Hicks and Hicks
[2016] FCCA 31
•18 May 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HICKS & HICKS | [2016] FCCA 31 |
| Catchwords: FAMILY LAW – Property – long marriage – parties purchased wife’s residence following a long separation – whether it would be just and equitable to make orders – financial disclosure – contributions – future needs and obligations. |
| Legislation: Family Law Act 1975, ss.79, 80, 81 |
| Cases cited: Stanford v Stanford [2012] HCA 52 |
| Applicant: | MR HICKS |
| Respondent: | MS HICKS |
| File Number: | BRC 8462 of 2012 |
| Judgment of: | Judge Monahan |
| Hearing dates: | 28-29 May 2015, 2 June 2015 |
| Date of Last Submission: | 2 June 2015 |
| Delivered at: | Sydney |
| Delivered on: | 18 May 2016 |
REPRESENTATION
| Solicitors for the Applicant: | Family Legal |
| Counsel for the Respondent: | Ms Winfield |
| Solicitors for the Respondent: | Change Legal |
ORDERS
Within 42 days, the Respondent wife pay to the Applicant husband the sum of $30,000.00 with interest to accrue thereafter as prescribed by the Rules (“the Sum”).
In default of payment of the Sum within 90 days from the date of these Orders, the Respondent wife (and the Applicant husband if required) forthwith do all acts and things and execute all documents necessary to sell the property situated at Property O, New South Wales, being the land contained in Folio Identifier ID (omitted) (“the property”) as agreed or, failing agreement as to the sale process (including the appointment of a real estate agent and conveyancing solicitor) within a further 14 days the parties forthwith do all acts and things to cause where applicable:
(a)the President of the Real Estate Institute of New South Wales or his or her nominee to nominate an agent who will then determine the method and terms of sale, including the sale price; and/or
(b)the President of the Law Society of NSW or his or her nominee to nominate a solicitor who will have the carriage of sale; and
(c)the parties forthwith jointly instruct the relevant real estate agent and/or conveyancing solicitor;
AND at the settlement of the sale of the property, the proceeds be distributed in the following order and priority:
(d)in payment of the real estate agent’s commission, conveyancing costs and other reasonable costs of sale (including any fees arising from paragraphs 2(a) and (b) herein);
(e)in payment of the Sum to the Applicant husband; and
(f)in payment of the remainder to the Respondent wife.
Until the sale of the property pursuant to paragraph 2 herein, the Respondent wife continue to pay, as they fall due, all regular instalments in respect of the mortgage, council rates, water rates and strata levies in respect of the property, and pay forthwith any arrears owing in respect of the mortgage.
Unless otherwise specified in these Orders:
(a)each party be solely entitled to all chattels, goods, motor vehicles, furniture, furnishings and any other property in the possession of such party as at this date;
(b)each party be solely entitled to any moneys which stand in such party’s name as at this date; and
(c)each party be solely liable for and indemnify the other against any debt, loan or liability whatsoever held in such party’s name as at this date.
Each party do all such things including the signing of all documents to give effect to these Orders.
In the event that either party refuses or neglects to execute any deed or instrument that may be required to give effect to these Orders, a Registrar of the Court be appointed pursuant to s.106A of the Family Law Act 1975 to execute such deed or instrument in the name of such party or parties and do all acts necessary to give validity to the operation to the deed or instrument.
There be no order as to costs.
All extant applications before this Court be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Hicks & Hicks is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 8462 of 2012
| MR HICKS |
Applicant
And
| MS HICKS |
Respondent
REASONS FOR JUDGMENT
Introduction
This is a property application by MR HICKS (“the husband”) against MS HICKS (“the wife”).
The parties are in dispute in relation to a number of issues including what property forms the assets of the marriage and what orders should be made for a just and equitable division of the parties’ property.
The details of the orders sought by each party are extracted below. Only the parties ultimately gave evidence in support of their case.
At the final hearing both parties were legally represented; the husband was represented by his solicitor, Mr Griffiths and the wife by Ms Winfield of Counsel.
The Court acknowledges the delay to the parties in the timely delivery of this decision. The delay is attributable to the Court’s need to prioritise other Court business, in particular an increased intake of new matters in circumstances where there has been a shortage in judicial resources.
Unless otherwise stated, any statutory references in these reasons will be to the Family Law Act 1975 (“the Act”).
Background
Relationship history
The husband was born on (omitted) 1948 and is currently 67 years of age. The wife was born on (omitted) 1949 and is currently 66 years of age.
The parties were married on (omitted) 1972. They have two children together, X and Y, who are both in their thirties.
The parties separated on a final basis in 1994 and were divorced on 20 February 2013.
The parties bought and sold three properties prior to separation. In addition, they purchased a unit at Property O (“the Property O property”) in March 2002.
The husband subsequently married Ms S. The husband and Ms S are joint tenants in a property at Property T, Queensland (“the Property T property”). The wife is not in a relationship.
Procedural history
These proceedings were commenced by the husband on 9 April 2013 when he filed his Initiating Application. The wife filed her Response on 31 May 2013.
The matter first came before me on 6 February 2014. On that date I made orders by consent for financial disclosure, the exchange of market appraisals for the Property O property and for the parties to attend a Conciliation Conference.
On 14 July 2014 I adjourned the matter to a date to be fixed, with the husband not in attendance and noting that the matter was not resolved at the Conciliation Conference.
On 4 September 2014 the matter was set down for final hearing for not more than two days to commence on 28 May 2015. On 23 March 2015 I made trial directions and noted that there was no appearance by the wife at this mention hearing.
The final hearing commenced on 28 May 2015, which was used by the parties to negotiate in an attempt to reach final consent orders. Negotiations continued on 29 May 2015, at which point the husband made an application to have the matter adjourned, which was refused for the reasons given in Court that day. The final hearing continued on 29 May 2015, and further continued on 2 June 2015, at which point the hearing concluded and judgment was reserved.
Legislative requirements
Property proceedings between parties to a marriage are governed by the provisions of Part VIII of the Act, and more specifically, s.79.
Section 79
Section 79(1) of the Act states that the Court may make such orders as it considers appropriate altering the interests of the parties in the property.
Section 79(2) of the Act provides that:
“The Court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.”
If the Court is satisfied that it is just and equitable to make an order altering the interests of the parties in the property, s.79(4) of the Act sets out those matters which the Court must take into account when considering what orders should be made. Section 79(4) provides:
“In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)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.”
Section 79(4)(e) requires the Court to have regard to the following matters set out in s.75(2) of the Act:
“The matters to be so taken into account are:
(a)the age and state of health of each of the parties; and
(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; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) 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; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(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; and
(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; and
(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; and
(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; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(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
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.”
