HUNTLEY & FREEMAN

FEDERAL CIRCUIT COURT OF AUSTRALIA

HUNTLEY & FREEMAN

[2015] FCCA 1030

Catchwords:
FAMILY LAW – Property settlement – de facto relationship of 20 years – de facto wife’s accumulation of investment properties in her name – contributions of parties during relationship – de facto husband’s receipt of significant cash gifts and inheritances post separation – justice and equity – orders made for property settlement.

Legislation:

Family Law Act 1975, ss.90SM, 90SF(3)

Stanford v Stanford (2012) 247 CLR 108
Chapman v Chapman [2014] FamCAFC 91

Applicant:

MR HUNTLEY

Respondent:

MS FREEMAN

File Number:

PAC 1729 of 2014

Judgment of:

Judge Newbrun

Hearing dates:

22 & 23 April 2015

Date of Last Submission:

23 April 2015

Delivered at:

Parramatta

Delivered on:

9 November 2015

REPRESENTATION

Counsel for the Applicant:

Mr Hazlewood

Solicitors for the Applicant:

D A Patterson & Partners

Counsel for the Respondent:

Mr Ford

Solicitors for the Respondent:

Barry Marshall Solicitor

ORDERS

The respondent pay to the applicant the sum of $141,534 within 3 months from the date of this order.
Liberty to apply in relation to any issue of implementation or enforcement of this order.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 1729 of 2014

MR HUNTLEY

Applicant

And

MS FREEMAN

Respondent

REASONS FOR JUDGMENT

Introduction

These are proceedings for property adjustment between the applicant de facto husband and the respondent de facto wife. For ease of reference, in these Reasons the applicant shall be referred to as the husband and the respondent shall be referred to as the wife.
The wife was born on (omitted) 1950 and is now aged 65 years. The husband was born on (omitted) 1955 and is now aged 60 years.
The parties commenced a relationship in about (omitted) 1993 and they separated in about November 2013. There were no children of the relationship. It was common ground between the parties that they were in a relevant de facto relationship for the purposes of the Family Law Act 1975.
During the relationship, the wife made sole financial contributions to the purchase of three investment properties in her name, currently valued at some $1.735m. These properties remain registered in the name of the wife. They represent the majority of her assets.
The parties lived together throughout their relationship in rented properties. They kept their finances separate. They cared and provided mutual support for each other.
Following the parties’ separation, the husband received cash gifts from his father in the sum of about $127,500, and, following his father’s death on (omitted) 2014, a partial distribution from his late father’s estate of $245,000 ($40,000 on 16 September 2014, $5,000 on

7 October 2014, and $200,000 on 28 November 2014). He has a further inheritance expectancy of $450,000.

Competing proposals of the parties

The husband’s Initiating Application filed 15 April 2014 seeks orders that the wife cause real estate situated at Property C, Property H, and Property R, be sold and one half of the net proceeds of sale be paid to him. He further seeks an order that the wife pay to him an amount of $100,000.
In the husband’s Case Outline he sought orders that he retain cash assets ($221,501) and a yacht ($60,000), being assets remaining from the above cash gifts and partial distribution, as well as the above inheritance expectancy of $450,000, totalling $731,501, and receive 37.5% of the total of the parties’ other assets including superannuation.
The wife’s Response filed 27 May 2014 sought orders that the wife, by way of a splitting order, transfer to the husband an amount equivalent to 10% of the wife’s self-managed superannuation fund.
Pursuant to the wife’s Case Outline dated 16 April 2015, the Wife seeks orders that the husband’s Initiating Application be dismissed with costs.

