Hines & Easton (No 2)
[2024] FedCFamC2F 536
•3 May 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Hines & Easton (No 2) [2024] FedCFamC2F 536
File number: ADC 5343 of 2022 Judgment of: JUDGE BROWN Date of judgment: 3 May 2024 Catchwords: FAMILY LAW – PROPERTY – final hearing – de facto relationship of 23 years – relationship produced two children who are now adults – where the respondent seeks the dismissal of applicant’s application – where the applicant seeks a 50/50 distribution of assets – relatively modest asset pool – assessment of contributions – future needs – considerations of just and equity – matters to be considered Legislation: Age Discrimination Act 2004 (Cth) s 3(e)(i)
Evidence Act1995 (Cth) s 140
Family Law Act 1975 (Cth) Pts VII, VIIAB, ss 4, 4AA, 39B, 44(6), 79(2), 90SF, 90SM, 90XC
Cases cited: Bevan & Bevan [2013] FamCAFC 116
Biltoft & Biltoft (1995) FLC 92-614
NHC & RCH (2004) 32 Fam LR 518
Clauson v Clauson (1995) FLC 92-595
C & C (2005) 33 Fam LR 414
D & D [2003] FamCA 473
De Angelis v De Angelis (2003) FLC 93-133
Ferguson & Ferguson (1978) FLC 90-500
Ferraro v Ferraro (1993) FLC 92-335
Fox v Percy (2003) 214 CLR 118
Hall v Hall (2016) 257 CLR 490
Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143
Horrigan & Horrigan [2020] FamCAFC 25
In the Marriage of Browne & Green (1999) 25 Fam LR 482
In the Marriage of DJM and JLM (1998) 23 Fam LR 396
In the Marriage of Kowaliw (1981) FLC 91-092
In the Marriage of AJO & GRO (2005) 33 Fam LR 134
In the Marriage of Townsend (1994) 18 Fam LR 505
Lee Steere v Lee Steere (1985) FLC 91-626
L & L [2003] FamCA 40
Magas & Magas (1980) FLC 90-885
M & M [1998] FamCA 42
Pierce & Pierce (1999) FLC 92-844
Russell & Russell [1999] FamCA 1875
Hines & Easton [2023] FedCFamC2F 311
Stanford v Stanford [2012] HCA 52
Steinbrenner & Steinbrenner [2008] FamCAFC 193
Trevi & Trevi [2018] FamCAFC 173
Wardman & Hudson (1978) FLC 90-466
Waters & Jurek (1995) FLC 92-635
Watson & Ling [2013] FamCA 57
Weir & Weir (1993) FLC 92-338
White & Tulloch & White (1995) FLC 92-640
Division: Division 2 Family Law Number of paragraphs: 317 Date of hearing: 12 & 13 March 2024 Place: Adelaide Counsel for the Applicant: Ms Dichiera Solicitor for the Applicant: Adelta Legal The Respondent: Appeared in person ORDERS
ADC 5343 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR HINES
Applicant
AND: MS EASTON
Respondent
ORDER MADE BY:
JUDGE BROWN
DATE OF ORDER:
3 MAY 2024
THE COURT ORDERS THAT:
1.Within sixty (60) days of this Order, Ms Easton (“the respondent”), do pay to the trust account of Adelta Legal for and on behalf of Mr Hines (“the applicant”) the sum of NINETY THOUSAND DOLLARS ($90,000.00).
2.In the event that the respondent fails to comply with paragraph 1 herein, then within one hundred and twenty (120) days of this Order, the respondent shall vacate the Suburb C property and the parties shall do all things necessary to place the Suburb C property on the market for sale subject to the following conditions:
(a)The selling agent shall be agreed in writing and failing agreement within ninety (90) days of this order it shall be such selling agent as nominated by the Secretary of the Real Estate Institute of South Australia; and
(b)The terms and conditions of the sale including the sale price and the mode of sale shall be agreed in writing.
3.The parties shall follow the advice provided by the nominated selling agent from time to time including but not limited to the mode of sale, conditions of sale, any offers to purchase and any repairs or improvements required to the Suburb C property prior to sale.
4.The parties shall be jointly responsible for the costs of selling the Suburb C property including but not limited to any gardening or housecleaning services recommended by the nominated selling agent.
5.Upon sale of the Suburb C property, the proceeds of sale shall be disbursed as follows:
(a)To pay all sales costs and commissions;
(b)A sum representing 61% of the parties’ net superannuation and non-superannuation assets to the respondent; and
(c)A sum representing 39% of the parties’ net superannuation and non-superannuation assets to the applicant;
6.In accordance with section 90XT(4) of the Family Law Act 1975 (Cth) (“the Act”), a base amount of TWENTY THREE THOUSAND, THREE HUNDRED AND NINETY-FOUR DOLLARS AND FIFTY TWO CENTS ($23,394.52) is allocated to the applicant out of the respondent’s interest in her Super Fund G (Client ID number …, Account ID …).
7.In accordance with section 90XT(1)(a) of the Act:
(a)The applicant is entitled to be paid, the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (“the Regulations”); and
(b)The respondent’s entitlement in the Super Fund G shall be correspondingly reduced.
8.The trustee of the Super Fund G (“the trustee”) shall do all such acts and things and sign all such documents as may be necessary to:
(a)Calculate, in accordance with the requirements of the Act and the Regulations, the entitlement awarded to the applicant created by paragraph (6); and
(b)Pay the entitlement whenever the trustee makes a splitable payment from the respondent’s interest in the Super Fund G.
9.Within fourteen (14) days of the date of these Orders, the respondent shall serve a copy of these Orders upon the trustee.
10.This order shall have effect from the operative time and the operative time for paragraph (6) is the fourth business day after service of a certified copy of these Orders on the trustee.
11.The parties shall each pay half of any fees charged by the trustee of the fund in administering the payment split pursuant to these orders.
12.Including but without limiting the effect hereof, the applicant shall retain for his sole use and benefit absolutely free from any further claim or demand of the respondent:
(a)His Motor Vehicle 1;
(b)His personal savings;
(c)His superannuation entitlements;
(d)His furniture and effects, including hobby equipment; and
(e)All other property in his possession and control.
13.Including but without limiting the effect hereof, the respondent shall retain for her sole use and benefit absolutely free from any further claim or demand of the applicant:
(a)Her Motor Vehicle 2;
(b)Her personal savings;
(c)Her superannuation interest subject to paragraphs (6) – (11) herein;
(d)Her furniture and effects; and
(e)All other property in her possession and control.
14.All extant applications are hereby dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BROWN:
INTRODUCTION
These are de facto property proceedings, which fall to be determined pursuant to the provision of Part VIIIAB of the Family Law Act 1975,[1] which is headed Financial matters relating to de facto relationships.
[1] Hereinafter referred to as “the Act”.
The parties concerned are Mr Hines and Ms Easton. They began their relationship in 1998. They are the parents of two children, now both adults. Their names are X born in 2000 and Y born in 2002.
There is no controversy that the parties were involved in a de facto relationship of twenty three years in duration, which falls within the definition provided by section 4AA of the Act.
Mr Hines was born in 1958. He left school, after completing Year 10 at High School, to commence an apprenticeship. However, for most of his working life, from early 1985 onwards, he was employed as a tradesperson/supervisor by the Employer F.
He retired from his position in 2023, when he turned sixty-five years of age. Until his retirement, Mr Hines had never been unemployed. His long-standing aspiration was to retire at what has long been regarded as the conventional age. His retirement was not motivated by ill-health or incapacity. He concedes that his former employer has offered him some form of part-time work but, at present, he has no desire to pursue or explore other forms of paid employment.
Ms Easton was born in 1966. Currently, she is employed, on a part-time basis, working approximately 40 hours a fortnight, as a health care worker, by Employer H. Ms Easton acquired her health care qualifications during the parties’ relationship between 2007 and 2009, after she had ceased being the stay-at-home parent for X and Y.
Accordingly, Ms Easton has just turned fifty-eight years of age. In these circumstances, if she follows the path provided by Mr Hines, she has a further seven years in the workforce (or nine, if one has regard to the current age at which she would be eligible to an aged pension). Given these factors, it is Mr Hines’ submission that Ms Easton has, in some ways, a greater level of financial security than he does, in the sense that she has a recurrent income, where he does not.
Necessarily, Ms Easton does not agree. In her oral evidence to the court, she described eloquently her great passion for her job and her commitment to her patients. Mr Hines agreed that she was an exceptional health care worker, who was especially adept at managing her patients. However, it is her case that it is not realistic for her to work beyond sixty because of a variety of long-term and permanent medical conditions which she suffers.
These include a medical condition, which she has suffered from her teens and which have worsened since she passed through menopause; and major depression, associated with anxiety and insomnia. It is the effect of her evidence that this was the major factor that led to her working only on a part-time basis. It is also her case that her depression was precipitated by the unhappy nature of her relationship with Mr Hines, over many years.
As this summary indicates, the parties were involved in a committed and significant relationship over very many years. There is no controversy between them that they met in 1998 and became a de facto couple later in the same year, when their family home at B Street, Suburb C was purchased. This was their shared family home for the twenty-three years of their relationship.
The relationship ended in 2020, when Mr Hines left the home, in emotionally challenging circumstances, which continue to reverberate for both him and Ms Easton. Axiomatically, this is readily explicable given the length of the relationship between them and its implications for them both individually and as parents. The case has been difficult for all concerned in it, suffused as it has been by a level of bitterness and recrimination from both sides.
The sad fact is that notwithstanding a lifetime of mutual hard work, there are simply not enough assets available to be divided between them now, which are sufficient to provide each of them with a comfortable and secure standard of living in the later stages of their respective lives. The crisis in their relationship coincides with the period in life when each of them must begin the ascent into the foothills of older age and beyond.
One of the invertible consequences of the end of the de facto relationship between a couple is likely to be a diminished standard of living, for each of the parties concerned in retirement. In blunt terms, two individuals cannot live as financially efficiently as a couple, particularly when accommodation expenses must be duplicated.