Approach to exercise of discretion
The approach to the exercise of the Court’s discretion has been outlined in numerous judicial decisions. The High Court in the decision of Stanford v Stanford [2012] HCA 52 (“Stanford”) held that before making any orders adjusting the parties’ interests in the property pursuant to s.79 of the Act, the Court must, as required by s.79(2) of the Act, determine that is “just and equitable” for the Court to do so. At [42] the High Court stated that in most cases:
“The just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).”
Prior to the decision in Stanford, the preferred approach in determining property matters was that set out by the of the Full Court of the Family Court of Australia (“Full Court”) in the matter of Hickey v Hickey [2003] FamCA 395; (2003) 30 Fam LR 355; (2003) FLC 93-143. At [39] Nicholson CJ, Ellis and O’Ryan JJ stated:
“The case law reveals 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 as to 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 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. 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 was reconsidered by the Full Court in Bevan v Bevan [2013] FamCAFC 116; (2013) FLC 93-545 (“Bevan”) in light of the High Court’s comments in Stanford. At [71], Bryan CJ and Thackray J stated:
“71. Stanford will also serve as a reminder that the four step process “merely illuminates the path to the ultimate result”. Any future restatement of that process should incorporate acceptance of the fact that the power to make any order adjusting property interests is conditioned upon the court finding that it is just and equitable to make an order.”
In Bevan & Bevan (No.2) [2014] FamCAFC 19; (2014) FLC 93-572 the Full Court, having upheld the appeal against the decision at first instance, proceeded to re-determine the property application before the Court. At [18] to [19], Bryant CJ and Thackray J stated:
“18. Senior counsel for the husband structured his submissions by reference to the “four-step” approach to property settlement applications discussed in our earlier reasons. By way of explanation for doing so, senior counsel said:
16. The adoption of the above [four-step] approach is not intended to presuppose a positive answer to the question posed [by] section 79(2), nor to suggest that it is an approach appropriate in all proceedings. Rather, and provided that the fundamental propositions outlined by the High Court in Stanford (2012) … are not obscured, such approach is intended to and does no more than provide a principled, disciplined and structured means by which all of the matters arising for consideration pursuant to section 79 can be conveniently and properly identified and assessed.
17. Further, and whilst not said critically nor in a matter which seeks to cavil with the decision in this appeal, no other approach to the determination emerges readily from either Stanford nor the decision in this appeal. It is respectfully submitted that provided that the ‘fundamental propositions’ articulated in Stanford are not obscured, and whilst not universally so as has always been recognised, the approach set out above continues to provide a proper, transparent, certain and structured approach to the presentation and determination of applications pursuant to section 79.
19. We have no issue with what senior counsel has said about the utility of the four-step process, which we accept provides a convenient way to structure both submissions and judgments, provided the caveat mentioned is not overlooked.”
The “caveat” referred to by the Full Court is the requirement that the Court must first be satisfied that it is just and equitable to make an order adjusting property between the parties.
In the subsequent decision in Rockman & Rockman [2014] FCCA 1966 (“Rockman”), Judge Bender noted at [83] that the “High Court in Stanford neither disapproved or approved the four steps process”. I agree with Her Honour’s observation. That said, the High Court did lay down what they described as three “fundamental propositions” which would provide useful guidance to trial judges when undertaking the task under s.79 of the Act. I note that in Bevan, Bryant CJ and Thackray J summarised those fundamental principles at [73] as follows:
“1.Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
2.The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;
3.A determination that a party has a right to a division of property fixed by reference only to the matters of s 79(4), and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.”
I also agree with the view expressed in Rockman that subsequent Full Court and single judge considerations of Stanford suggest that the path that may best “illuminate the path to the ultimate result” could now best be described as the following “five step process”:
“(a)firstly, what is the parties’ legal and equitable interests in property;
(b)secondly, is it just and equitable to make an order adjusting the parties legal and equitable interests in that property;
If the answer to (b) is in the affirmative:
(c)thirdly, identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) of the Act and determine the contribution-based entitlements of each party as a percentage of the net value of the property of the parties;
(d)fourthly, identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g) and s.75(2) of the Act and determine the adjustment, if any, that should be made to the contribution-based entitlements of each party as a percentage of the property of the parties; and
(e)fifthly, given s.79(1) empowers the court to make such orders affecting the parties’ interest in the property as are appropriate, determine what order, if any, altering the parties’ interests are “appropriate” to enable the parties’ entitlements as determined pursuant to steps (c) and (d) to be achieved.”[1]
[1] Rockman & Rockman [2014] FCCA 1966 at [84].
The Court will adopt this process for this decision.
Section 80
In addition to the specific powers provided by s.79(1) to adjust property interests, s.80(1) provides the Court with the following general powers:
“The court, in exercising its powers under this Part, may do any or all of the following:
(a)order payment of a lump sum, whether in one amount or by instalments;
(b)order payment of a weekly, monthly, yearly or other periodic sum;
(ba)order that a specified transfer or settlement of property be made by way of maintenance for a party to a marriage;
(c)order that payment of any sum ordered to be paid be wholly or partly secured in such manner as the court directs;
(d)order that any necessary deed or instrument be executed and that such documents of title be produced or such other things be done as are necessary to enable an order to be carried out effectively or to provide security for the due performance of an order;
(e)appoint or remove trustees;
(f)order that payments be made direct to a party to the marriage, to a trustee to be appointed or into court or to a public authority for the benefit of a party to the marriage;
(h)make a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order;
(i)impose terms and conditions;
(j)make an order by consent;
(k)make any other order (whether or not of the same nature as those mentioned in the preceding paragraphs of this section), which it thinks it is necessary to make to do justice; and
(l)subject to this Act and the applicable Rules of Court, make an order under this Part at any time before or after the making of a decree under another Part.”
Section 81
For completeness, I note that the Court must also consider s.81 of the Act which states:
“In proceedings under [Pt VIII], other than proceedings under section 78 or proceedings with respect to maintenance payable during the subsistence of a marriage the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.”
While s.81 of the Act is clearly relevant to the making of a property order, it is neither a ‘head of power’ nor an absolute requirement. This was the view of the Full Court in In the Marriage of Crapp and Crapp (No 2) (1979) 5 Fam LR 47; (1979) FLC 90-615:
“Firstly s 81 is in the nature of an exhortation by the legislature to the courts and is not a separate source of power and secondly the section itself states that the policy of making orders which finally determine the financial relationship between the parties and avoid further proceedings is only to be taken ‘as far as (is) practicable’. Nevertheless it is true to say that it is unsatisfactory in the general context of the philosophy of the Family Law Act for a really significant issue between parties who are divorced and have gone their separate ways to remain in suspended animation for a number of years.”[2]
[2] (1979) 5 Fam LR 47 at 61 (per Fogarty J; Pawley and Dovey JJ agreeing).
