106 is apposite, namely that in financial proceedings between spouses each party must make a full and frank disclosure of all material facts. In that case it was made clear that full and frank disclosure was required as a matter of principle in the light of the fact that it was the duty of the Court, taking into account a number of designated criteria, to make a decision which basically involved the exercise of a discretion. This is quite different from common law litigation between strangers, in which such a general duty does not exist, and obligations would only exist in so far as statute or court rules required.
In my view it is fundamental to the whole operation of the Family law Act in financial cases, that there is an obligation of the nature to which I have referred. …
This passage has been affirmed by this Court on numerous occasions including in the well-known Full Court cases of Oriolo and Oriolo (1985) FLC 91-653 at page 80,256 and Black and Kellner (1992) FLC 92-287 at page 79,133.
There is some accuracy in the husband’s criticism that the wife did not make a proper disclosure by her underestimating the value of her interest in her mother’s estate in her financial statement sworn on 3 April 2007. But in my view this shortcoming is more technical than substantial. She has given the explanation referred to above. But in any event, by the end of the same month the schedule had been prepared and within a short time the parties were having negotiations based on a much higher valuation of the wife’s inheritance than the $700 000 estimate in the April financial statement. By October 2007 the wife estimated in her then financial statement that apart from her interest in the former matrimonial home, her motor vehicle and household contents, she had property and superannuation with an estimated value of $729 729 and an expectation of receiving further estate property with a value of $115 006, a total of $844 735. This is not non-disclosure in the sense of the principle in the cases to which I have referred.
The Applicable Law
Sub-section 79(1) of the Act provides that in property settlement proceedings, the Court may make such order as it considers appropriate.
Sub-section 79(2) provides that the Court shall not make an order under the above sub-sections unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
It is well settled that there is a preferred approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. Firstly, the Court should make findings about the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.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. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), 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. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.
This approach has been confirmed in numerous cases in this Court including for example Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355; Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414 and Clauson and Clauson (1995) FLC 92-595; 18 Fam LR 693.
Property available for division
Most items of available property and the value of such items were agreed. But there were some areas in dispute.
One of these was the submission by the wife to the effect that the sum of $52 618 should be added back to the pool of available property being superannuation monies spent by the husband since separation.
As indicated above, the husband withdrew his superannuation shortly after the parties separated. He has spent these funds largely on the costs of his around Australia holiday and on living expenses since his return although some of the money was also spent on legal costs.
It was submitted by the husband that the wife should not be entitled to any part of his superannuation because he felt compelled to use these funds because the wife had closed the parties’ joint line of credit and therefore he no longer had a source of funds to finance his personal expenditure other than the superannuation.
I am afraid that I accept this submission only in part. In my view, there can be no doubt that the husband’s superannuation was a valuable asset of both parties to the marriage. This Court has long taken the view that the loss of the right to share in the benefits of superannuation is an important financial consequence of divorce. In this regard see the decision of the Full Court of this Court in the case of Bailey and Bailey (1978) FLC 90-424 at page 77,145.
In the present case the husband has enjoyed the whole of the superannuation and the wife has not been able to share in this asset because of the action taken by the husband. Is there a case for allowing part or all of the superannuation to be regarded as having been reasonably directed to the husband’s support? There is no objective reason for the husband not having been able to continue to work at the time that he resigned. He says that he was shocked and depressed by the wife’s decision to end the marriage and therefore he decided that he would leave his employment. But he has not put any evidence in admissible form before the Court upon which a finding could be made that he did not have appropriate capacity for employment. But he endeavoured to obtain employment after he returned by registering with Centrelink and with Job Network. He was unsuccessful. In these circumstances, and given his history of having been able to maintain continuity of employment during the marriage, at least in the broad sense, in my view he acted unreasonably in simply deciding not to continue to work and to withdraw the whole of his superannuation and use it for his own purposes. But I must say I have serious doubts about his capacity for employment particularly from the beginning of 2007 onwards. Accordingly, I propose to allow him the use of a modest part of the superannuation for his support and to bring back into the pool of property available for division between the parties the sum of $40 000.
