Howitt and Howitt - [2008] FMCAfam 338

FEDERAL MAGISTRATES COURT OF AUSTRALIA

HOWITT & HOWITT

[2008] FMCAfam 338

FAMILY LAW – Property case – long marriage – mother qualified as [L] through support of father – contribution and s.75(2) issues considered.

Family Law Act 1975, s.75(2)

Applicant:

MR HOWITT

Respondent:

MS HOWITT

File Number:

DGC 3022 of 2007

Judgment of:

Burchardt FM

Hearing date:

20 March 2008

Date of Last Submission:

20 March 2008

Delivered at:

Melbourne

Delivered on:

16 April 2008

REPRESENTATION

Counsel for the Applicant:

Mr R.P. Hutchins

Solicitors for the Applicant:

Meier Denison Guymer Pty Ltd

Counsel for the Respondent:

Ms M.L. Smallwood

Solicitors for the Respondent:

White Cleland Pty

ORDERS

THAT the husband pay to the wife the sum of $165,012.00 (“the payment”) on or before the 2^nd day of June 2008 (“the date”);
THAT contemporaneously with the payment:
(a)the wife do all such acts and things and sign all such documents as may be required to transfer to the husband at the expense of the wife all her right, title and interest in the real property situate at and known as Property D;
(b)being the whole of the land more particularly described in Certificate of Title Volume [X] Folio [X] (“the real property”);
(c)the husband indemnify the wife against all payments and liability pursuant to the mortgage registered number [A] secured against the property, securing NAB Flex Plus loan number [X] and Choice Package Offset Home loan number [Y] (“the mortgage”) and all apportionable rates, taxes and outgoings of or with respect to the real property of whatsoever nature and kind.
THAT in the event that the whole of the payment has not been made by the date then the husband sign all documents and do all things necessary to transfer to the wife the real property to be held on trust of sale (“the sale”) the real property be forthwith sold altogether out of Court (“the sale”) and upon completion of the sale, the proceeds of sale be applied:
(a)first to pay all costs, commissions and expenses of (the said trust transfer and) the sale;
(b)secondly to discharge the mortgage and any other encumbrance affecting the real property;
(c)thirdly so much as is necessary to each of the parties as to ensure a 60/40 split of the assets of the parties based upon a mortgage pay out of $237,000.00.
THAT pending the payment or completion of sale:
(a)the husband have the sole right to occupy the real property and during such right of occupation the husband pay all instalments pursuant to the mortgage and all rates and taxes and like apportionable outgoings of the real property as they fall due;
(b)the parties hold their respective interests in the real property upon trust pursuant to these orders; and
(c)neither party encumber the real property without the consent in writing of the other party.
THAT the husband be liable for and indemnify the wife against all payments in respect of all payments due in regard of NAB Flexi Plus loan number [X] and Choice Package Offset Home loan number [Z].
THAT unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) owned by or in the possession of such party as at the date of these orders (the furniture, personal possessions, and like chattels in the property being deemed to be in the possession of the husband and wife.
(b)insurance policies remain the sole property of the owner named thereon/in.
(c)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
(d)any joint tenancy of the parties in any real or personal estate is hereby expressly served.

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

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE

DGC 3022 of 2007

MR HOWITT

Applicant

And

MS HOWITT

Respondent

REASONS FOR JUDGMENT

This is a property dispute between a couple who were married for over 25 years.
The parties married and started to live together in 1980 and separated in 2005. They are now divorced.
The parties had five children, all of whom, apart from J who was born in 1990, are now over 18.
Three of the other sons live with the father at the former matrimonial home at Property D. Mr Howitt says, and I accept, that two of them work for the same firm that employs him.

The asset pool

There is no issue about the size of the pool. Exhibit A1 is an agreed summary of assets, liabilities and superannuation, albeit that it was prepared originally by Mr Howitt.
That document shows that the former matrimonial home is worth $725,000.00 but has a mortgage attached to it of just over $196,000.00.
There is additionally a second mortgage in the sum of $41,000.00 over the former matrimonial home. So that the net pool is $643,736.00.
Apart from that, the parties own cars of roughly commensurate value. Mr Howitt owns some firearms and tools of trade, which are collectively worth $6,800.00. The superannuation of the parties is $41,562.00 to Mr Howitt and $77,555.00 to Ms Howitt.