The main focus in this case is on how this misfortune is to be mutually apportioned in a just and equitable way, particularly what should occur in respect of the Suburb C property. The dilemma thrown up by the case can be summarised under two simple propositions:
·Firstly, do considerations of equity and fairness dictate that the property must be sold so that each party can crystalise their respective contributions in dollar terms, particularly Mr Hines, who currently derives no benefit whatsoever from the property, notwithstanding the fact that, in the past, he undoubtedly made financial contributions towards its acquisition; or
·Secondly, on the other hand, would the property’s compulsory sale be, of itself, an outcome of such manifest unfairness, particularly to Ms Easton, who requires the property to provide her with accommodation, in circumstance in which she has limited prospects of acquiring an alternative to it, that the court cannot countenance its sale in terms of what is just and equitable.
The Suburb C property, along with Mr Hines’ superannuation entitlements, with Super Fund G, now in part payment phase and due to crystallise in a little under two years, are the parties’ most significant assets in financial terms. The property has been independently valued, by an expert, as at early 2024, to be currently worth $550,000.00.[2] At present, this superannuation is valued at $198,916.81[3] together with an amount of savings (funded by drawdowns from an income stream) in an amount of $50,294.00.
[2] See Annexure H-2 to affidavit of Mr Hines filed 6 March 2024.
[3] See Annexure H-5 to affidavit of Mr Hines filed 6 March 2024. The printout produced shows an amount of $161,466.83 in an income stream account and an amount of $37,449.98 in the bank account.
Accordingly, this is what is often referred to as a small property pool case. However, the modesty of the asset pool does not, in any way, reduce the level of difficulty, which the case throws up or diminish the potency of its outcome for the parties concerned. Put simply, there is no obvious outcome in the case, which will readily satisfy the needs and expectations of both of the parties.
Obviously, it is impracticable for both parties to share the occupation of the Suburb C property – effectively live as co-tenants now that the relationship between them has ended leaving them on extremely poor terms.
At the same time, each acknowledges that it would be a financial and logistical disaster for Ms Easton (and to a lesser degree Mr Hines), if the property has to be sold, given the dislocation involved and that the fact that its sale is unlikely to release sufficient capital to enable each of them to easily purchase suitable accommodation in future. In addition, the selling costs would also represent a significant impost upon each of them, which they can ill-afford.
Ms Easton has some superannuation but due to her prolonged absence from the workforce, whilst engaged in home duties, it is not of the same magnitude as that of Mr Hines. Accordingly, the reality is that each of them is likely to be reliant on the aged pension, in due course, to fund them in retirement. Necessarily, the combination of age and lack of recurrent income is likely to be a significant impediment to each of them being able to service any long-term level of debt.
Mr Hines enjoys good health. He has many hobbies. It is Ms Easton’s case that, during the relationship, he withdrew from family life to pursue these interests, leaving all homemaking and parenting responsibilities to her. During her oral evidence, there was no disguising her level of disdain for Mr Hines in this regard – she said he did nothing… he was not there. He slept in or went [out]. I did everything.
It is her further position that Mr Hines has diverted significant levels of joint funds into the purchase of expensive hobby gear from sources in the UK. In these circumstances, it is her case that Mr Hines’ overall level of contributions to the relationship are extremely limited and this should be a major factor militating against the sale of the property.
Mr Hines agrees that he has these interests and has traded his hobby items on the internet from time to time and does himself have a variety of gear. He also agrees that, in its latter stages, the parties’ relationship was frequently unhappy and concedes that he made statements to Ms Easton, which were hurtful to her and which he now regrets.
However, it is his position that Ms Easton’s concerns are over-stated and her efforts to minimise his contributions during their long relationship are misconceived and tactically motivated. It is his case that he was committed to the relationship and the family, in all manner of ways, including financially, and as such, his contributions, including to the acquisition, improvement and preservation of the Suburb C property must be considered significant.
In these circumstances, it is the central underpinning of the case that it would be fundamentally unfair to him and indefensible in equitable terms, if he is to be denied proper recompense for his significant contributions, provided over a relationship of more than twenty years, just because of the difficulty this may create for Ms Easton.
Mr Hines vacated the Suburb C property in mid-2020, when he went to live with his eighty-six-year-old mother, Ms K, who was born in 1937, at the home, which she owns, at J Street, Suburb L.
At the time, he hoped the parties’ separation was temporary and they could reconcile the difficulties in their relationship, which appear to be long-standing. From his perspective, this explains the delay in him instituting these proceedings.
For her part, Ms K felt hurt and betrayed by the separation. She is also significantly aggrieved that Mr Hines began these proceedings at all, which necessarily have cast a pall of uncertainty about her circumstances and caused her considerable emotional upset. It was apparent to me, from her presentation in court that although she is an intelligent and determined person, she cannot be regarded as being emotionally robust.
Essentially, her greatest fear is that she will lose her home of twenty-three years and will be unable to easily find an alternative one. It is her case that such an outcome would represent a grave injustice to her and, in all good conscience, the court should not consider it.
This is particularly so given her perception that her contributions, as a parent and homemaker, were considerably greater than those of Mr Hines, whom she characterises as being currently very comfortable and secure in the home of his mother, which with her (Ms K) passing, he will almost certainly inherit.
Mr Hines continues to live with his mother. She is legally blind and immobile. She fell and injured herself last year. She is widowed and receives an aged pension. Mr Hines is her main provider of care and is happy to continue to do so both because of his love for her and his sense of filial obligation, given the care she provided to him as a child.
He concedes that he is comfortable in her home and feels no pressing need to move out. For obvious reasons, the easiest way for him to provide the care, which his mother requires, and he is happy to provide, is if the two live together. He deposed that he does not have to pay his mother any formal amount of rent. He does however contribute a regular amount of board, which he calculates to be around $150.00 per week.
At present, he is living off his savings, largely funded by an annual tax-free lump sum, which he has been able to draw down from his superannuation, since 2021. He will qualify for an aged pension when he turns sixty-seven. Whether this will be a full or partial pension is not clear.
At present, Mr Hines is uncertain whether he might be eligible for some form of carer’s allowance. In this context, it seems apparent that he is not under any great financial imperative to explore this option. Apart from his interest in his unusual hobbies, which he concedes does involve reasonably expensive equipment, he seems to live extremely frugally – as indeed does Ms Easton.
In these circumstances, it is Ms Easton’s case that any immediate comparison of the parties’ respective current financial situation indicates that Mr Hines is incontrovertibly better off than she is. He is financially secure; whereas, in contrast, she is financially precarious, depending on the Suburb C property to provide a rent-free roof over her head and otherwise spending her income on basic living expenses.
From Ms Easton’s perspective, the various lump sum superannuation payments drawn down by Mr Hines are to be regarded as a premature distribution of assets in his favour and so should be notionally added-back into the parties’ pool of assets and treated as being items of capital retained by him, which should be accounted for in respect of how other items of property are distributed, as a matter of fairness.
Ms Easton continues to live in the Suburb C property, with X and Y, who regard it as their home. X is a bright and accomplished young person, who is currently studying at university. Y is not travelling so well. At present, he has some issues with his mental health and can work only a few shifts a week earning around $26.00 per hour. She estimates that he earns about $128.00 per week. Neither Y nor X pay any formal rent to their mother.
Mr Hines had been previously married when he and Ms Easton met. He was able to resolve property issues with his first wife and brought a modest sum of $12,000.00 into the relationship, which was utilised to provide a deposit for the purchase of the Suburb C property, which was acquired for the sum of $110,000.00 in 1998.
Ms Easton did not have any significant level of financial backing at this time. However, because Mr Hines had previously owned a piece of real property, whilst Ms Easton had not, she was eligible for government financial assistance, as a first homeowner. For that reason, the property was and remains registered in her sole name. The balance of the purchase price was borrowed from Bank D jointly and secured by a first mortgage.
There is no dispute that Mr Hines’ income was the sole source of mortgage payments from the period shortly before X’s birth until Ms Easton returned to the workforce following the completion of her health care training in 2009. Thereafter he continued to provide a significant level of financial support for the family, which was augmented by Ms Easton’s part-time wages.
When the parties separated, the amount owing in respect of the mortgage was the modest amount of $6,000.00. Although the property has been improved by the addition of another bedroom and the installation of solar panels, it is Ms Easton’s position that it is rundown and currently in need of repair, which she can ill-afford. It is, however, her, X and Y’s home and she has no desire to leave it.
Since the parties separated, Ms Easton has paid off the remainder of the mortgage and the property is now debt free. It is Mr Hines’ case that he also made some payments in this regard and also finished paying off the necessary instalments, in an amount of $6,500.00, which were due in respect of the solar panels which had been fitted to the house. He refutes the suggestion that he abandoned Ms Easton and the family, in a financial sense, on separation.
Ms Easton puts it otherwise. Essentially, it is her case that Mr Hines was able to move seamlessly into his mother’s house, where he lives cheaply and comfortably, which is in marked contrast to her. It is her case that she has a modest income from her part-time work of about $800.00 gross per week, which is largely taken up in paying recurring expenses, including providing food, energy and shelter for X and Y.
There is no controversy that Mr Hines is an only child and therefore is likely to be his mother’s closest living relative in emotional terms. He does have an uncle, whom he believes is either 77 or 78 years of age. It is also apparent from the circumstances of his current living arrangements with Ms K that there is the level of love and affection one would anticipate arising between mother and child.
In these circumstances, it is Ms Easton’s contention that Mr Hines must be regarded as having an expectation that he will inherit his mother’s estate, which the court must regard as a form of financial resource to which he will have recourse in due course and which therefore must be taken into account, by the court, pursuant to the provisions of section 90SF(3)(b) of the Act, which mandates what is invariably referred to as the third step in the process required to be followed by the court in dividing property referrable to a de facto relationship.
In blunt terms, it is Ms Easton’s case that it is inevitable, in the reasonably foreseeable future, Mr Hines will inherit his mother’s home in Suburb L and will thus be securely accommodated for the remainder of his active retirement and it would be axiomatically inequitable for the court to ignore this valuable financial resource, which will be ultimately available to him.
As a consequence, it is the effect of her submission in this case that it must be regarded as being the only fair and feasible outcome in the case that she should retain the Suburb C property so that she enjoys the same level of accommodation security as Mr Hines currently has and will continue to have, after the parties’ long relationship.