It was submitted on behalf of the wife that a global approach should be brought to identifying and dealing with the property which had its origins prior to separation but that the property which came to the wife as part of her inheritance should be the subject of separate consideration. It was submitted that this approach should be adopted because the inherited property only became the property of the wife after separation and in circumstances where the husband made no contribution to such property. It was submitted that such an approach would be consistent with the approach adopted by the Full Court of this Court in the cases of Bonnici and Bonnici (1992) FLC 92-272 and Wall and Wall (2002) FLC 93-110, and by Fogarty J in the case of Burke and Burke (1993) FLC 92-356.
On the other hand it was submitted by the husband that the Court should consider all available property including the property inherited by the wife after separation on a global basis.
It was submitted by the husband that as a matter of justice and equity the Court should adopt a global approach and that he should receive an amount which represented 35 percent of the total property available including that from the wife’s inheritance.
It was asserted by the husband that during the entirety of the marriage both he and the wife anticipated that one day they would have the benefit of a substantial inheritance from the wife’s parents. The husband said that financial and employment decisions were made during the marriage on the basis that financial assistance would ultimately come to the parties this way. The husband submitted that the anticipated inheritance was always regarded by the parties as a resource which would benefit both of them. The husband said that in these circumstances a just and equitable outcome would necessitate him receiving a substantial part of the inheritance.
The husband referred to the decision of the Full Court of this Court in the case of Farmer and Bramley (2000) FLC 93-060. In that case the Full Court was determining what orders to make where the only asset available for division between the parties was a $5M lottery win by the husband well after the parties separated. In particular the husband referred to the following part of the judgment of Kay J at page 87,949:
Clearly contributions made towards the acquisition of such an asset by one party and the lack of contributions made towards its acquisition by the other party may weigh heavily in the exercise of discretion. However it is quite wrong to say that contributions made under s 79(4)(a), (b) or (c) before an existing asset was acquired could have no bearing on the outcome of the proceedings.
The husband also referred to the following passages in Kay J’s judgment also at page 87,949:
… the Court’s task is to evaluate all of the contributions from the time of the commencement of the parties’ relationship until the time of the hearing and give such weight to such contributions as the Court thinks is appropriate in the circumstances.
…
There is nothing in the legislation that requires s 79(4)(a)(b) and (c) contributions to be measured only in terms of “what did either party contribute to the assets of which they are presently possessed?”.
In my view there are some real difficulties with the husband’s general submission in this regard. Even if he had placed before the Court evidence in admissible form to the effect of that which he asserts about an anticipation by the parties throughout the marriage of receiving an inheritance, which he has not, in my view nothing of substance could turn on this. This is because, as I informed the husband during the course of the proceedings, in my view, such an anticipation by the parties is irrelevant to the exercise which the Court has to undertake. As indicated above, the Court has to assess the contributions of the parties as referred to and to consider the relevant s 75(2) matters. If the parties had made certain contributions to property of the wife’s parents in anticipation of a bequest that might be a different matter.
I accept the submission by learned counsel for the wife that the Court should deal with the inherited and non-inherited property separately for the reasons provided by him. In my view, to adopt the global approached urged by the husband would involve a somewhat convoluted exercise which is unnecessary and inappropriate in the circumstances of this case. This is all the more so because in my view there will be sufficient property available in the non-inherited property to fulfil a just and equitable order.