Contribution

Much of the argument in the case turned on the question of contribution.
It is common cause that at the start of the marriage Mr Howitt owned a vacant block of land at Property C. It was fully paid off prior to the marriage. Mr Howitt has deposed that his estimate of the current value of that block of land is approximately $350,000.00. That estimate was not the subject of cross‑examination, but I note that Mr Howitt is not a qualified valuer. On any view, the block of land, which was bought for $4,300.00 in 1970, must have been worth substantially more ten years later when the parties married.
Mr Howitt deposed that he also at the start of the marriage owned a car which was sold for about six or seven thousand dollars to buy building materials to assist in the construction of the house at Property C.
Although there was some dispute between the parties as to the extent of their contributions to the building of the first home, having heard all of the evidence, I am comfortably satisfied that both parties contributed to the building of the first home. Necessarily, this meant that Mr Howitt contributed more, both in terms of labour and in terms of materials obtained through his contacts in the building industry. Ms Howitt gave oral evidence, which I accept, that she contributed in effect as best she could. I find that the first home was built as a cooperative effort, albeit that Mr Howitt contributed more.
It is common cause that the parties in 1985 bought the land at Property D where the matrimonial home now stands. They bought the land for $9,900.00 and paid about $7,000.00 for road construction.
Ten years later, in about 1995, the parties commenced to build a house on that land and this was completed in 1999.
On this occasion, I find that Mr Howitt put in a greater proportion of the labour. This was because by this stage the parties had had a number of children and, very understandably, Ms Howitt was more involved in looking after them. Nonetheless, I accept her evidence, which is inherently probable, that she assisted as best she was able in the construction of the second home.
It is agreed that Property C was sold for $250,000.00 and that those proceeds were applied towards the Property D home. It is common cause that the parties borrowed $200,000.00 further from the National Australia Bank to complete the purchase.
In 2004 the parties bought vacant land at Property S for $375,000.00 plus purchase costs against the security of Property D. An extra $40,000.00 was borrowed for sundry expenses, which were apparently to do with a proposed construction to be placed on the property. The

S property was however sold in 2006 for $410,000.00, with a net loss of $46,000, which explains in part the $200,000.00 plus presently owing on the mortgages.
Ms Howitt received an inheritance in 1990. Although there has been some issue as to how much it was, I am satisfied that it was indeed as she asserted the sum of $13,000.00. She also more recently received a $5,000.00 award, which was allocated towards the building of a spa.
Ms Howitt, as is scarcely surprising, looked after the children when they were young. She ceased employment in 1985 but continued to assist in Mr Howitt's self‑employed business thereafter. From 1989 she commenced a series of studies, which have in the ultimate enabled her to achieve qualification as a [L]. Throughout that period Mr Howitt's was the only income.
Once again, there was vivid dispute between the parties as to how much the study had interfered with Ms Howitt's involvement in the family life, most particularly in looking after the children and in household duties. Ms Howitt's evidence, in my view, is inherently probable and was given with conviction. I accept her evidence that, looked at in the round, her studies did not significantly interfere with her performance of household duties and her assistance in bringing up the children, although I note that the children were by the late 1990s reaching an age where they would be expected increasingly to look after themselves.
In 2005, by agreement, Ms Howitt went to Perth because it was anticipated she could do better there in terms of making income. She, it appears, started to live as a tenant at the home of her current partner, a Mr G, in about September or October 2005.
Separation appears to have taken place at about that time. Thereafter, subject to what are clearly bitterly contested child support proceedings, the parties have lived independently.
It is of course clear that Mr Howitt made the significant initial input into the resources that the parties developed during the course of the marriage because he provided the land that enabled them to build their first matrimonial home.
It is also clear that during the relationship Mr Howitt made most of the income and that he supported Ms Howitt during her long period of study to become a [L].
Nonetheless, it is equally well established on the authorities that an initial contribution may be diminished, so to speak, by the later contributions that the parties make. It is all a matter of balancing these relevant considerations together.
Taken overall, I think that the contributions made by the parties to the family's resources can properly be and should be assessed as 55 per cent by Mr Howitt and 45 per cent by Ms Howitt.
The marriage was a very long one and, although the contribution made by Ms Howitt as a wife and mother is in no way to be underestimated, the fact is that the initial block of land was a very important springboard to the parties' ultimate financial position. Furthermore, although I acknowledge and accept that Ms Howitt put into the pool her inheritance and her $5,000.00 award, these sums appear to have been committed to the joint resources of the parties in circumstances where they necessarily represented a much smaller capital input than the freehold block of land initially did.
Furthermore, while this is in no possible sense a criticism, the fact is that it was Mr Howitt's work that enabled the parties to have the funds to enable Ms Howitt to obtain her qualifications and her degree and to get established as a [L].
I think it is proper to regard Ms Howitt's qualification as a [L] as an asset of the parties. It has plainly been significantly contributed to by Mr Howitt's work over many years.