Ms K is not a party to these proceedings and is under no obligation to provide discovery in it. Mr Hines himself is not entitled, as of right, to know whether his mother has prepared a will and what are its contents. Given her contentions in the matter, Ms Easton directed a subpoena to Ms K, requiring her to produce to the court a copy of her current will.[4]
[4] See Subpoena filed on 7 June 2023.
Ms K objected to producing her will. Her objection was upheld by a registrar of the court on 21 August 2023 and Ms Easton was ordered to pay the costs of the proceedings fixed in an amount of $2,606.00. It is Mr Hines’ position that he is entitled to these costs.
However, in my view, for reasons upon which I will expand upon in due course, the existence and contents of Ms K’s will and their potential to be relevant to these proceedings, was not determined by the outcome of the subpoena proceedings. The court is not in a position to ignore the potential financial resource which is represented by the Suburb L property.
In this context, in my view, Mr Hines correctly points out, it is possible that his mother, may not have left her estate to him or may, in fact, at some point in the future, if she has done so, change the effect of her will. This is her undoubted entitlement. There is no evidence to indicate that she has suffered any significant level of cognitive decline with age.
More significant, in my estimation, to either of these two considerations, is the far more compelling fact that, as Ms K’s health deteriorates, with her encroaching old age, she may be compelled to enter a nursing home, which may necessitate the sale of the property and the utilisation of its proceeds to pay either an accommodation bond or the fees incurred in providing for her care, possibly over many years.
Whether any of these eventualities will occur is currently unknowable as is the extent of Ms K’s life. It is not beyond the bounds of possibility that she will have a further ten years or more of life expectancy before her, which may result in the erosion of her current level of asset backing.
What will be her circumstances for that period cannot be known. Although one would reasonably assume, in keeping with most individuals, her preference would be to live in her own home for as long as possible. Whether this is achievable must depend on her state of health and dependency and the on-going willingness and capacity of her son to provide her care.
What is apparent, at the present time, is that Mr Hines is adequately housed and has no plans to move elsewhere; the same can be said of Ms Easton, who views the prospect of having to leave the Suburb C property with consternation. She is well settled in the property, which has been her home for the past twenty-five or so years. She views it as fundamentally unfair that she should have to move from a certain housing situation into one which is precarious and uncertain.
Given her age, state of health and level of financial backing, it must be the case that her capacity to acquire a similar degree of security, in some alternative form of accommodation, must be extremely limited. Necessarily, the first thing to which any prospective lender will turn is the capacity of the borrower in question to service any debt to be advanced.
On the other hand, can it be characterised as equitable, for the court, in effect, to discount Mr Hines’ indisputable financial and other contributions, provided over the same period of time, which enabled the acquisition of the Suburb C property in the first place, in order to provide Ms Easton with the same level of security in accommodation, which Mr Hines currently enjoys in the Suburb L property, although perhaps not an indefinite basis, given the exigencies of Ms K’s personal situation.
In these extraordinarily challenging circumstances, is there a very palpable risk that, in attempting to be even-handed to both parties, the ultimate outcome to be forged by the court, will be equally disadvantageous to each of them? In effect, the property is directed to be sold, but it proceeds provides neither of them with accommodation in the longer term.
In this context, although each party is either retired from the workforce or is in sight of such a retirement, such a period of uncertainty may well be in excess of twenty years for each of them, given current expectancies of life.
As a consequence of all these considerations, I am well aware of the moment of the decision which I must make in this case. It is one of extraordinarily high stakes for each of the parties concerned, particularly Ms Easton. I reiterate, there can be no perfect outcome in this case, which can obviously satisfy the expectations of both of the parties.
THE APPLICATIONS
Mr Hines commenced these proceedings on 23 November 2022. He has had the same solicitor and counsel throughout the matter. Given the agreed date on which the parties ceased to live together in the Suburb C property, his application was out of time and required leave to proceed pursuant to section 44(6) of the Act.
On a final basis, it is Mr Hines preference that the sale of the Suburb C property should be avoided. In this context, he seeks orders, the effect of which can be summarised as follows:
·Within 60 days of the conclusion of the matter, Ms Easton pay to him a sum to represent 50% of the parties’ net assets, including superannuation;
·On payment of such a sum, Ms Easton retain the Suburb C property;
·If Ms Easton was not able to comply with this order by paying the sum so calculated to Mr Hines, the property be placed on the market for sale and after selling costs deducted and other items of property taken into account, the proceeds be divided so as to bring about an equality in the distribution of assets and superannuation to the parties.
For reasons, I assume, related to economy, Ms Easton has acted on her own behalf throughout the proceedings. She has had assistance from her brother-in-law, Mr M, who has acted as her McKenzie friend from time to time.
She filed her response to the application on 27 January 2023. Initially, she sought that Mr Hines be refused leave to proceed out of time. However, if leave was granted, she sought the following order:
Were the Court to grant that 'leave', then I request the Court to find that it is not 'just and equitable' for a property settlement to occur between [Mr Hines] and I, and that the property should 'lie where it falls' as of our separation date ([mid]-2020).
The court dealt with the leave out time application on 23 March 2023 and granted Mr Hines leave to proceed out of time.[5] In the judgment I attempted to summarise the fraught emotional circumstances which had surrounded the event of mid-2020, when Mr Hines had vacated the Suburb C property.
[5] See Hines & Easton [2023] FedCFamC2F 311.
From his perspective he had been asked to leave on a temporary basis, whilst Ms Easton considered her position and whether she was prepared to remain in the relationship. It was his case that it was only in mid-2022 that he had reached the reluctant conclusion that Ms Easton was not willing to reconcile, which was a source of great personal regret to him. This was his primary explanation for not commencing the proceedings sooner.
Ms Easton views the situation very differently. It was her position that in mid-2020 Mr Hines had effectively abandoned her financially, leaving her to pay all the outgoings in respect of the Suburb C property. It was her contention that in so doing he was essentially subjecting her to financial blackmail to compel her to return to the relationship through the exertion of his financial control over her.
Needless to say, it remains her case that it would be to her unfair for the court, in effect to reward what she regards as unfair and manipulative conduct on Mr Hines’ part. In addition, she asserted that the consequence of Mr Hines not having, in her view, paid his way in the aftermath of the events of mid-2020 was that he should be taken to have abandoned any claim he had for a settlement of de facto property. In this context, she asserted that the reason Mr Hines had subsequently made some limited mortgage payments and contributed to the paying off of the solar panels was a cynical one, directed towards shoring up his claim to be granted leave to proceed out of time.
In her affidavit, opposing the extension of time application, Ms Easton deposed as follows:
[Mr Hines] deliberately contributed nothing to the mortgage repayments, loan repayments for the solar system, council rates, house insurance premiums and costs for the maintenance of the house, as a means to exert financial hardship on me. This was done in order to achieve his goal of forcing me back into a relationship through his financial pressure.
These are the types of liabilities that a potential interested party should have been contributing to, in order to protect that interest after the breakdown of a relationship, especially if that party wished to re-establish that relationship, not through coercion, but through compassion and empathy.[6]
[6] See affidavit of Ms Easton filed 21 December 2022 at [17]-[18].
I provide this summary of each party’s perspective, at the outset of the proceedings, to place the case in its powerful emotional context. As I have indicated throughout the proceedings, the attribution of fault, either moral or actual, no longer plays a part in the determination of family law matters.
In the case outline document prepared by his counsel Ms Dichiera, Mr Hines has calculated the parties’ net assets and superannuation entitlements (including those of Ms Easton) to amount to the sum of approximately $960,000.00. During the hearing of the trial, he advanced an open proposal to avoid the sale of the Suburb C property and its retention by Ms Easton, which would involve the following:
·Ms Easton pay him the sum of $130,000.00;
·There be a split, in his favour, out of Ms Easton’s superannuation in an amount of $90,000.00; and
·He retain his motor vehicle ($5,000.00); his hobby gear ($3,000.00); his savings ($50,294.00); and his superannuation ($205,137.00).
On his calculations this would result in him retaining approximately 50% of the asset/superannuation pool and provides the only equitable path to Ms Easton being able to retain the Suburb C property. As will be delineated in due course, the chief detriment of this outcome is that would leave Ms Easton with precious little superannuation and she would have to borrow a reasonably significant sum – either on commercial terms or from some friendly source which, given no such source has been alluded to by her, may not, in fact, exist.
In her case outline, Ms Easton proposes that there be an 83.57%/16.43% division, in her favour, in respect of the pool of property, which she calculates to amount to a sum slightly in excess of $1m. It is her case that her contributions during the relationship were greater than those of Mr Hines and certainly this has been the case in the period since separation.
In her affidavit material, she has identified a number of contribution factors, which she asserts greatly favour her, which can be summarised as follows:
·Maintenance to the home which Mr Hines failed to provide;
·An inheritance received by her in 2012;
·The post separation appreciation of the former family home; and
·Her post-separation financial contributions.
In summary, in her affidavit she deposes as follows:
I consider my 'contributions' made to the relationship and the assets associated with it, to outweigh those of [Mr Hines] by 33.57%, and as such, I appeal to the Court to determine a 83.57% - 16.43% division of the Property Pool valued at approximately $1,088,000, in my favour, based on those 'contributions' overall.[7]
[7] See affidavit of Ms Easton filed 25 February 2024 at [82].
In practical terms, Ms Easton has calculated a percentage, which relates to each of these items which results in her contributions greatly outweighing those of Mr Hines. The effect of this if implemented, is that she must inevitably retain the Suburb C property, which in both legal and emotional terms, she regards as her sole property.
However, the main thrust of her submissions remains that it would not be just and equitable for there to be any property orders made other than that each party retain assets and superannuation standing in their respective names.
Her written submissions include the following statements:
As to the future capacity of the parties to earn income by way of employment, I believe this to be equal. The difference in our ages being offset by my medical conditions, and my anticipated need to cease work within the next 1-2 years due to those conditions.
As to the accommodation needs of the parties in the future, I contend that [Mr Hines] is content in living rent free at his mother's house and will continue to do so until her house passes to him due to her testamentary wishes, whenever this was to occur.