The practical effect of s.81 of the Act is that the Court must endeavour to make an order that finalises the financial relationship between the relevant spouses, but it does not require the Court to make an order that achieves finality. That said, for the comments previously made, and as far as it can be achieved, I see clear benefit in orders being made that will finalise the financial relationship between the parties to this case.
Proposals
Husband
The husband argues that the property pool should be limited to the Property O property. The husband argues that his contributions should be assessed at 40%, based on the agreed value of the property, less the current mortgage. This will entitle the husband to the monetary equivalent of $178,000.00, which the husband proposes the wife should pay to him. In the alternative, the husband proposes that the Property O property be sold and that he receive $178,000.00 from the proceeds of the sale. The husband did not specify if any adjustments should be made for s.75(2) and related factors and the Court has assumed that no further adjustments were sought.
The orders sought by the husband to achieve the outcome he seeks are as follows:
1.That the Respondent shall pay to the Applicant the sum of one hundred and seventy eight thousand dollars ($178,000.00).
2.That in default of payment by the Respondent in accordance with Order 2 herein within ninety (90) days of the date of these Orders:
a. The parties shall do all acts and things and sign all documents necessary to cause the property known as and situated at Property O, New South Wales, being the whole of the land comprised in Certificate of Title Folio Identifier (omitted) (“the property”) to be listed for sale by private treaty with a real estate agent as nominated by the Respondent;
b. The Solicitor acting on the sale of the property shall be as nominated by the Respondent;
c. In the event that the property has not sold by private treaty within a period of four (4) weeks of the date of the property being listed for sale (“the listing”) then each party shall, within five (5) weeks of the date of the listing, do all acts and things and sign all documents necessary to cause the property to be sold by public auction at the earliest possible date by an auctioneer as nominated by the Respondent;
d. In the event that the property is submitted to public auction, the reserve price shall be as nominated by the Respondent;
e. In the event that the property does not reach the reserve price at public auction, then the property shall be submitted to a subsequent public auction with no reserve price, and at a date and time as agreed between the parties, and failing agreement, at a date and time as elected by the appointed auctioneer, but otherwise no more than eight (8) weeks after the first public auction;
f. Each party be at liberty to attend each auction conducted with respect to the property;
g. Each of the parties shall cooperate at all times with the appointed real estate agent and auctioneer, including but not limited to:
i.Making the property available at all reasonable times; and
ii.Allowing for inspection of the property by prospective buyers at all reasonable times as may be required from time to time;
h. Upon completion of the sale of the property, the proceeds of the sale shall be applied in the following manner and priority:
i.In payment of all commissions, fees and expenses associated with the conduct of the sale;
ii.In payment of all legal expenses of acting on the sale and all disbursements and adjustments to complete the conveyance of the sale;
iii.In payment of all monies due and owing as required to discharge the mortgage and any other registered encumbrances;
iv.In payment of the sum of one hundred and seventy eight thousand dollars ($178,000.00) to the Applicant; and
v.The balance of the proceeds to the Respondent.
i. Prior to completion of the sale of the property, the Respondent shall remove all items that are not included in the sale and provide vacant possession; and
j. Upon the sale of the property, each party shall provide at settlement of the sale, a signed, registrable Withdrawal of Caveat with respect to any caveat that either party may have registered on the title.
3.That the Respondent shall pay all outgoings with respect to the property as and when they fall due, including but not limited to, mortgage payments, household insurance, council rates, and water rates, and the Respondent shall pay forthwith any arrears with respect to same.
4.That unless otherwise specified in these Orders, each party shall be solely entitled to the exclusion of the other to all other property, resources and chattels of whatsoever nature and kind in the possession of such party as at the date of these Orders, and that for such purpose, bank, building society or credit union accounts are deemed to be in possession of the person whose name appears on the records thereof, insurance policies are deemed to be in the possession of the beneficiary thereof, and superannuation entitlements are deemed to be in possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements.
5.That the Applicant be solely responsible for and indemnify the Respondent in respect of the following:
a.Any and all liabilities attaching to any assets to be retained by him pursuant to these Orders;
b.Any and all liabilities with respect to credit cards, store cards or bank, building society or credit union loans in his name alone.
6.That the Respondent be solely responsible for and indemnify the Applicant in respect of the following:
a.Any and all liabilities attaching to any assets to be retained by her pursuant to these Orders;
b.Any and all liabilities with ·respect to credit cards, store cards or bank, building society or credit union loans in her name alone.
7.That pursuant to section 106A of the Family Law Act 1975 (Cth), should either party refuse, neglect or otherwise fail to comply with a direction to execute any deed, document, instrument or writing to give effect to these Orders within fourteen (14) days of being called upon to do so, then a Registrar or Deputy Registrar of the Federal Circuit Court of Australia shall be empowered and is hereby empowered to execute any such deed, document, instrument or writing in the other party's name, and the Registrar or Deputy Registrar shall be empowered and is hereby empowered to do all acts and things necessary to give validity and operation to any such deed, document, instrument or writing.
Wife
The wife’s primary position is that the husband’s application should be dismissed. The wife argues that the parties rearranged their affairs following the payment of $30,000.00 to the husband in 2012 and that, in accordance with the High Court’s decision in Stanford, it would not be just and equitable for the Court to make any orders in relation to the parties’ property pool.
The wife’s alternate position is that any assessment of contributions and section 75(2) factors would favour the wife and would not entitle the husband to the orders he seeks. It would also not necessarily require the wife to make any payments to the husband, but if payment was ordered, that it should be less than $30,000.00.
The orders sought by the wife to achieve the outcome she seeks are as follows:
1.That the Application of the Applicant be dismissed.
2.That the Respondent pay to the Applicant the sum of thirty thousand dollars, such sum having already been paid to the Applicant by the Respondent on or about 16 October 2012.
3.That all assets including motor vehicles, superannuation entitlements, bank accounts, furnishings and effects currently in lawful ownership or possession of each of the parties shall remain the lawful property of that party and the other party shall relinquish all claims either of them may have against the other in respect of those assets. Each party shall indemnify the other in respect to any and all liabilities currently in the name of that party.
Issues
The following issues were ultimately in dispute at the final hearing:
·whether it is just and equitable that the Court make a property settlement order (the so-called ‘Stanford’ issue);
·whether the Property T property should be included in the property pool;
·the parties’ contributions made prior to and during the relationship;
·the parties’ contributions made following separation; and
·the parties’ respective future needs and obligations.
Evidence of the parties
Both parties provided the Court with affidavit and oral evidence and were cross-examined.
No other person was required for cross-examination at the final hearing.
A number of documents were tendered by each party in support of their case which have been considered as part of this decision.