The section 75(2) factors

Mr Howitt is 56 years old. Ms Howitt will turn 48 in 2008.
Although there was some suggestion in the evidence from Ms Howitt that the youngest son, J, wants to go and live with her, this was disputed, and it is clear on any view that J is still presently living with his father.
The father has had full care and day‑to‑day responsibility of J since separation in 2005 and has continued to pay the mortgage on the matrimonial home throughout.
I should however note that there have been ongoing issues as to child support and that at least some moneys have been paid by Ms Howitt, pursuant to assessments made from time to time.
I accept the evidence of Mr Howitt that three of the other sons are living with him. The evidence was given with conviction and, given that there was no challenge to Mr Howitt's assertion that two of them [are employed by] the same company as that in which Mr Howitt works, his evidence is inherently plausible.
Mr Howitt has a shoulder injury which, while it has not at least as yet proved significantly an impairment to his working, is likely to have an increasing effect as time goes by.
Mr Howitt was closely cross‑examined as to the extent to which he could otherwise get supervisory work in the industry, but it is not clear to me quite what his prospects are. The most one can say is that the future for his employment is by no means as rosy as that of Ms Howitt.
Mr Howitt makes about $73,000.00 per annum.
Ms Howitt works in Perth and makes $150,000.00 per annum, plus superannuation and certain ancillary benefits. She is presently employed on a one‑year contract, and she gave evidence that she was by no means sure what would happen when that finished in May of this year. She deposed that should she return to Victoria or work as solicitor in Perth her likely earning capacity would be little in excess of that of Mr Howitt. She also says that she owes Mr G rent of $200.00 a week since 2005 when she moved in with him.
I found the evidence given by Ms Howitt to be somewhat unconvincing in some respects. The transcript will, in all probability, should it be reviewed, show a number of surprising failures by Ms Howitt to respond directly to questions that, in my view, she should readily have been able to understand and reply to.
It is sufficient to say that I think that a company that sends Ms Howitt to [Europe] to attend a conference as part of her accreditation process is a company that holds her in extremely high regard; it could have sent her to a conference in Australia, had it so desired.
Counsel for Ms Howitt submitted that there was no evidence to show that this conference in [Europe] was not the sort of thing provided to all employees.
While it is true that there is no direct evidence of the company's practices, in my opinion counsel's submission is not one that I should accept. It is far more probable that a company that spent a very substantial amount of money sending an employee, particularly one on a one‑year contract, to a very expensive overseas destination is far more probably than otherwise going to want to keep them on.
Furthermore, Ms Howitt is in a relationship that appears to have subsisted for some considerable time with Mr G in Perth. There is nothing to suggest that she will not remain in Western Australia and continue to earn the same amount of money there.
I appreciate that Ms Howitt's job as a [L] in Perth before she obtained her current position was substantially lower than that that she has now obtained. I do not however accept that it necessarily follows that if her present contract is not continued her salary will not continue otherwise at the same level. She is now in the workplace and can point to a year's worth of experience in a specialised and, in the context of the Western Australian minerals boom, sought‑after environment. In my opinion, it is more likely than otherwise that she will continue to earn at at least the level she presently does.
I reject unhesitatingly Ms Howitt's assertion that she has a debt amounting to over $20,000.00 for rent for the last two years. She appears to have moved in with Mr G as a partner at about the time that she says the rental obligation was said to have started. Whatever the position may have been initially, once, as is acknowledged to be the case, she and Mr G became intimate the proposition that she was realistically going to pay him commercial rent evaporated.
I have no doubt that Mr G will forgive any alleged debt. The relationship is over two years old. He is obviously very attached to
Ms Howitt. Furthermore, the alleged agreement in respect of rent has not been ever recorded in writing. More particularly, if there were any force to it, I would have anticipated that Mr G would have done something to get his money long ago. It is clear he has done nothing of the sort.
Although all the children save J are adult, Mr Howitt gave convincing evidence to the Court of the sort of ongoing support he is giving to his adult sons.
In conclusion, I would say that one has to look at the parties' circumstances realistically. Counsel for Ms Howitt submitted strongly that it was not the Court's role in proceedings such as these to try and ensure some sort of equality of outcome or evening‑up process. She submitted that in effect the contribution of the parties was equal (I am of course against her as to that) and that the s.75(2) factors should nonetheless produce no adjustment.
As I say, one needs to be realistic. On any view, Mr Howitt is likely to have at least eight years less working life ahead of him than
Ms Howitt, because of the difference in their age. Furthermore, as I find, his employment future is clouded necessarily by his ill‑health.
I further find that his employment is to an extent restricted by his, in my view, admirable commitment to continue to work with his children and to support them in their early adulthood. That will not continue indefinitely but it is an inchoate factor to which I think it is proper to give some weight.
Furthermore, by contrast, Ms Howitt is in what I regard as secure employment at a very substantial level of salary and has a professional qualification which is not dependent upon physical good health in the way that that of Mr Howitt is and presently at least, and I have no difficulty in inferring for the foreseeable future, will have no responsibility for the children whatever.
In all the circumstances, it is proper that there be a further 5 per cent adjustment pursuant to the s.75(2) factors.