I contend that it is not 'just and equitable' for Final Orders to be made in this Application, following the Court's considerations made under sub-section 90SM (3) of the Family Law Act 1975 (the Act).
The main reason for this contention is that both parties present and 'future needs' are currently being met, and will continue to be met in the future, without such Orders being made.
This current equitability cannot be matched by any Final Orders being made based on 'contributions' alone.[8]
[8] See Outline of Case of Ms Easton filed 25 February 2024.
Effectively, it remains Ms Easton’s position which she adopted in opposing Mr Hines application to proceed out of time, namely that each party should retain the assets and superannuation standing in their respective names and no other adjustment of property be made.
THE EVIDENCE
In these reasons for judgment, findings of fact are made on the balance of probabilities, from my observation of the demeanour of each of the witnesses concerned.[9] I have tried to reach my conclusions on credibility and reliability on the basis of contemporary materials, objectively established facts and the apparent logic of events.[10]
[9] See Evidence Act1995 (Cth) s 140.
[10] See Fox v Percy (2003) 214 CLR 118, 129 [31] (Gleeson CJ, Gummow and Kirby JJ).
In addition, I bear in mind section 140(2) of the Evidence Act 1995 (Cth), which indicates that in applying this standard of proof, I am entitled to consider the nature of the subject-matter of the proceedings and the gravity of the matters alleged.
Mr Hines and Ms Easton were the only witnesses to give evidence in these proceedings. I do not consider that it is a case which turns on the court’s assessment of the credibility. When all the evidence is considered, it is my view, that there are, in reality, very few significant areas of controversy between them.
Rather each followed the natural human tendency, in proceedings, such as these, to maximise their own contributions and minimise those of the other. It was not easy for Ms Easton to present her case, given the moment of these proceedings for her. Although invariably courteous to me – a fact for which I thank her – she was, for understandable reasons, in a state of high emotional charge during the proceedings.
In effect, she presented herself as having been brought, in her terminology, kicking and screaming to court and as the victim of an unscrupulous bully in the form of Mr Hines. I accept that the current circumstances, in which Ms Easton finds herself are extremely unfortunate. However, Ms Easton’s approach to them was marked by a significant level of denial, which inhibited her capacity to focus on issues and the evidence in the case in an objective manner.
As a consequence, she was incapable of conceding that Mr Hines contributed anything of a positive nature, during the parties’ long relationship with one another. As such, she cannot conceive that he has any entitlement to any portion of the capital represented by Suburb C. As such, at the present time, she is not able to provide any lateral solutions to the problem which the case throws up. Certainly, she has not provided any evidence in this regard.
Ms Easton was not capable of making any concession favourable to Mr Hines and views him through a prism of hostility, which distorts her perception of what occurred during the parties’ relationship, particularly in financial terms and vis-à-vis other non-financial contributions.
Ms Easton is highly suspicious of Mr Hines and has consistently characterised him, throughout these proceedings, as a deceitful and manipulative person, particularly in respect of financial issues. As previously indicated, the evidence of this deceit was characterised by two major factors:
·The monies withdrawn from his superannuation fund; and
·An analysis of his account with N Bank, which she asserted demonstrated that Mr Hines had diverted significant sums towards the purchase of hobby equipment, primarily online, both before and after the parties separated.
I mean Ms Easton no disrespect. She is an intelligent person, who, with it would seem some outside assistance, had given a great deal of thought to the preparation of her case. Much of her affidavit takes the form of strident hyperbole and submission. It is also apparent that she has subjected Mr Hines’ credit union statements to intense scrutiny, which has had the effect of buttressing her suspicions of him.
The effect of her evidence and the arguments she has made is that there can only be one logical and fair outcome in these proceedings, which is that all relevant items of property should remain where they current lie. In this context, she has posited a series of mathematical calculations, which lead to this conclusion. In my view, these calculations are not soundly based in arithmetical terms and are better characterised as submissions that her contributions are in substances more significant than those of Mr Hines.
In this context, in my view, it is important to point out that the exercise I must follow in these proceedings is not an exercise of accounting, in which every item of expenditure can be tabulated and attributed to one party or the other and a final reckoning made. It is not sufficient to point to a withdrawal or series of withdrawals and assert that this alone is indicative of financial manipulation.
What, in my view, is striking in the case, is that Ms Easton has not been able to identify where specifically Mr Hines has allegedly secreted the funds allegedly siphoned off by him, other than it is in the form of hobby gear and other consumer durables, which he has purchased. None of these items have been formally valued.
In addition, there is no evidence to indicate that Mr Hines enjoys an extravagant lifestyle, which is in some way incongruent with his disclosed financial circumstances. He is under no obligation to live in a state of suspended financial animation whilst these proceeding are determined.
In addition, in my assessment, this is not a case which raises issues regarding a failure to make a proper disclosure of financial information, which necessitates the court taking robust action to correct the prospect of one of the parties concerned being disadvantaged by such a breach.[11]
[11] See Weir & Weir (1993) FLC 92-338.
The fact is that Ms Easton’s submission depends on her analysis of the statements which Mr Hines disclosed to her. She did not elect to question him about these statements. Rather, as I will expand upon in greater detail in due course, the evidence indicates that Mr Hines is a person who has been frank about his circumstances and who lives within the scope of a modest and readily discernible income.
When I come to detail the legal principles applicable to add backs, it will become clear that great care is needed before any notional asset, being one that does not actually physically exist, being treated, by the court, as if it does. In general terms, whether the court does take the step of adding back such an asset is to be determined whether it is fair to do so.
In addition, the strict dollar for dollar add back of expenditure is to be regarded as the exception rather than the rule. In this context, a number of cases have indicated that it is usually preferable that the court adopts a holistic approach to how post-separation expenditure is treated in pursuit of its primary objective to ensure a just and equitable outcome is achieved for the parties concerned.
Mr Hines presented as a gentle and considered witness, who was dismayed by the hostility which these proceedings have precipitated from Ms Easton for him. He made concessions about his conduct during the parties’ relationship, conceding that he had made disparaging and hurtful comments about Ms Easton’s mental health, which he should not have done.
He also accepted that he could have been a better partner and parent and had withdrawn, into his hobbies, from time to time. However, he refuted any suggestion that he had not been involved with X and Y and had been the totally absent and selfish parent as described by Ms Easton. He deposed that he had assisted with house duties and maintenance around the home and had looked after the children from time to time. It was clear to me, from his evidence, that he deeply loves both children and is gravely concerned at the impact of these highly vitriolic proceedings on their emotional well-being, particular Y.
Mr Hines disputed the allegation that he had secreted large sums of money in the form of hobby gear purchased from the UK, although he did agree that he did buy and sell online and it was top end merchandise. In addition, he deposed that he had only done what had been recommended by his financial planner, in converting his superannuation into an income stream, which he had accessed to avoid incurring tax and had saved for future living expenses, as well as using some of it to fund recurrent living expenses.
Essentially, it is his position that his various purchases of hobby gear cannot be regarded as being extraordinarily extravagant in nature. More importantly, it is his position that the larger proportion of his withdrawn superannuation remains securely sequestered and disclosed to Ms Easton in his Credit Union account and what has been spent was legitimately done so in respect of recurrent living expenses.
As had been his position during the extension of time aspect of the case, it remains his case that he would have wanted to reconcile with Ms Easton (and still wished to do so) but he had regretfully reached the conclusion that this was impossible. In this context, he spoke highly of Ms Easton’s attributes as a health care worker, who was adept at dealing with extraordinarily challenging patients and his admiration and appreciation for her efforts as a parent.
He did not present as a vengeful or angry person. Rather, he was dismayed that, if the court acceded to Ms Easton’s position, it would mean that his relationship with Ms Easton and all it had produced, would in effect, to use his own words, have counted for nothing. Given the importance of the relationship for him, from his perspective, it would be axiomatically unjust and unfair for his contributions to effectively come to nought.
In addition, in my estimation, Mr Hines was candid about his present living circumstances with his mother. He did not indicate that this was a difficult and unpleasant situation for him. To the contrary, he deposed to the satisfaction he gained from caring for his mother, whom he said had taken such good care of him, when he had been a child.
Given these findings, I assess Mr Hines to be an honest and reliable witness, who could provide an objective and accurate account of what occurred during the parties’ relationship and afterwards, including in respect of his levels of personal expenditure, in a general sense. On balance, I find him to be the more reliable witness overall, particularly in respect of how the parties’ contributions are to be assessed.
In contrast, Ms Easton presented as a person driven by her emotions. Of course, this is understandable given the precariousness that the outcome of these proceedings has the potential to intensify. However, her evidence seemed to me to lack objectivity and her calculations seemed to me to lack a rational base.
Mr Hines did not present as unsympathetic to Ms Easton in anyway. Rather given the length and significance of the parties’ relationship to him, from his perspective, it would be a grave injustice, if his significant contributions – both financial and otherwise – were either totally overlooked by the court or discounted because of its understandable wish to ensure that Ms Easton was able to retain the Suburb C property.
In all these circumstances, it is Mr Hines’ contention that his most recently advanced proposal is the one most closely calibrated and considered to bring an equitable end to the parties long financial involvement with one another and is the one least catastrophic to Ms Easton overall, whilst maintaining a level of equity for him.
At the end of the day, it is my finding, that the relationship between the parties was highly significant to each of them and during its not insignificant length, they worked as partners and pooled their resources for the greater good of their family. As such, each made many varied and myriad contributions which benefited the other partner and their children.
Before leaving the topic of evidence, in a general sense, it is important to note the absence of any evidence whatsoever regarding two matters which are, in my view, highly relevant to how the court is to approach its assessment of the countervailing section 90SF(3) factors in this case and, in this context, what should be the mix of assets and financial resources distributed to each of the parties. These factors are as follows:
·The value, even in approximate terms of Ms K’s property; and
·The existence or otherwise of any borrowing capacity on Ms Easton’s part and whether she has made any overtures to a commercial lender or a friend or relative.
CHRONOLOGY
Both parties were working when they commenced their relationship in 1998. I have not been advised as to what was Ms Easton’s previous line of work. As previously indicated, the most significant item of property, relevant to these proceedings – the property at Suburb C – was purchased at an early stage of the relationship,
In her affidavit, Ms Easton consistently refers to the property as her house. In my view, nothing significant turns on the fact that it was registered in her sole name. This occurred to secure government assistance, nothing more. The parties now disagree about how much each initially put into the properties purchase.