Husband
The husband relied upon the following at the final hearing:
·Initiating Application filed 9 April 2013;
·the husband’s Affidavit sworn on 5 April 2013 and filed 9 April 2013;
·the husband’s Financial Statement sworn on 5 April 2013 and filed 9 April 2013; and
·the husband’s Financial Statement sworn and e-filed on 25 May 2015.
The husband also tendered the following documents:
·Correspondence between lawyers regarding disclosure dated May 2015 (“AH1”).
The husband presented as a confident, well-spoken and articulate witness who was generally clear about his recollection of past events. However, he was somewhat patronising when describing discussions between his new wife and the wife about money matters in 2012. The husband also recanted paragraph 14 of his affidavit filed 9 April 2013, and there were a number of issues and inconsistencies in his two financial statements.
Wife
The following documents were relied upon by the wife:
·Response filed on 31 May 2013;
·the wife’s affidavit sworn and filed on 14 May 2015;
·the affidavit of Mr R sworn 13 May 2015 and filed 20 May 2015; and
·the wife’s Financial Statement sworn and filed on 14 May 2015 (and filed again on 25 May 2015).
The wife also tendered the following documents:
·Correspondence between lawyers regarding disclosure dated October 2014, May 2015 and June 2015 (“RW1”);
·Relevant pages of the wife’s mother’s bank account (“RW2”);
·Documents produced under subpoena from (omitted) Bank (“RW3”);
·Documents produced under subpoena from (omitted) Bank (“RW4”);
·Further documents produced under subpoena from (omitted) Bank relating to the wife’s bank account (“RW5”);
·Document bundles of (omitted) Bank accounts for periods up to 28 March 2012 (“RW6”);
·(omitted) Bank document for periods 2 July 2013 to 1 May 2015 (“RW7”);
·Plan Lendor account statements for two accounts (last digits (omitted)) for periods 12 October 2012 to 31 December 2012 (“RW8”);
·Notices of Assessment for tax years ending 2011 and 2012 (“RW9”);
·Bundle of correspondence dated 5 March 2013 and 1 July 2015 (“RW10”);
·Email correspondence and annexures dated 18 June 2014, re-sent in May 2015 (“RW11”); and
·PAYG summary for tax year ending 2013 (“RW12”).
Overall, the wife presented as a quietly spoken and articulate witness who was capable of making some concessions to reasonable propositions. It became clear that the wife had provided all relevant bank statements and associated documents to her solicitors but it is difficult to determine whether those documents were received by the husband’s solicitors.
Discussion
The Court will now consider the parties’ proposals and submissions in light of the legislative requirements and the available evidence.
Identifying and valuing the parties’ property and interests
As stated, the Court must firstly ascertain what the parties’ property is. This requires the identification and valuation of the parties’ property, liabilities and financial resources. Generally speaking, the identification and valuation is at the date of the final hearing.[3] This will enable the Court to ascertain the net property pool.
[3] Warne & Warne (1982) 8 Fam LR 388 at 389 (per Simpson J; Strauss and Hase JJ agreeing); also see AJO & GRO (2005) 33 Fam LR 134 at 142 (per Holden, Warnick and Le Poer Trench JJ).
Joint balance sheet
The parties provided the following ‘joint balance sheet’.[4] I note that while the wife disagrees with the valuations attributed to the relevant real estate, she reluctantly accepted the market appraisals obtained by the husband in order for the final hearing to proceed.[5] Unless otherwise indicated*, the values of the following assets and liabilities are agreed:[6]
[4] In the table, ‘W’ refers to property registered in the wife’s name or otherwise legally owned by her or in her possession and ‘H’ refers to property registered in the husband’s name or otherwise legally owned by him or in his possession.
[5] Transcript, 2 June 2015, page 17.
[6] A number of changes were also made by each party orally during the course of final submissions.
No. Non-Superannuation Assets 1 Property O (W) $620,000.00 2 (omitted) Bank Account (W) $1,697.00
3 (omitted) Bank Account (W) $13.00 4 Mitsubishi (omitted) (W) $3,000.00
5* Household contents (W) NK (H)
$2,000.00 (W)6 Property T (joint tenancy – 50% interest) (H) $322,500.00
7 (omitted) Bank Account (H) $1,587.00
8 VW Tiguan (omitted) (H) $23,000.00
9 Household contents (jointly owned with Ms S) (H) $20,000.00
10* (omitted business) / (omitted business) (H) NIL (H)
Disputed (W)Sub-total $991,797.00 (H)
$993,797.00 (W)Add-backs 11* (omitted) Super (H) NIL (H)
$4,000.00 (W)12* (omitted) Super (H) NIL (H)
$10,000.00 (W)13 Transfer of H’s interest in Property O to W (H) $30,000.00
Sub-total $30,000.00 (H)
$44,000.00 (W)Superannuation 17* $48,000.00 paid to Property O Mortgage (W) NK (H)
$NIL (W)Sub-total $NK (H)
$NIL (W)Liabilities 13 Mortgage re Property O property (W) ($175,000.00)
14* Owing to W’s parents (W) Disputed (H)
($150,000.00) (W)15 Half mortgage – joint tenancy (H) ($198,000.00)
17* Income tax (H) ($2,435.00) (H)
NK (W)18* Unpaid income tax previous financial years (H) ($6,816.00) (H)
NK (W)19* Hire purchase for Tiguan (H) ($26,913.00) (H)
NK (W)Sub-total ($409,164.00) (H)
($523,000.00) (W)Total net assets $612,633.00 (H)
$514,797.00 (W)
Areas in dispute
To determine the net available property pool several matters require determination:
· Whether the husband’s interest in the Property T property should be included in the balance sheet;
· The value of the wife’s household contents;
· Whether the husband has an interest in (omitted business)/ (omitted business) franchise and if so, whether its value should be included;
· Whether the monies from the husband’s ‘(omitted)’ and ‘(omitted)’ superannuation policies should be ‘added back’ into the property pool (as sought by the wife);
· Whether the monies withdrawn from the wife’s superannuation fund and paid into the Property O mortgage should be ‘added back’ into the property pool (as sought by the husband);
· Whether $150,000.00 was received from the wife’s parents and if so, whether it was a ‘loan’ or a ‘gift’;
· Whether the husband’s current income tax owing and unpaid income tax from previous years, should be included as a liability; and
· Whether the loan owing for the VW Tiguan should be included as a liability.
Whether Property T property should be included in the balance sheet
The arguments advanced as to why the Property T property should not be included in the balance sheet are not entirely clear to the Court. The legal representative for the husband submitted that it was the husband’s position that he made no contributions to the purchase of the Property T property and that it has been funded purely from the business which is owned by Ms S.[7] However, no supporting documentation was provided to support this proposition. I note that the husband and Ms S are joint tenants of the Property T property.