On this basis the property and superannuation available for division between the parties is as follows:
Inherited property
$
1. F property
425,000
2. Macquarie Bank account
13,971
3. Superannuation
323,909
4. L White solicitor trust account
4,017
5. Jewellery
10,490
_____________
$777,387
Non-inherited property
$
1. Former matrimonial home at L
340,000
2. Wife’s ANZ Bank account
210
3. Wife’s Hyundai Getz motor vehicle
10,000
4. Wife’s household contents
10,000
5. Wife’s other personalty
1,000
6. Joint account at Greater Building Society
126
7. Husband’s ANZ Bank account
300
8. Husband’s Triumph motorcycle
10,000
9. Husband’s household contents
2,000
10. Husband’s AXA superannuation
1,500
11. Husband’s superannuation (add back)
40,000
_____________
$415,136
There are no liabilities.
Contributions to non-inherited property
Both parties have made direct financial contributions because each of them undertook paid employment during the marriage. But the husband has made the overwhelming financial contributions because he was the breadwinner for the family. The husband had continuity of employment throughout the marriage subject to some periods of unemployment between jobs. He worked as a sales representative for numerous companies over the period.
The wife did part-time casual paid work from approximately 1985 until 1989 for a publisher, a child care centre and for the Local Council.
Both parties have made significant contributions to the welfare of their family constituted by themselves and the children and as homemakers and parents. Both have undertaken cooking, shopping and domestic work. Both have been very much involved parents. But I am satisfied that the wife has done more of the parenting and the domestic work than the husband. This is the way the parties arranged their responsibilities.
I note that the husband painted the interior of the L home before the family commenced living there. I note also that one of the parties’ children required intensive speech therapy and that the wife took him to his appointments.
I note also that, after separation, the wife maintained the home and prepared it for sale during the husband’s absence on his motorcycling holiday including spending $3217 on repairs and maintenance.
Contributions have also been made by relatives on each side of the family as indicated above. The wife’s parents gifted the two payments of $10 000. The wife’s mother purchased whitegoods, furniture and other household items and gave these to the parties. The wife’s mother also gave the wife gifts of cash from time to time. As also indicated above, the wife’s mother purchased an $18 000 motor vehicle for the wife and she gave the husband $10 000 towards the cost of purchasing his Triumph motorcycle. In addition, the parties resided rent-free with the wife’s parents for six months early in their marriage.
On the other hand, the husband inherited $25 000 from his late father.
In my view, there has been a small imbalance in the contributions of the parties overall largely because of the greater contributions made by the wife’s parents which are regarded as coming in on the wife’s side of the ledger as it were.
I assess the contributions overall as having been 52 percent by the wife and 48 percent by the husband.
Contributions to inherited property
In my view, the husband has not made any contributions to the property inherited by the wife after separation.
s 75(2) matters
The husband is 59 years of age and he is in reasonable health. He has been unemployed since separation. His income consists of the Newstart allowance of $218 per week. He said that as the years went by he found it difficult to obtain employment in an industry in which employers tended to offer opportunity to younger applicants for vacant positions. I accept that there is some force in this. In my view, however, the husband is able-bodied and in reasonable economic times should have capacity for some sort of employment. Having said this, in my view, this would tend to be low paid employment and almost certainly part time. In the present global economic downturn, competition for any position within the skills and experience of the husband would be likely to be extremely keen. In the current circumstances I assess the husband’s prospects for employment to be poor.
On the other hand, as was submitted by learned counsel for the wife, her earning capacity has been adversely affected by the duration of the marriage. Primary responsibility for the care of the children has mostly precluded her participation in the paid workforce.
The wife is 55 years of age. She suffers from some difficulties in her health. Dr A reported that the wife takes medication for hypothyroidism, hypertension, sleep difficulty and other difficulties. She has had problems with her colon and bowel and she has suffered from depression.
In 2006 the wife endeavoured to study a course at TAFE in computer applications. But she found that she was unable to concentrate and discontinued the course.
In my view, the wife has no capacity to earn income.
The husband has had the benefit of occupancy of the former matrimonial home since December 2007. But on the other hand the wife inherited her mother’s home at F.
The most significant s 75(2) matter is the fact that the wife has inherited such a substantial amount of property. This has the effect of placing the parties in very disparate positions so far as their property is concerned on a contributions basis.