Mr Hines deposes that he had a sum of $12,000.00, from the settlement of property issues from his first marriage. Ms Easton accepts that this was the case, but the amount was tempered by the fact that he also had a loan of around $4,000.00 at the same time. It is also her evidence that she had her own savings of $10,000.00.
Mr Hines also deposed that he had a motor vehicle, household effects and some tools of modest value. No doubt Ms Easton also had items of personal property. In my view, these are issues which are lost in the mists of time and have no great significance at this juncture. This is not a case in which one party’s prior relationship capital backing is a factor which needs to be given some form of special recognition in the outcome of these proceedings.[12]
[12] Pierce & Pierce (1999) FLC 92-844 at 85,881.
In my view, how the parties approached the acquisition of the Suburb C property is to be regarded as largely conventional in nature. Its purchase was a joint enterprise. The same can be said in respect of how the parties approached the duties arising from having a mortgage and having made the joint decision to start a family.
This decision was made at an early stage. Ms Easton left the formal workforce shortly prior to X’s birth in 2000. Thereafter, there can be no doubt that the parties divided their responsibilities along traditional – for want of a better word – lines, with Mr Hines being the family’s sole breadwinner and Ms Easton being an exemplary parent and homemaker. In this sense, the parties’ roles complement one and another and each was essential to the well-being and security of the family as a whole.
Ms Easton commenced her studies to become a health care worker, in 2007, which she completed in 2009. She began work shortly afterwards, after a period of approximately ten years out of the formal workforce. It would seem to be the case that she has elected to continue to work, on a part-time basis, in the period since, notwithstanding her enthusiasm for her position, but for reasons relating to her health.
In this context, Ms Easton has provided a medical report prepared by her long-standing general practitioner, Dr O, who reports that she has suffered a medical condition throughout her adult life, which has been treated with medication. The side effects of this medication include fatigue. Dr O characterises the pain suffered by Ms Easton to be debilitating and confirms she has had an increase in acute symptoms since her menopause.
In addition, Dr O reports that Ms Easton has been diagnosed by him as suffering from major depression since 2004, associated with insomnia, which was initially successfully treated with medication but has been ceased because of concerns regarding potential dependency. This has led to periodic relapse.
In the conclusion to his brief report, Dr O writes as follows:
[Ms Easton] has had to reduce her working hours as a [health care worker] from full-time to part-time due to the amount of shifts she has been unable to work due to an increase in both [her medical condition] and periodic bouts of insomnia. These conditions greatly reduce her ability to increase her hours. In addition, she is not always able to meet her current part-time hours (40 hours per fortnight) causing her additional stress.
[Ms Easton] is extremely passionate about her role as a [health care worker] and is a valuable member of staff. [Ms Easton], however, has plans to retire between the ages of 60 -63 after a long and rewarding career.[13]
[13] See Annexure 5 to affidavit of Ms Easton filed 25 February 2024.
Dr O was not required to attend court for cross-examination. I accept the contents of his report. Although, I am not medically qualified, my experience of Ms Easton is of a person who is not particularly emotionally robust and who is likely to be a worrier or someone who ruminates on things.
Dr Os’ report is consistent with Ms Easton’s own evidence that she doubts she will be able to remain in the paid workforce for more than the next two or three years. Necessarily, this is a significant aspect of the evidence.
In 2012, Ms Easton received a bequest of $40,000.00 from her late mother’s estate. A significant portion of this amount ($24,000.00) was used to pay for the whole family to have a holiday in the UK. The remainder was used for the construction of a bedroom. I accept that this is likely to have added to the value of the property and is to be approached as a financial contribution attributable to Ms Easton.
However, I do not accept Ms Easton’s submission that, given the increase in value of properties in Adelaide generally over the twelve years since the bedroom extension was made and her assertion that because the home became a four bedroom property and so more desirable to the market generally, the addition has increased the value of the property by at least $40,000.00 and therefore to use her phraseology in indexed terms, she should be taken to have contributed a sum equivalent to $80,000.00 and therefore should be allocated a 7.35% adjustment in her favour.[14]
[14] See affidavit of Ms Easton filed 25 February 2024 at [70].
I confess I do not fully understand this analysis or her similar formulation of her assessment in respect of the alleged increase in the property’s value in the period post separation, which she asserts has been in the vicinity of 68% since mid-2020. In addition, I do not consider that her approach is in keeping with any holistic approach to the assessment of contributions within the context of a long-term de facto relationship.
In addition, if I was to adopt such an approach, I would be fearful that it would have the effect of discounting Mr Hines’ contributions towards maintaining the mortgage through the first twenty years or so of its acquisition. In simple terms, without Mr Hines’ contributions between 1998 and 2020, there would have been no property to increase in value. In these circumstances, it is my view that Ms Easton’s submission is misconceived. Both parties are entitled to benefit from the inflationary forces in the Adelaide property market.
In her affidavit, Ms Easton has been critical of the fact that the Suburb C property is currently in a poor state of repair needing painting and replaced guttering. She attributes this state of affairs to omissions attributable to Mr Hines, who given his employment as a tradesperson should have been well placed to clean out the gutters, and maintain the house.[15]
[15] See affidavit of Ms Easton filed 25 February 2024 at [64].
Mr Hines has not specifically responded to these allegations, which were not put to him in cross-examination. In his affidavit, he simply deposes as follows:
I assisted with house duties, including cleaning and helped look after the children when I was not working.
I contributed my labour to the improvements to the home.
I have also regularly attended to maintenance around the home during our relationship and post separation.[16]
[16] See affidavit of Mr Hines filed 6 March 2024 at [70] – [73].
As is apparent, the positions of the parties as to what occurred during much of their relationship are polarised to an extreme degree. In the absence of any evidence, from some independently minded and objective observer of the family, the degree, if any of dereliction of the parties in manner in which they approached issues to do with the maintenance of their home, are impossible to resolve in any definitive manner.
In addition, I consider that I must be cautious about approaching the issue in a manner which may be viewed as inherently sexist, namely men in relationships are responsible for home maintenance and if they do not discharge such responsibilities, they should be subject to some form of penalisation. In my view, it is a reasonable inference for the court to draw that whatever state the home was in, in general terms, it was acceptable to both of them.
In any event, as indicated above, in the context of a twenty-three year relationship, which produced two children in a suburban setting, no matter how unhappy and unsatisfactory that relationship was, it seems to me to be improbable that there was such a sharp dichotomy in how the parties divided responsibilities within their domestic setting as described by Ms Easton, with she, in effect, doing everything and he nothing.
More significantly, it appears to be the case that, by dint of his superior wage and more consistent engagement with the paid workforce, Mr Hines made the greater financial contributions to paying down the mortgage and other recurrent bills relating to the Suburb C property. This must be regarded as a significant contribution within the overall scope of the case.
Issues regarding the parties’ post-separation financial contributions are highly controversial. It is Ms Easton’s position that these factors greatly favour her and should result in her being provided with a further percentage allowance of 15.3% as a consequence of mortgage payments made by her; payments on the solar panel loan; replacement of a hot water system; payments of rates and insurance; and maintenance expenses generally. She calculates these payments to total just over $37,000.00 over the nearly four years which have elapsed since separation.
In addition, it is her evidence that she was required to make these payments out of a significantly lesser wage than Mr Hines’ and further her work situation, due to the pandemic emergency, was significantly more onerous than his. This, in turn, caused a deterioration in her mental health. Essentially, Mr Hines was able to work on as normal, while she struggled. As previously indicated, in this context, it is her view that Mr Hines was subjecting her to financial bullying, which the court in good conscience cannot endorse.
Mr Hines is not in a position to refute that fact that Ms Easton did, indeed, take on a greater share of the financial burden relating to the Suburb C property, in the period after separation. At the same time, she had the benefit of being able to live in the property, whilst Mr Hines had to move, albeit he moved in with his mother. It is the effect of his evidence that he left the former family home with nothing but a suitcase of clothes and his car, leaving Ms Easton with the contents of the home. Given the nature of such things, separation is often a brutal process.
It is also Mr Hines’ evidence that he did make some direct financial contributions in the period post separation. He provided private health insurance for Y until late 2023, when Ms Easton changed her policy. He made some modest contributions to the mortgage and paid approximately $5,500.00 towards the solar panel debt. The effect of his evidence is that he was willing to remain involved with assisting the family, but Ms Easton was inclined to rebuff his efforts in this regard.
However, in general terms, I accept that Ms Easton’s post separation contributions were superior to those of Mr Hines, given the overall circumstances which arose following Mr Hines’ vacation of the Suburb C property.
It is Mr Hines’ evidence that it was his long-standing and disclosed intention to retire when he reached sixty-five years of age. Although the age at which a person can apply for an aged pension has been increased to the age of sixty-seven, in my view, there is still a community expectation that sixty-five is an appropriate age at which able bodied individuals can normally contemplate retirement from full time employment. As such, I do not consider that Mr Hines can be criticised for his decision in this regard.
Mr Hines took financial advice as to the best way to approach his retirement, which entailed him being able to withdraw an annual lump sum from his superannuation, which would not be subject to tax, a process which he has deposed commenced from 2021 onwards.
Ms Easton has provided Mr Hines’ bank account statement which shows that the amounts in question have been withdrawn from 2018 onwards, which was prior to separation. On my calculation, the sums involved have been in the vicinity of $115,000.00.[17] In her affidavit, Ms Easton deposes that an analysis of the statements establishes Mr Hines wasteful spending of his superannuation funds prior to his retirement.
[17] See Annexure 3 to affidavit of Ms Easton filed 25 February 2024.
Ms Easton did not cross-examine Mr Hines specifically about the statements. It is his evidence that the monies advanced prior to separation, apart from some hobby equipment purchases, went to joint family expenditure. Thereafter, his evidence is that he has utilised the monies for his living expenses or saved it for his future living expenses for the period between his retirement and when he reaches sixty-seven years of age. At present he has savings of $50,294.00, which he asserted is sourced from the superannuation advances.