[7] Transcript, 2 June 2015, page 46.
The husband asked the Court to limit the pool of assets to just the Property O property on the basis of that being the only relevant matrimonial property and for his contributions in relation to the property representing 40 per cent.[8] Again, however, the reasons for this were not elaborated upon.
[8] Transcript, 2 June 2015, page 48.
Overall, I am not persuaded by the husband’s argument. The value of the Property T property will be included in the balance sheet as a relevant asset.
Wife’s household contents
The wife asserts that the total value of her household contents is $2,000.00.
The husband does not admit this figure.
The wife failed to provide any documents to support this assertion (for example, any document relevant to home contents insurance). I note that in her Financial Statement e-filed on 14 May 2015 the wife did not include the relevant information as to property owned (ie. Part I). That said, that figure was inserted in Part I Item 42 of her Financial Statement filed 19 June 2014.
While the figure of $2,000.00 is arguably unrealistic in this modern age, no contradictory evidence is before the Court. In those circumstances, the Court will reluctantly accept the figure of $2,000.00 for the purposes of the balance sheet.
Value of husband’s interest in ‘(omitted business)’
The husband’s evidence is that his wife, Ms S, is the sole owner of the business and that, as such, he had no duty to disclose the business or place before the Court evidence as to its value. The husband discloses in his Financial Statement e-filed 25 May 2015 that he is employed by that business and that his income is $815.00 per week. Interestingly, he also discloses that Ms S receives an income of “E800.00” per week, presumably being income she receives from ‘her’ business. Ms S did not give evidence in these proceedings.
The wife asserts that the husband is either a co-owner of the business or has a beneficial interest in it. In support, she produced a copy of an internet advertisement placed by an overseas company promoting ‘(omitted business)’ as a “family business”.[9] The husband argues that this was an erroneous mistake.[10]
[9] Wife’s affidavit sworn and filed on 14 May 2015, paragraph 11; Annexures “J” and “K”.
[10] Transcript, 2 June 2015, page 46.
There is no evidence as to the value of the business before the Court.
The Court finds the husband’s evidence in relation to this issue unsatisfactory. His failure to file a consolidated trial affidavit (which would have updated his evidence) was either deliberate or a major oversight. Nevertheless, given the absence of further evidence, the Court is unable to make any finding as to whether the husband has any financial interest in the business or what the value of the business is.
‘Add-back’ of monies from the husband’s (omitted) and (omitted) superannuation policies
The wife asks that these monies (totalling $14,000.00) be added back into the property pool.
While the husband acknowledges that he had an interest in these superannuation funds, he asserts that no monies were received by him or are otherwise payable to him by the respective funds.[11] The husband indicated that he had certain documentation to support his assertion, however, I note that no such documentation was ultimately tendered into evidence.
[11] Transcript, 29 May 2015, page 53.
Given that there is no evidence before the Court that these funds now exist, they cannot be treated as property in which the parties have a legal or equitable interest. However, pursuant to s.75(2)(o) of the Act, the Court can take into account the dissipation of those funds by the husband (if established). The lack of evidence before the Court would make such a finding difficult.
‘Add-back’ of monies paid to the wife from her superannuation policy
The husband asks that these monies (totalling $48,000.00) be added back into (or otherwise be reflected as superannuation in) the property pool. The wife acknowledges in her Financial Statement filed 19 June 2014 that these funds were received by her and “paid to mortgage account”.[12]
[12] Wife’s Financial Statement filed 19 June 2014, Part M, Item 59.
Given that these superannuation funds no longer exist, they cannot be treated as property in which the parties have a legal or equitable interest. However, as previously stated, pursuant to s.75(2)(o) of the Act, the Court can take into account the dissipation of those funds by the wife. That said, given that there is evidence that these funds were used to reduce the debt over the Property O property, it would be inappropriate to argue that there has been a premature distribution in the wife’s favour in relation to the receipt of and subsequent dealing with, those superannuation funds.
Monies received by the wife from her parents
The wife asserts that her parents have loaned her sums totalling $150,000.00 and that these monies have been used to make substantial repayments to reduce the mortgage over the Property O property. These funds were received following the transfer of the Property O property to the wife (and the payment by the wife of $30,000.00 to the husband) in October 2012 (and indeed there is evidence that funds totalling $100,000.00 were received on 22 October 2012).[13] The wife further asserts that it was a “condition of the personal loan from [her parents] … that [it ] should be repaid at such time that either or both of [her] parents should need admission to residential care accommodation”.[14]
[13] Wife’s trial affidavit e-filed 14 May 2015, paragraph 113 and Annexure ‘L’.
[14] Wife’s trial affidavit e-filed 14 May 2015, paragraph 114.
The husband does not appear to dispute that the wife received these funds from her parents. Rather, he asserts that these monies were gifted to the wife and that, regardless, there is no expectation that these monies would be repaid to the wife’s parents.
In the absence of loan documents to support the wife’s assertion, it is unlikely that her parents could enforce the alleged agreement. It is also noteworthy that there was no corroborative evidence from the wife’s parents to support the assertion.
Given the above circumstances, the Court is unable to find that the monies received from the wife’s parents should be treated as a liability for balance sheet purposes. Nevertheless, these monies obviously increased the wife’s contributions considerably.
Husband’s income tax liabilities
The husband asserts in his Financial Statement e-filed on 25 May 2015 that he has certain tax liabilities being a debt of $2,435.00 owing in respect of the tax year ending 30 June 2014 and unpaid tax assessments for previous years totalling $6,816.00. He seeks that both amounts be included as relevant liabilities for balance sheet purposes. I note that no tax returns or assessments for the husband were tendered in evidence to support these assertions.
The wife does not admit that these liabilities are owed and otherwise objects to their inclusion as relevant liabilities for balance sheet purposes.
Given the above circumstances the Court is unable to find that these alleged tax liabilities should be included as relevant liabilities for balance sheet purposes.
VW Tiguan liability
The husband asserts in his Financial Statement e-filed on 25 May 2015 that he has a liability of $26,913.00 due to (omitted) Financial Services being a ‘chattel mortgage’ over the VW Tiguan. I note that no documents evidencing the chattel mortgage were tendered in evidence.
The wife does not admit that this liability and otherwise objects to its inclusion as a relevant liability for balance sheet purposes.
I note that the parties agree that the VW Tiguan has a value of $23,000.00. It would appear that the vehicle would have a negative value if the Court accepts that the amount of $26,913.00 is owing on it.
Given the lack of documents, it is difficult for the Court to make any finding in relation to this vehicle. In the circumstances, and given the uncertainty, I will remove the vehicle from the balance sheet.