On the one hand, the wife has an inherited home in which to live and this has a value well beyond that of the former matrimonial home. She has inherited other property of substantial value which she can use to provide herself with an income.
The wife also has a reversionary interest in a trust for her brother under her mother’s will. If he was to predecease her she would receive half of the net income and capital of the funds held on trust for him as at the time of his death. The value of this trust was $841 355 as at July 2008. The wife’s brother is 60 years of age and, so far as the wife understands, does not suffer from any terminal illness.
On the other hand, on a contributions basis, the husband has slightly less than half the non-inherited property. This is modest and would probably be insufficient even to provide him with accommodation, let alone assist him in being able to provide for his other day to day needs.
In my view this vast difference between the parties calls for a substantial adjustment of the non-inherited property in order to achieve a just and equitable order. The husband asks the Court to adjust the parties’ interests in the former matrimonial home so that he would enjoy the entirety of the wife’s interest therein. But the effect of this would be to deny to the wife any of her non-inherited contributions-based property apart from her motor vehicle and some personalty of modest value. In my view, this would not be fair to the wife. In my view the appropriate adjustment would be 25 percent of the non-inherited property. This is at the higher end of the range of adjustments which the Court usually makes to take account of relevant s 75(2) matters but in my view it is appropriate in this case.
Conclusion and fourth step
The husband is to have 73 percent of the non-inherited property available for division between the parties. This is property with a value of $303 049 (73 percent of $415 136). The husband has the following property:
$ 1. One half of Greater Building Society joint account 63 2. ANZ Bank account 300 3. Triumph motorcycle 10,000 4. Household contents 2,000 5. AXA superannuation 1,500 6. Withdrawn Superannuation (add back) 40,000 _____________ $53,863
To achieve property with a value of $303 049 the husband requires further property to a value of $249 186 ($303 049 - $53 863 = $249 186). This can only come from the former matrimonial home.
On the other hand, the wife is to have 27 percent of the non-inherited property. This is property with a value of $112 087 (27 percent of $415 136). The wife has the following non-inherited property:
$ 1. ANZ Bank account 210 2. Hyundai Getz motor vehicle 10,000 3. Household contents 10,000 4. Other personalty 1,000 5. One half of Greater Building Society joint account 63 _____________ $21,273
To achieve property with a value of $112 087 the wife requires further property with a value of $90 814 ($112 087 - $21 273 = $90 814).
The former matrimonial home has an agreed value for the purposes of these proceedings of $340 000. The husband is to have an interest to the value of $249 186 in this property. This is 73.29 percent thereof. On the other hand, the wife is to have an interest in this to the value of $90 814. This is 26.71 percent thereof.
Overall result
The result overall will be that the husband will have property with a value of $303 049. But $40 000 representing his superannuation has been spent. So the husband will have $263 049 in available property.
The wife will have property with a value of $889 474. But of this, $777 387 represents the value of the wife’s inherited property. As indicated above, this is the reason for the substantial disparity in their property.
The husband has not indicated whether he might like the opportunity to purchase the wife’s interest in the home. If he wanted such an opportunity he would have to pay the wife $90 814.
Otherwise, the former matrimonial home will have to be sold and the net proceeds after paying costs of sale including legal costs thereof be paid to the parties in the proportions of 73.29 percent to the husband and 26.71 percent to the wife.
I propose to make orders for sale of the home and to suspend the commencement of the orders for a short period to enable the husband to bring the matter back to Court if there is some way for him to raise $90 814 to pay the wife for her interest in the home.
I certify that the preceding ninety-five (95) paragraphs are a true copy of the reasons for judgment of Judicial Registrar W P Johnston.
Associate:
Date: 13 February 2009
Key Legal Topics
Areas of Law
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Family Law
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Property Law
Legal Concepts
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Remedies
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Costs
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Injunction
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Offer and Acceptance
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