Ms Easton is suspicious that this is not equivalent to her calculation of the total amounts of the advances and given that Mr Hines was working until recently, he had no need to access the monies to fund his living expenses, which she would assert are in any event minimal. In these circumstances, it is her contention that the only logical explanation for the discrepancy is he has hidden the funds or wasted them. Either way, she suspects conversion into hobby gear.
As a consequence of these matters, she seeks the full add back of the superannuation advances, which Mr Hines resists. He asserts a significant proportion of the advances were allocated to joint living expenses, prior to separation, with a modest level of hobby gear purchases and after separation, he mingled the advances with his own funds and used them to pay for recurrent living expenses, with a large proportion still being extant and so directly referrable to these proceedings.
Mr Hines has been legally represented throughout the proceedings. Ms Easton has not. As at July 2023, Mr Hines had incurred costs in an amount of approximately $10,500.00. His costs for trial were anticipated to be in the vicinity of $30,000.00. It is Ms Easton’s position that these legal fees can have only come from joint assets and should be returned dollar for dollar to the asset pool. I will return to the various controversies surrounding add backs, in greater detail, when I come to the legal principles applicable to them.
APPLICABLE LEGAL PROVISIONS
Pursuant to section 39B of the Family Law Act, this court has jurisdiction conferred upon it in respect of what are termed de facto financial causes. This expression is defined by section 4 to include proceedings in respect of the distribution, after the breakdown of the de facto relationship, of the property of the parties or either of them.
Part VIIIAB of the Family Law Act deals with financial matters relating to de facto relationships. Pursuant to section 90SM(1) the court is authorised to make such order as it considers appropriate in order to alter the interest of the parties to a de facto relationship in relevant property.
The expression property is defined in section 4(1) in relation to the parties to a marriage or either of them as meaning …property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.
Pursuant to section 90SM(3) the court is actively prevented from making an order altering proprietorial interests, unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing. This follows from the use of the prohibitive words must not in the relevant section.
This is the main thrust of Ms Easton’s case. As indicated above, it is her submission that it would be fundamentally inequitable and unfair to her, in all the circumstances of the case, for the court to make an order directing the sale of the Suburb C property, which will render her potentially homeless.
The application of the equivalent section in the Act, pertaining to applications in respect of marital as opposed to de facto property matters, is section 79(2), which was definitively considered by the High Court in Stanford v Stanford.[18]
[18] Stanford v Stanford [2012] HCA 52.
Before turning to Stanford in greater detail, it is useful to set out in general terms the process which the court is required to follow in dividing de facto property and delineate in this context the areas of controversy between the parties.
The process to be followed for the division of the parties’ property is well-established by law.[19] The relevant legal principles are primarily contained in sections 90SM(4) and 90SF(3) of the Family Law Act. I am required to follow a number of specific steps.
[19] See Lee Steere v Lee Steere (1985) FLC 91-626; Ferraro v Ferraro (1993) FLC 92-335;
In the first step, I must ascertain what are the parties’ assets and liabilities available to be divided between them. The normal rule is that those assets are to be determined as at the date of trial.[20] However, as indicated above, the court is not obliged to include an uncertain or imprecise liability.
[20] See Wardman & Hudson (1978) FLC 90-466; and Biltoft & Biltoft (1995) FLC 92-614.
As indicated above, the chief area of controversy arising under the first step turns on whether there should be a strict add-back, on a dollar-for-dollar basis of the sums identified by Ms Easton arising from Mr Hines’ superannuation. In this context, as has already been noted, it is still open to the court to approach the issue under the provisions of the third step, in a more general way, if this is considered just and equitable.
The parties also own a motor vehicle each. These have not been idiosyncratically valued. Mr Hines has provided general valuations of equivalent motor car models online. In addition, as previously indicated there are no formal valuations of the household contents of Suburb C or Mr Hines’ hobby gear. Otherwise, the value of superannuation and the home are definitively established.
In the second step, I must ascertain the contributions, which each party has made towards the pool of assets, as I have found them, following the first step. Contributions fall into two broad categories.
The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the de facto relationship to the acquisition, conservation or improvement of any of the property of that relationship.
The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent.”[21]
[21] See Family Law Act section 90SM(4)(c).
It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.
At this second step stage, the task set for me requires the balance and comparison of a multiplicity of contributions, many of which are necessarily different in nature, within the framework of a de facto relationship. Many contributions in a de facto relationship, such as being a homemaker, do not result in the direct acquisition of assets. They are also difficult to value in absolute dollar terms.
In contrast, the monies contributed by a wage earner are easier to quantify. However, these difficulties do not absolve the court of its obligation to undertake the required assessment of contributions. The court’s discretion is a wide one but must be exercised judicially.
As previously indicated, it is Ms Easton’s contention that her contributions, both in a financial and non-financial manner, particularly in the post-separation period dwarf those of Mr Hines by many degrees of magnitude. Mr Hines’ view is that the parties’ various contributions are, to all intents and purposes, essentially the same.
The third step involves the assessment of the parties’ prospective needs, by reference to the factors set out in section 90SF(3) of the Family Law Act. Pursuant to section 90SF(3)(r), the court is entitled to take into account any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account.
It is Ms Easton’s case that the fact that Mr Hines is living with his mother and has an expectation that he will inherit her estate, is both a financial resource for the purposes of section 90SF(3)(b) and a circumstance, which the justice of the case requires to be taken into account.
The High Court in Hall and Hall[22] set out the position, in the different context of a discretionary trust, in regard to what can be taken to be a financial resources in the following terms:
The reference to “financial resources” in the context of s 75(2)(b) has long been correctly interpreted by the Family Court to refer to “a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency”. The requirement that the financial resource be that “of” a party no doubt implies that the source of financial support be one on which the party is capable of drawing. It must involve something more than an expectation of benevolence on the part of another. But it goes too far to suggest that the party must control the source of financial support. Thus, it has long correctly been recognised that a nominated beneficiary of a discretionary trust, who has no control over the trustee but who has a reasonable expectation that the trustee’s discretion will be exercised in his or her favour, has a financial resource to the extent of that expectation.
[22] Hall v Hall (2016) 257 CLR 490 at 506–507.
In the current matter, it would seem to me to be the case that although Mr Hines does not control his mother’s home, he can reasonably expect to live in it, at least whilst Ms K remains healthy. As he is presently, I accept that Mr Hines is secure in his current accommodation, and this provides him with a resource which is valuable to him. It is also subject to the quid pro quo, with which he is happy to concur, that he provides his mother’s on-going care.
Without this resource, Mr Hines would have to obtain alternative accommodation for himself, which could realistically be expected to be far more expensive than that which is provided by Ms K’s Suburb L property. A more problematic issue arises in respect of how the court should approach any expectancy which Mr Hines may have that he will inherit the property at some stage in the future or otherwise be the beneficiary of his mother’s estate.
In White & Tulloch & White[23] the Full Court indicated that there can be no absolute rule as to how the court should approach anticipated inheritance and each case must depend on its own facts. Ultimately, the approach to be taken was a question of fact and degree. Such cases falling on a continuum, which ranged from cases, on the one hand, where there was a significant estate and an obvious connection to section 75(2) factors where it would be shutting one’s eyes to realities to treat that as irrelevant to on the other hand:
… the bald assertion that one of the parties has an elderly relative who has property and is or is likely to benefit that party is so speculative that it would be inappropriate to contemplate it as relevant in a s.79 determination, it being too remote to affect the justice and equity of the case in any worthwhile way.
[23] White & Tulloch & White (1995) FLC 92-640 at 82,464.
The issue of how the court was to determine where each individual case fell on such a spectrum was discussed by the majority of the Full Court (Lindenmayer and Finn JJ) in De Angelis v De Angelis (“De Angelis”).[24] In the case, it was noted that most of the criteria to be considered by the court in section 90SF(3) are concerned with events in the future and thus are by their nature speculative.
[24] De Angelis v De Angelis (2003) FLC 93-133 at 72,246.
Necessarily, this must be the case in the current matter. It is unknowable what will be the duration of Ms K’s life and whether she will suffer any deterioration to her health of such severity that it will have significant implications for the manner in which her care and accommodation are to be provided and how these are to be funded. It is also possible that she may fall out with her son – though this seems improbable to me.
However, the inherent nature of such speculations does not make the considerations relating to them irrelevant. The weight to be accorded to them being determined by the court’s assessment of all relevant circumstances and its determination of what is just and equitable. Every case involving a prospective inheritance must be approached idiosyncratically. In De Angelis the Full Court, in respect of the fact prevailing in that case, said as follows:
The question therefore has to be asked whether, in the present case, it would be just and equitable to the husband for the Court to have ignored the probability that, in what could well be [a] very short period of time (given the ages of her aunt and mother), the wife could well be the owner of two properties having a combined value of almost the same amount as the value of the parties' property currently available for distribution, and particularly in circumstances where the husband had been found to have done substantial improvement and maintenance work on both properties?
We consider that it would have been unjust to the husband to ignore this matter even if it was categorised only as a possibility and not a probability.
…
It is true that the wife's mother may change her will again (particularly bearing in mind her history in this regard); it is true that the parties' son may challenge, and successfully challenge, the will of the aunt; it is true that changes in social security law, or the costs of maintaining the aunt or the mother and/or their properties may ultimately erode the significant equity which they current have in their properties … but it is also true that within the very near future, the wife may own two properties totalling in value close to half a million dollars...[25]
[25] De Angelis v De Angelis (2003) FLC 93-133 at 78,246 – 78,247.
In my view, such provisos attach to the current matter. However, the fact remains Ms K is an elderly person; she is on good terms with her son, who is her voluntary carer; she owns her home; and most significantly Mr Hines is an only child. In these circumstances, I consider that it would be unjust for the court to ignore this issue notwithstanding the inherent speculative nature of what will be the amount and nature of Mr Hines’ inheritance and when it will occur.
Finally, in determining what order the court should make under section 90SM, the court must be satisfied that in all the circumstances, it is just and equitable to make the relevant orders. Overall, it is the justice and equity of the actual orders that the court must consider.[26]
[26] See Russell & Russell [1999] FamCA 1875 at [80].