Balance sheet findings
Given the above determinations, the Court finds that the net available property pool is $627,797.00. This sum is made up as follows:
No. Non-Superannuation Assets 1 Property O property (W) $620,000.00 2 (omitted) Bank Account (W) $1,697.00 3 (omitted) Bank Account (W) $13.00 4 Mitsubishi (omitted) (W) $3,000.00
5 Household contents (W) $2,000.00 6 Property T property (joint tenancy- 1/2 interest with Ms S) (H) $322,500.00
7 (omitted) Bank Account (H) $1,587.00
9 Household contents (H) $20,000.00
Sub-total $970,797.00
Agreed Add-back 13 Payment on transfer of H’s interest in Property O to W (H) $30,000.00
Sub-total (assets) $1,000,797.00 Superannuation 17 Not Applicable Not Applicable Liabilities 13 Mortgage Property O property (W) ($175,000.00)
15 Mortgage Property T property (1/2 interest with Ms S) (H) ($198,000.00)
Sub-total (liabilities) ($373,000.00)
Total net assets $627,797.00
Is it just and equitable to make any order?
The husband is before the Court seeking orders altering the parties’ property interests. The wife’s primary argument is for no orders to be made in relation to the parties’ property interests, as it would not be just and equitable to interfere with their affairs in line with the decision in Stanford.
The decision in Stanford makes it clear that the requirement for the Court to only make orders that are just and equitable is not to be conflated with the matters to be considered under s.79(4) in considering what order (if any) should be made. The High Court described the expression ‘just and equitable’ at [36] as “a qualitative description of a conclusion reached after examination of a range of potentially competing considerations... It is not possible to chart its metes and bounds.” However, the High Court went on to comment that there are three fundamental propositions that must not be obscured:
“37. First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers “altering the interests of the parties to the marriage in the property" (emphasis added). The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
38. Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed that a power to make such order with respect to property and costs " as [the judge] thinks fit", in any question between husband and wife as to the title to or possession of property, is a power which " rests upon the law and not upon judicial discretion". And as four members of this Court observed about proceedings for maintenance and property settlement orders in R v Watson; Ex parte Armstrong:
" “The judge called upon to decide proceedings of that kind is not entitled to do what has been described as 'palm tree justice'. No doubt he is given a wide discretion, but he must exercise it in accordance with legal principles, including the principles which the Act itself lays down”.
39. Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is " just and equitable" to make the order is not to be answered by assuming that the parties' rights to or interests in marital property are or should be different from those that then exist. All the more is that so when it is recognised that s 79 of the Act must be applied keeping in mind that " [c]ommunity of ownership arising from marriage has no place in the common law" . Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be "decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses" . The question presented by s 79 is whether those rights and interests should be altered.
40. Third, whether making a property settlement order is "just and equitable" is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised "in accordance with legal principles, including the principles which the Act itself lays down". To conclude that making an order is "just and equitable" only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.”[15]
[15] Footnote references have not been included in this extract.
The Court is satisfied that the wife does have a Stanford argument which should be explored. There was clearly an agreement between the parties in 2012 that the Property O property would be transferred to the wife, and that the wife would refinance the property. The wife made a payment to the husband of $30,000.00 on 17 October 2012, with the husband producing a document stating that after the payment “there would be no further financial claims or matters between us”. It is asserted by the husband that there was also an oral agreement that an extra $30,000.00 would be paid in two years if required, although this is disputed by the wife.
Arguably, there was either an agreement for the wife to pay the husband $60,000.00 by way of two equal instalments (with the husband having the option to waive the payment of the second instalment of $30,000.00) or the agreement was limited to the one-off payment of $30,000.00 only. The evidence would support the first argument. That said, it is not entirely clear whether the husband’s statement (namely, that “there would be no further financial claims or matters between us”) was a waiver of the additional payment, a variation to the agreement or simply an acknowledgement of the agreement entered into.
The wife clearly altered her financial position to assume responsibility for the mortgage and caused $30,000.00 to be paid to the husband. The wife made substantial repayments to the mortgage since the property was transferred to her in October 2012. The wife also used some $48,000.00 of her superannuation to preserve the Property O property. The wife submits that she relied on the husband’s representations and altered her position in line with those representations.
That said, there remains a factual disagreement as to an extra payment of $30,000.00. If the Court resists the husband’s application on the basis of the principles in Stanford, then an order for the wife to pay the husband an additional amount of up to $30,000.00 may be appropriate.
As referred to earlier in these reasons, if the Court is satisfied that it would be just and equitable to make orders altering the interests of the parties in the property, then the Court will be required to consider what orders should be made with reference to the various matters in s.79(4).
Contributions
As stated, the Court is required to consider the parties’ contributions made on and from the commencement of their relationship,[16] during their relationship and following separation.[17]
[16] In the Marriage of Olliver (1978) 4 Fam LR 360; (1978) FLC 90-499.
[17] In the Marriage of Ferraro (1992)16 Fam LR 1; (1993) FLC 92-335.
Financial and non-financial contributions
The husband asserts that during the relationship he had no period of unemployment, working either as a (occupation omitted) or operating the (omitted) business. It is submitted that the profits of the business provided a reasonable lifestyle for the parties for some 10 years. The husband further submits that the failure of that business was not due to any fault of his own but due to the economic climate at that time which affected many businesses. The husband asserts that he made an initial contribution of $110,000.00 to the Property O property, money which was provided as a gift to the parties by the husband’s parents. This is contested by the wife, who asserts that only $80,000.00 was put towards the Property O property by the husband.
Post-separation, the husband asserts that he paid $8,000.00 per year for Y’s school fees. The husband notes that X was an adult at the time of separation.
The wife asserts that she worked when she could throughout the marriage, working as a (occupation omitted). The wife’s parents allowed the parties to live rent free in their home for two years in order to allow the parties to save to purchase the Property N property. The wife asserts that she preserved her share of proceeds of sale of the Property N property, totalling $20,000.00, and used them to contribute $28,000.00 to the deposit on the Property B property. The wife further asserts that a sum of $40,000.00 was left to her by her uncle as an inheritance and that this sum was applied to the mortgage of the Property L property, which was later sold to discharge the debts incurred by the (omitted) business.
Post-separation, the wife acknowledges that the husband paid for the children’s primary school fees and for half of Y’s high school fees (the other half being covered by a scholarship). However, she asserts that the rest of the family expenses were paid by her, including the financial support of both their children from separation until the end of their respective university degrees.
Pursuant to s.79(4)(b) of the Act, the wife asserts that she conducted renovation on the Property L property and worked and maintained the Property O property, including painting that property.