Just and equitable

This brings me to the final stage of evaluation. Is a 60‑40 split just and equitable?
In my opinion, a division of 60 per cent in favour of the husband and 40 per cent in favour of the wife is indeed a just and equitable outcome, bearing in mind all the relevant considerations to which I have referred.
Mr Howitt has expressed through his counsel during the case a desire to retain ownership of the former matrimonial home. He says he wants to buy Ms Howitt out.
While Mr Howitt was subjected to cross‑examination as to his capacity to do this and I have some doubts as to whether he can, in my view it is no way unreasonable to give him an opportunity at least to do so.
Counsel for Ms Howitt suggested that it was imperative that the matrimonial home be sold quickly so that her client could get her share of the proceeds of sale. This submission, while not improper, shows the same pitiless lack of charity towards the father and the children who live in the home that in my view characterised Ms Howitt's case generally.
There is no evidence to suggest that Ms Howitt has any particularly pressing need for an urgent sale of the property. Her job will continue till May 2008, and, even if worse comes to worst, she is likely to be in employment, albeit conceivably at a lower level of pay, and in what I find to be rent‑free accommodation thereafter.
I am prepared to give Mr Howitt 45 days to come up with the funds to buy the matrimonial home, which seems to be a fair and reasonable time for him to explore whatever opportunities are available to him.

Putting the matter bluntly, if he cannot come up with the requisite funds by then, then I do not think he will ever be able to do so. His financial circumstances are, as I understand it, fairly well settled, as is the value of the property. Apart from that aspect of the matter, neither party sought a superannuation splitting order, so each should retain their own superannuation, their own chattels, including their cars and the resultant figures should be worked out by the parties to ensure that the 60‑40 divisor I have arrived at is given effect.
I will direct the parties to bring in minutes to give effect to these reasons for judgment.

I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of Burchardt FM

Associate: Brooke Evans

Date: 16 April 2008