Accordingly, the fourth step is for the court to take a step back and examine whether the orders it proposes are just and equitable. These considerations must also inform each of the preceding steps.[27]
[27] See Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39] and Bevan & Bevan [2013] FamCAFC 116 at [60].
The “overriding requirement” of section 90SM is that considerations of justice and equity should inform each step of the process. The exercise I must undertake is not a “process of social engineering”[28] or of equalisation of assets or financial resources. Nor, as I have previously observed, is it a process to be informed by considerations of fault or blame.
[28] See Waters & Jurek (1995) FLC 92-635 at 82,376.
I am now required to consider the various matters set out in section 90SF(3), and in particular to consider whether any further adjustment should be made in favour of either party. The section 90SF(3) factors are mainly, but not only, prospective in nature.
Paragraph (a) – Mr Hines is sixty-five years of age. Traditionally, this was the age at which the aged pension began, in Australia, and those who had hitherto been engaged in physical labour to earn their livelihood could honourably retire from the workforce permanently at this stage of life.
The raising of the age at which a person can receive an aged pension, together with improvements in life expectancy and a gradual change in community expectations, including demographic ones, have, in my view, softened these general assumptions.
The Age Discrimination Act 2004 (Cth) has, amongst its various objects, the elimination of discrimination on the ground of age and to provide assistance to the community to respond to demographic change by removing barriers to older people participating in society, particularly in the workforce.[58]
[58] Age Discrimination Act 2004 (Cth) s 3(e)(i).
In addition, the inauguration, by the Commonwealth Government, from the early 1990’s onwards, of schemes of compulsory superannuation, which mandated employers to pay a fixed percentage of their employees’ salary into superannuation, which could not be accessed until certain specified events occurred, has also changed community expectations in respect how and when retirement should occur and whether it should be marked by a mix of part-time work.
Ms Easton has recently turned fifty-eight years of age. In purely theoretical terms, there would appear to be no barrier to her continuing to work for at least the next seven or eight years in an area of work, health care, which she relishes and for which she has a great deal of aptitude. It would appear to me to be the case, regardless of the lack of expert evidence, that there will be a demand for skilled health care workers, willing to work in the challenging area of public health, for the indefinite future.
The same could be said of Mr Hines. In purely legal terms, he could continue in some form of paid work and, indeed, he acknowledges that his former supervisor has explored with him the possibility of some form of part-time work in future for him. At this stage, he is not interested in pursuing such an opportunity, being focussed on his mother’s care and having no current need to obtain rented accommodation for himself.
No doubt, in his mid-sixties, he is not as resilient, as he once was, in his earlier life, but in general terms, there is no specific medical evidence to indicate that he does not have some capacity to engage in the paid workforce. It would seem to me that his skills too are likely to retain a currency for the foreseeable future, particular at a time when there is a general demand for skilled workers.
It is not the role of the court to dictate to any individual, if and when, he or she should retire. These must remain personal choices dictated by idiosyncratic circumstances and preferences. Some individuals relish work; others disdain it. In the old cliché some live to work and others work to live.
My impression is that Mr Hines sees himself in the latter category. He cannot be criticised for this. However, in a case like the present one, involving a small property pool, the employment decisions of each of the parties concerned must have ramifications for the other and, as such, have implications for what is a just and equitable outcome. In blunt terms, financial necessity may dictate a prolongation of one’s working life, if one desires a particular level of security in later life.
Essentially, unpalatable as it may be for her, if Ms Easton wishes to retain the Suburb C property, she may have no alternative other than to continue to work longer than she would have otherwise wished to do so, particularly whilst she and Mr Hines were a couple and could pool their superannuation and share the real property, which they had acquired through their joint efforts over many years. However, with their separation, a new paradigm has arisen, which necessarily has restricted the choices realistically open to her.
In this difficult and challenging context, I must turn to the evidence provided by Dr O in respect of Ms Easton’s current medical situation and its implications for her capacity to remain in the workforce for any period longer than the next two to three years, due to her medical condition and depression. I am not in a position to ignore this evidence. However, it is the case that Ms Easton has suffered from a medical condition for the majority of her life, albeit with a great level of recurrence since her menopause and has suffered from depression for the past twenty years.
As such, these conditions, serious as they are, have not prevented her from continuing to engage in the work, which she loves, as a health care worker. I concede that whilst it cannot be predicted with any degree of certainty whether Ms Easton’s health will deteriorate dramatically in the next few years, it cannot also be determined that, with the resolution of these proceedings, when coupled with the need to retain the Suburb C property, that through financial necessity, she will continue to work until her late sixties.
In these circumstances, in my view, it would be fundamentally unfair to Mr Hines, that his entitlements, resting on the court’s calculation of his contribution-based entitlements, should be dramatically reduced on the basis of an acceptance that it is not possible for Ms Easton to continue on in her current chosen form of employment.
Paragraph (b) – The above considerations naturally segue into and overlap with issues to do with the income, property and financial resources of each of the parties, at the present time and the implications of these considerations for what is just and equitable.
At present, Ms Easton does have an income, albeit a modest one. She has access to some savings. How these were acquired is not clear. My impression is that she has a capacity to live very frugally indeed. In this context, it is her understandable preference to protect herself from exposure to a significant and fixed expense against which she would have limited protection, namely having to rent accommodation, for herself, perhaps for the indefinite future, in the private market.
It is clear to me that the clear rationale for how she has mounted her case is to secure the Suburb C property and the security which it represents for herself. However, at the present time, in my assessment, the only approach which she has advocated, on her behalf, is that the court should, in effect, negate the bulk of Mr Hines’ contributions. I do not consider that this can be considered a just and equitable outcome.
Mr Hines, in my view, to his credit, is not unsympathetic to Ms Easton’s situation. He has presented some form of solution to the problem presented by the case, which would be that Ms Easton trades some of the security represented by her accrued superannuation for the form of security, which she prefers, namely that of bricks and mortar. In my assessment, it is difficult to have both. There must be a trade-off. However, at this juncture, the most significant omission, from her case, is her capacity to borrow.
Axiomatically, this must depend on the amount in question and the term of the loan. These factors will be influenced by her any necessary assessment of her capacity to service the loan, which in turn will be affected by her level of salary and how it is anticipated she will remain in the workforce. As previously indicated, although Ms Easton asserts otherwise, necessity may dictate a longer tenure for her in the workforce than she would otherwise prefer. Necessarily, it must be a case of needs must, notwithstanding the implicit harshness of such a statement.
In this context, I accept that she is far from robust, both physically and psychologically. The fact remains that she has been able to maintain her employment, albeit on a part-time basis, for approximately fifteen years, in an area of work which she enjoys and for which she has aptitude. In these circumstances, in my view, it would be imprudent for me to proceed on the basis that Ms Easton’s capacity to derive some form of income will necessarily and abruptly terminate in the next two to three years.
Although currently Mr Hines does not currently have an income, other than his lump sum superannuation payments of around $17,000.00 per annum, in my view, he retains the capacity to earn some form of income. More significantly, he is currently secure in his accommodation, which he enjoys at modest expense. He too seems to have a capacity to live frugally, funding his modest recurrent expenditure from his accrued savings. In all these circumstances, in my view, he is relatively secure in both financial and accommodation terms.
It is his case that this security is not open-ended and may come to end if his mother is compelled to sell her home to enter a nursing home, at some stage in the future. However, the evidence regarding this potential eventuality is unclear both in terms of how it would play out in logistical/financial terms for Ms K and whether it will happen in actuality.
In terms of the former, no evidence has been provided as to how Ms K may choose to approach the issue of paying for any future care she may require, which in turn will depend on the provider concerned and the type of care which she may need. In this context, it is the effect of Mr Hines’ evidence that he is prepared to keep caring for his mother, in her home, indefinitely.
It is Ms Easton’s submission that Mr Hines may be regarded as a protected person for the purposes of the Aged Care Act and his on-going occupation of the Suburb L property preserved. This may depend on whether he is in receipt of social security and the period for which he has provided care for his mother prior to her entering some form of residential aged care, which indeed may never, in fact occur.
In addition, if the sale does have to occur, its proceeds will not instantly evaporate. There will be some element of preserved capital and the erosion of the remainder will depend on the duration of the care to be provided to Ms K. Accordingly, to adopt the well-known phraseology of Mr Rumsfeld, the former United States Secretary of State, there are many known unknowns arising in this case.
I acknowledge that I have not been provided with a copy of Ms K will and it is open to her to change it at any stage. In addition, I know nothing about her overall financial circumstances, particularly the value of her home. What I do know is that Mr Hines is her only child, who presents as devoted to her care and, for her part, Ms K is content to have him in her home providing the care which she requires. On balance, it seems extremely unlikely that Ms K would not want to benefit her son, when ultimately she dies.
In these circumstances, in my view, it would be naïve for the court not to approach Mr Hines interest in his mother’s estate, given her age and the nature of the relationship between the two, as a significant form of financial resource, albeit one of uncertain quantum, to which Mr Hines will have access at some indefinite stage in the future. In my view, considerations of justice and equity dictate that it should be taken into account, in the current matter, given the holistic nature of the task conferred.
In addition, in my view, there is an inherent level of flexibility in Mr Hines’ current financial circumstances. Although I accept it is his prerogative to cease full time work and his decision to care for his mother is a laudable one, he does retain some capacity to earn an income, if his financial situation takes an unforeseen turn.
Paragraph (c) – this is not a relevant consideration.
Paragraph (d) – As I have already observed, it is my impression that each party has a capacity to live within their means. In purely legal terms, Ms Easton is not under any legal duty to support either X or Y.
Paragraph (e) – this is not a relevant consideration.
Paragraph (f) – each of the parties have reached the age at which they need to pay close attention to their respective needs in retirement. Given each of their current superannuation balances, it seems that each of them will be reliant on the Aged Pension, augmented by superannuation to fund their older age. Mr Hines most probably from 2025, when he turns sixty-seven.
Given his age, Mr Hines has a limited capacity to add to his superannuation. Ms Easton is better placed but is likely to remain a modest income earner with a limited capacity to contribute to superannuation. In any, as previously noted, it is implicit in the stance she has adopted in this case that her preference is for the security of accommodation in her retirement. In an ideal situation, each of the parties would have access to both such forms of financial security – a home and a reasonable amount of superannuation to augment the pension. This is not an ideal case.