As stated, there is also evidence that considerable monies (totalling nearly $150,000.00) were advanced by the wife’s parents to enable the wife to reduce the burden of the home loan account with (omitted) Bank over the Property O property to a more affordable level.
The issue, of course, is whether the wife can claim the use of these monies as a financial contribution. I note that in the case of In the Marriage of Kessey (1994) 18 Fam LR 149; (1994) FLC 92-495, the Full Court of the Family Court stated:
“… a contribution by a parent of a party to a marriage to the property of the marriage will be taken to be a contribution made by or on behalf of the party who is the child of the parent unless there is evidence which establishes it was not the intention of the parent to benefit only his or her child.”[18]
[18] In the Marriage of Kessey (1994) 18 Fam LR 149 at 161; (1994) FLC 92-495 at 81,150 (per Baker, Finn and McCall JJ).
While the husband does not deny that the wife was the beneficiary of significant funds received from her parents, he asserts that there is evidence that he was meeting the costs of the mortgage over the Property O property between 2002 and 2012, which he argues would total around $295,000.00. This assertion was not specifically disputed by the wife although she submits that she made several lump payments towards the mortgage prior to 2012 and that she has been meeting the costs of the mortgage since 2012.
Overall, whilst it would appear that both parties have made contributions to the Property O property, the significance of the husband’s initial contribution has eroded with time. The strength of the evidence supports the wife’s assertion that her (more recent) contributions to the Property O property are substantial.
It is clear from the evidence that the husband and his new wife, Ms S, have made a substantial contribution by the more recent acquisition of the Property T property. That said, it is not clear from the evidence whether the contributions of the husband and Ms S were equal or not. Nevertheless, it would appear that the Property T property is registered in the names of the husband and Ms S as joint tenants.
Family contributions (as homemaker and parent)
As has been previously noted, in addition to her contributions made pursuant to s.79(4)(a) and (b), I am satisfied that the wife was the primary homemaker for the parties and the primary carer of Y and particularly post-separation at which time the husband left the home to live in (country omitted).
There is some dispute about whether the husband has had a significant relationship with the children, noting for example that the husband did not invite the children to his wedding in (omitted) 2015.
Consequently, I find that the wife has made a significant contribution to the family pursuant to s.79(4)(c).
Global or asset-by-asset assessment of contributions
Given the circumstances of this case, I do not think that a ‘global’ approach to the assessment of contributions is appropriate, despite the length of the marriage. Consequently, an ‘asset-by-asset’ approach, or ‘multiple pools’ approach, appears to be needed.
I find it appropriate for the assessment of contributions to be based on three separate ‘pools’ being the Property O property, the Property T property and the personal property.
Contributions analysis
Property O property
The Court has found that the equity in the Property O property is $445,000.00. Although both parties made considerable financial contributions to this asset, the wife’s contributions (including her non-financial contributions and her family contributions) clearly outweighed those made by the husband.
Given the circumstances, the Court assesses the relative contributions, in percentage terms, as 80% to the wife and 20% to the husband. In dollar terms, this represents an amount of $356,000.00 to the wife and $89,000.00 to the husband.
Property T property
The Court has found that the equity in the Property T property is $124,500.00.
Given the circumstances, the Court assesses the husband’s financial contributions as 100%. Given that this asset was only recently acquired, and that the children of the relationship are no longer dependent upon the wife, the Court is satisfied that no off-set should be made for the wife’s contributions to the family.
Personal property
The Court has determined that the remaining net assets have a value of $28,297.00. Given the circumstances, the Court assesses the husband’s contributions to the personal property pool as 75% (noting that his household contents account for the majority of the personal property) and the wife’s contributions to this pool as 25%. In dollar terms, this represents an amount of $21,222.75 to the husband and $7,074.25 to the wife.
Section 75(2) (and related) factors
As stated, the Court must have regard to the relevant factors under s.79(4)(d) to (g) of the Act in light of the evidence.
Section 79(4)(d): effect of any proposed order upon the earning capacity of either party to the marriage
The wife submits that she is not in a position to seek gainful employment due to her health and carer’s responsibilities.
The husband also submits that he does not have prospects for future employment other than in the (omitted business) business. The husband plans to retire soon, given that he is aged over 65 years.
As such, the Orders sought are not intended to impact his earning capacity.
Section 79(4)(e): matters referred to in sub-section 75(2) so far as they are relevant
(a)The age and state of health of each of the parties
The parties are both aged in their sixties.
The wife submits that she has health issues which affect her ability to work. There is no evidence to suggest that the husband is not in good health. He works in a business which he asserts is wholly owned by his wife, Ms S.
(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 wife is not currently engaged in paid employment and is in receipt of Centrelink benefits (being a carer’s payment). She is a full-time carer for her elderly parents. The wife submits that her health issues affect her ability to work and that while she has been able to work full-time in the past, that she now finds herself in different circumstances that make working difficult.
As stated, the husband is a contractor for the (omitted business) business but he argues that he plans to retire soon. It is submitted by the wife that the husband has a greater capacity to earn a high income, given his ability to earn a high income in the past. The Court agrees with this submission.
(d)Commitments of each of the parties that are necessary to enable the parties to support:
himself or herself;
a child or another person that the party has a duty to maintain
The parties’ children are aged in their thirties and are therefore no longer maintained by the wife. While the husband has re-married, he has not fathered further children. The wife is a full-time carer for her parents.
(e)The responsibilities of either party to support any other person
Although the wife is a full-time carer for her parents, she is under no legal duty to do so. The Court acknowledges, however, that she has assumed an important moral duty to do so.
The husband has remarried and asserts that his wife owns the business that he earns an income from.
(f)The eligibility of either party for a pension, allowance or benefits…
The wife is in receipt of a Centrelink carer’s payment totalling $539.60 per week.
It would appear that the husband is gainfully employed as a contractor to the (omitted business) business. The Court is not aware that the husband is in receipt of, or has any immediate need for, any pension, allowance or government benefit. I note again that the husband gave evidence that he intends to retire soon. It was not immediately clear to the Court how his potential retirement might impact upon the running of the (omitted business) business.
(g)Where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable
I am satisfied that, should orders be made under s.79 of the Act, such outcome will provide a reasonable standard of living for the parties having regard to their assets and liabilities and the circumstances existing at the present time.
(h)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
As the wife is not seeking spousal maintenance this consideration 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
I am satisfied that on the evidence presented, there are sufficient assets to satisfy the claims of all known creditors.
(j)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
As the wife is not seeking spousal maintenance this consideration is not relevant.
(k)Duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration
This consideration is not specifically relevant to this dispute.
(l)Need to protect a party who wishes to continue that party's role as a parent
As stated, the children have both entered adulthood. Therefore this consideration is not specifically relevant to this dispute.
(m)If either party is cohabiting with another person – the financial circumstances relating to the cohabitation
There is no evidence to suggest that the wife has re-partnered.
As stated, the husband is married to Ms S. It is estimated on the husband’s financial statement that Ms S earns approximately $800.00 per week. It is also submitted by the husband that Ms S is the sole owner of the (omitted business) business, the value of which was unable to be determined. The husband and Ms S are joint tenants in the Property T property, with an agreed value of $645,000.00 and an agreed mortgage debt of $396,000.00. The joint household contents of the husband and Ms S are valued at $20,000.00. There is no further evidence as to the financial circumstances of Ms S. As noted, Ms S did not give evidence on behalf of the husband.
(n)Terms of any order made or proposed to be made under section 79
As the wife is not seeking spousal maintenance this consideration is not relevant.
(naa)Terms of any order or declaration made, or proposed to be made, under Part VIIIAB
This consideration is not relevant to the present dispute.
(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
There are no longer relevant children to this dispute and therefore the wife is not eligible to receive child support. It was submitted by the wife that the husband paid no child support to the wife post-separation but did pay for Y’s school fees.
(o)Any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
There are no other factors which the justice of the case requires to be taken into account that have not been discussed previously in this decision including the issue of the wife’s former superannuation accounts.
(p)The terms of any financial agreement that is binding on the parties to the marriage
Although the Court is yet to determine whether it would be just and equitable to make an order under s.79, it is clear that the parties had an ‘agreement’ in 2012 to settle matrimonial property. The parties differ, however on the terms and effect of that agreement. That is relevant because if there was an enforceable agreement, the husband would presumably either seek enforcement of it or, as he appears to be doing in this case, argue that the agreement was either breached or should be set aside. Regardless, it is equally clear that the ‘agreement’ is not a ‘binding financial agreement’ under the Act and hence cannot be enforced as such.
(q)The terms of any Part VIIIAB financial agreement that is binding on a party to the marriage
This consideration is not relevant to the present dispute.
Further adjustment analysis
In light of the above-mentioned circumstances, in the event that the Court determines that it is just and equitable to make orders without reference to the Stanford argument, the Court agrees with the submissions made by the wife that there should be an adjustment in her favour pursuant to s.75(2) and related factors.
In percentage terms, I am satisfied that a further adjustment in the wife’s favour in percentage terms of 5% in respect of each of the three property ‘pools’ is appropriate given all the circumstances.
Property O property
As stated, the available equity in the Property O property is $445,000.00.
Having assessed the wife’s contributions at 80% ($356,000.00) and the husband’s contributions at 20% ($89,000.00), then allowing for a further 5% adjustment in the wife’s favour for s.75(2) and related factors (being $22,250.00) then the overall adjustment for this property would be:
·Wife: 85% ($378,250.00)
·Husband: 15% ($66,750.00)
Property T property
As stated, the available equity in the Property T property is $124,500.00.
Having assessed the husband’s contributions at 100% ($124,500.00), then allowing for a further 5% adjustment in the wife’s favour for s.75(2) and related factors (being $6,225.00) then the overall adjustment for this property would be:
·Husband: 95% ($118,275.00)
·Wife: 5% ($6,225.00).
Personal property
As stated, the Court has determined that the value of the remaining (personal) property is $28,297.00.
Having assessed the husband’s contributions at 75% ($21,222.75) and the wife’s contributions at 25% ($7,074.25), then allowing for a further 5% adjustment in the wife’s favour for s.75(2) and related factors (being the equivalent of $1,414.85) then the overall adjustment for this property would be:
·Husband: 70% ($19,807.90)
·Wife: 30% ($8,489.10).
Calculations
Based on the above-mentioned, the wife should receive assets to the value of $392,964.10; such sum being calculated as follows:
Property O property: 85%
$378,250.00
Property T property: 5%
$6,225.00
Personal property: 30%:
$8,489.10
Total
$392,964.10
The husband should receive assets to the value of $204,832.90; such sum being calculated as follows:
Property O property: 15%
$66,750.00
Property T property: 95%
$118,275.00
Personal property: 70%:
$19,807.90
Total
$204,832.90
Adjustment
Given the above-mentioned, there should notionally be a payment made by the wife to the husband in the amount of $28,745.90 (having taken into account the earlier payment of $30,000.00). The relevant division of net assets may be summarised as follows:
Wife’s Net Asset Distribution Property O property $620,000.00 (omitted) Bank Account $1,697.00 (omitted) Bank Account $13.00 Mitsubishi (omitted) $3,000.00 Household contents $2,000.00 (Less) mortgage ($175,000.00) Sub total $451,710.00 (Less) payment made to husband in 2012 ($30,000.00) (Less) further payment to husband ($28,745.90) Total net assets $392,964.10
Husband’s Net Asset Distribution Property T property (1/2 interest) $322,500.00 (omitted) Bank Account $1,587.00 Household contents $20,000.00 (Less) mortgage ($198,000.00) Sub total $146,087.00 Payment from wife in 2012 $30,000.00 Further payment from wife $28,745.90 Total net assets $204,832.90
It is noteworthy that this calculation is very close to the additional $30,000.00 payment that was in dispute in the first place.
Conclusion
This case concerns a 41 year marriage, during which the parties were separated for at least 19 years, where the assets available for distribution are relatively modest.
Having considered the submissions in light of the legislation, relevant case law and the available evidence, the Court is persuaded by the wife’s argument and finds that it would not be just and equitable to allow the parties to depart from the property division they effected in 2012. The parties, in particular the wife, acted upon their agreement and altered their financial positions accordingly.
That said, the Court is satisfied that the husband did not waive the additional payment due to him in the amount of $30,000.00 and consequently that amount remains due to him. Orders for the payment of that amount by the wife to the husband are therefore required. Should the wife fail to pay the husband the required sum within the next 42 days interest in accordance with the Rules of the Court will be payable. In the event that the wife fails to pay the husband the required sum then she will cause the sale of the Property O property and the required sum will be paid to the husband from the net proceeds of the sale.
If the Court had not be so persuaded by the wife’s ‘Stanford’ argument, it is noteworthy that the result would have been substantially the same in any event following a consideration of the relevant contributions and s.75(2) factors.
There will be a further order that the parties will retain all property including personal property, savings in bank accounts and such held in their sole names or in their respective possessions.
There will be an order, pursuant to s.106A of the Act, to take effect in the event of default in signing any required documentation.
I note again that neither party sought costs against the other.
The Court is satisfied that the orders to be pronounced at the commencement of this judgment are a just and equitable division of the matrimonial property of the parties.
I certify that the preceding one hundred and fifty-five (155) paragraphs are a true copy of the reasons for judgment of Judge Monahan
Date: 18 May 2016
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Costs
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Injunction
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