Paragraph (g) – one inevitable consequence at the end of the majority of marriages and de facto relationships, is a drop in the standard of living of one or sometimes both the parties concerned. It is trite, but true nonetheless, that two households cannot usually live as comfortably as one. This is particularly so in cases in which there is only one piece of real property and limited superannuation.
These factors are present in the current matter, the difficulty of which is exacerbated by the ages of the parties concerned and the obvious fact that each of them has a finite amount of time to recoup financially after their devastating separation. What is important, in respect of this paragraph, is that any drop in living standards should not be borne disproportionately by one party.
In my assessment, neither party can be regarded as being in a strong overall position, given their respective ages and particular situation. In these circumstances, it is invidious for the court to undertake a comparison between them. However, this is necessary given the court’s responsibility to evaluate uncertain factors, in a holistic way.
It is evident to me that the parties focussed their joint efforts, over many years, to secure the Suburb C property. Accordingly, I accept its importance to Ms Easton as the bedrock of both her emotional and financial security, it will be devastating for her if it has to be realised. In contrast, it seems to me that Mr Hines has a modicum of security so far as his accommodation is concerned at his mother’s home. I take this into account.
Paragraphs (h), (i), (j), (k), (l), (m), (n), (o), (p) & (q) – in my view, it is not necessary for the court to make any specific reference to any of these considerations.
Paragraph (r) – this is catch-all consideration designed to ensure that no factor germane to considerations of justice and equity is overlooked by the court. In Ferguson & Ferguson[59] the Full Court of the Family Court held that section 75(2)(o) [the equivalent of section 90SF(3)(r)] was to be read ejusdem generis with the other matters listed in the section overall which enabled the court to bring into account conduct which has an economic significance in the parties’ dealing with each other or the property in dispute.
[59] See Ferguson & Ferguson (1978) FLC 90-500 at 77,607.
Since the parties separated, close to four years ago now, they have led increasingly divergent financial lives. Consequentially, this has led to them having different financial priorities and them allocating their fiscal resources in different ways. As I have already indicated, there was no requirement for the parties to live in a state of suspended financial animation until the issues raised in these proceedings had been definitively resolved.
In any event, in my view, neither party has made any relevant financial decision of such significance that it needs to be directly referenced in the proceedings, Mr Hines was entitled to retire from the permanent workforce, when he did and was entitled to access a portion of his superannuation, in the manner in which he elected to do so.
The most significant event which has occurred post separation is the fact that the parties now mutually agree that the de facto relationship between them is irrevocably over. As a consequence, Mr Hines has made arrangements for his on-going accommodation, which seem to be satisfactory to him and reasonably secure. As such, he is not likely to be subject to either the vagaries of either the private rental market or having to purchase a place to live, which will involve defrayal of a reasonable sum of capital and almost certainly the requirement to borrow a sum of money.
The same cannot be said for Ms Easton who, as a result of these proceedings, may face an uncertain future so far as her future accommodation is concerned, which in turn is likely to have significant implications for her overall sense of well-being. If Ms Easton is, in effect, evicted from private home ownership, given her age and level of financial backing, it is likely to be close to impossible for her to re-enter it.
Given the comparative security of Mr Hines in this regard, when coupled with the reasonably based expectation that he will inherit his mother’s estate, in my view, this must be a factor which significantly favours Ms Easton in any prospective sense. In my view, the potential disparity in accommodation security arising between the parties in the current matter is a factor which considerations of justice and equity dictate should be taken into account.
Paragraphs (s) & (t) – these considerations are not relevant.
CONCLUSIONS AND CONSTRUCTION OF FINAL ORDERS
In my view, in this extremely difficult case, an assessment of the overall factors arising under section 90SF(3) favours Ms Easton to some degree. The chief factors being her age; current limited income; and above all the almost certain deleterious consequences, in financial and emotional terms, of her having to vacate the parties' former family home.
In contrast, Mr Hines has accommodation security and the prospect of receiving some form of inheritance from his mother’s estate, uncertain though the quantum of this inheritance is and when it will vest on him. In the reasonably foreseeable future, he is secure and living comfortably within his modest budget, with the financial bulwark represented by his superannuation.
At the end of this process, the court must apply its various assessments to the assets it has identified. This is invariably done in percentage terms. However, percentages can be misleading. As Coleman J put it in Steinbrenner & Steinbrenner:[60]
Given the evaluation of contribution based entitlements inevitably moves from qualitative evaluation of contributions to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion, whether it be in the assessment of contributions in the matrimonial cause, assessment of damages in a personal injuries case, or determination of compensation in a land resumption case…
[60] See Steinbrenner & Steinbrenner [2008] FamCAFC 193 at [234].
I have reached the point of the judgment when I must make the required metaphorical leap from word and concepts to actual figures and items of property or to put it another way, from abstraction to what is concrete.
After all, it is all well and good to talk in percentages, so far as orders and outcomes are concerned. But what matters to the parties is what the orders mean to them in dollars and cents and what affect they have on their long-term plans and aspirations.
To start with figures, after considering the various section 90SF(3) factors in what I hope is a holistic and fair manner, I have concluded that they favour Ms Easton in an amount of around 11% leading me to conclude that a 61/39% division in her favour represents a just and equitable terms.
A more difficult task is to determine how that outcome is to be achieved in practical terms, given what is available to be divided and the individual circumstances of each party. Necessarily, as I pointed out at the commencement of these regrettably lengthy reasons, it is impossible that the constrained asset pool can provide a satisfactory outcome for all concerned. Ironically, the superficially most equitable outcome, namely sell the Suburb C property and divide the proceeds is likely to be inherently unfair to Ms Easton.
In my view, if the sale of the Suburb C property can be avoided, the sale of which will inevitably place Ms Easton into a state of accommodation insecurity, the court should do what is equitably open to it to achieve such an outcome.
At the same time, this discretion cannot be utilised in a cavalier fashion, which unfairly devalues the significant contributions made by Mr Hines over very many years. This would be fundamentally inequitable to him, regardless of the potentially deleterious consequence for Ms Easton.
A balance must be struck, which involves a carefully calibrated allocation of both actual assets and superannuation between the parties. Given the extent and make-up of the pool, it is impossible for each party to have an adequate supply of both. As I am at pains to point out, there must be a trade-off in this regard.
At this juncture, as a result of their idiosyncratic circumstances, it seems to me that Ms Easton has a greater need for the security provided by actual assets; whereas Mr Hines, who is currently retired from the workforce, has a greater need for the financial security represented by superannuation.
61% of the parties’ combined assets and superannuation pool ($929,757.26) is represented by the sum of $567,151.93 and 39% by the sum of $362,605.33. If, in notional terms, Ms Easton is to taken to have Suburb C ($550,000.00) her savings ($21,500.00); and her superannuation ($109,046.45); she hold assets and superannuation to the value of $680,546.45. Thus, to achieve the 61/39% division envisaged, it will be necessary for there to be some form of fiscal transfer from her to Mr Hines in an amount of $113,394.52.
A more difficult task is to assess what proportion of this sum should be represented by cash and what by a split from superannuation. As I have already indicated, I accept that Ms Easton requires both some level of financial preparedness for retirement and also accommodation security. Due to the constraints implicit in the parties’ current circumstances, she cannot necessarily have both. A compromise must be reached, which will be influenced by her clear preference for accommodation security, in the form of Suburb C.
After a great deal of thought, I propose that the cash component should be $90,000.00 and the superannuation split should be $23,394.52. It seems sensible that such a split should be made from the larger of Ms Easton’s two funds.
I appreciate that this outcome overall represents an uneasy trade-off, which is heightened by the lack of clarity regarding Ms Easton’s borrowing capacity. However, informing this trade-off is the fact that Ms Easton is in secure employment and has, more likely than not, some years of productive employment before her.
In this context, I emphasise her evident competency in her profession and relish for her job, in which she is well regarded. It may not have been her preference to work into her mid-sixties, but her situation may compel it, given her desire to retain the home. She is a frugal person and will have a significant level of equity in the house. Given her current level of saving, I am confident that she can secure the sum.
The major benefit of this outcome is that she will have the security of a home, which is her greatest need and will not have to search out an alternative source of accommodation or be beholden to the private rental market, quite possibly for the remainder of her life. Even if Ms Easton elects to pay only interest on the amount of the money she is required to pay Mr Hines, it will be far less than she could expect to pay for accommodation on the private rental market.
At the same time, she will remain in the housing market and it is more likely than not that the property will appreciate in value – though this cannot be guaranteed. Regardless, the equity in the property is likely to be her greatest source of financial security.
She will also retain some superannuation, to which she can add during the remainder of her working life, which she can utilise to augment any pension to which she will be entitled on her permanent retirement from the workforce. In my estimation, this is the most secure outcome available for her, in invidious circumstances, she does not result in an unfair discounting of Mr Hines obvious and significant contributions during the parties’ long relationship.
Clearly, if Ms Easton is unable to raise what I regard as an achievable sum, when compared to the value of the property, Suburb C will have to be sold to achieve the outcome stipulated. This would be a financial calamity for Ms Easton but, as I have endeavoured to explain, it would be inherently unfair and unjust if Mr Hines were to be denied his entitlements so that Ms Easton could retain the property in question.
Mr Hines will have a significant amount of cash and an increased superannuation balance, which will provide a buttress of support, whilst he pursues his own objectives, at the stage of life he has reached, namely permanent retirement from the workforce, prior to receiving the aged pension and a desire to provide care for his aged mother.
I appreciate that he does not own his accommodation. However, in the short to medium term, he has some level of security in this regard. For the reasons provided, in my view, it would be both unjust and illogical for the court to ignore that fact that the nature of his relationship with his mother is not anything other than a significant prospective financial resource for him.
On balance, in what are undoubtedly extremely challenging circumstances, I have come to the conclusion that the outcome which I propose represents a just and equitable finalisation of the parties’ financial relationship with one another.
For all these reasons the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding three hundred and seventeen (317) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Brown. Associate:
Dated: 3 May 2024
Clauson v Clauson (1995) FLC 92-595; and Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386.
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