Evidence

At the trial the husband relied on:
a)Initiating application filed 15 April 2014
b)His affidavit of 15 April 2014
c)His affidavit of 26 February 2015
d)Financial Statements filed 3 March 2015
e)Affidavit of Mr G of 17 April 2015
The wife relied on:
a)Her affidavit of 9 March 2015
b)Affidavit of Dr S of 15 December 2014
c)Her Financial Statement filed 27 May 2014
At the trial of the proceedings, the husband and wife were both cross-examined.
At the commencement of the relationship, the wife was working as a (occupation omitted) with (employer omitted). She was earning about $60,000 per annum. The wife obtained shift penalties for working weekends. She resided in fully furnished rented premises at (omitted). At this time the husband was working as a (occupation omitted) earning $70,000 per annum.
The parties commenced living together in the wife’s rented premises at (omitted).
At the commencement of cohabitation, the wife owned a motor vehicle worth about $5,000, and savings of about $16,000. She estimated that the replacement cost of her personal possessions and household furniture at the commencement of the relationship was about $50,000. The wife had some superannuation having joined the (employer omitted) Superannuation Fund on (omitted) 1991.
At this time, the husband owned a motor vehicle worth about $10,000 (a Toyota four-wheel-drive station wagon), a yacht worth $11,000, personal effects $5,000, and savings $4,000.
At the commencement of the relationship the husband had been working in a (employer omitted) at (omitted). After several weeks, the husband decided it was too far to drive from (omitted) to (omitted) each morning and so he resigned his employment and found a job with (employer omitted) in (omitted). The husband was not as successful working in (occupation omitted) in the (omitted) area compared to (omitted) where he was better known to local residents. His income dropped accordingly to between $30,000 and $50,000 per annum. At the same time the wife’s income was steadily increasing.
In 1995, the husband located a property at Property H, which was for sale. He approached the vendor and spoke with him. The vendor did not want to deal with an (omitted). The husband encouraged the wife to contact the vendor and make an offer. In about (omitted) 1995 the wife purchased the property for the sum of $160,000. There was no agent involved and the deposit was initially held by the vendor’s solicitor. There were additional costs of acquisition in the sum of about $10,000. The wife made the sole financial contribution to the purchase of this property. From personal savings she had accumulated before the relationship with the husband, she paid a deposit of $16,000. She paid the stamp duty of $4,110. She took out a mortgage of $150,000.
The wife purchased the furniture for the Property H property. She paid professional tradesmen to paint and make repairs to the property to prepare it to be ready for leasing.
For at least 12 months, whilst the husband was working at (employer omitted), the husband personally managed the Property H property. The husband, after the Property H property mortgage was paid out, removed old furniture from the Property H property, and he painted the property twice.
After the husband left working for (employer omitted), the Property H property was managed by (omitted), at least whilst it was furnished. The Property H property was later managed by (omitted).
The husband held employment as a (occupation omitted) with (employer omitted), for about 6 months, back to (employer omitted), for 6-12 months, and then (employer omitted) for a couple of years.
In 1997 the wife received an inheritance from her mother’s estate of about $50,000. The husband had discovered that a home unit was available for purchase in Property C. He suggested to the wife that the property be purchased. The wife purchased the property for $225,000 direct from the builder. There was no real estate agent involved which represented a saving in commission otherwise payable of some $6,750. The wife took out a mortgage of $180,000. The wife used the inheritance to pay a deposit, stamp duty, and the balance of settlement funds.
The Property C property was initially let and managed by the husband. Later, about the time that the husband commenced working for (employer omitted), the Property C property was let by (omitted). The parties continued to manage (that is, collecting the rents) that property until about the year 2000.
The wife applied the rental income towards repayment of the regular mortgage instalments.
On or about 7 February 2000 the wife received a payment following termination of her employment with (employer omitted) in the sum of about $282,000. She transferred this total sum to her self-managed superannuation fund known as “(omitted) Superannuation Fund”. The trustees of this fund were the wife and her sister.
In about 2001, the husband located a home unit for sale in Property R being Property R. In 2001 the wife purchased this home unit for $245,000 using her payout from (employer omitted). She also paid $7,085 for stamp duty. Having received advice from her accountant (this accountant had been introduced to the wife by the husband) she placed that property into her self-managed superannuation fund. The Property R property was let and managed by (omitted).
The husband’s brother Mr G, a solicitor, acted for the wife on the purchase of the Property H, Property C and Property R properties, and, although he charged for disbursements, he did not charge professional costs.
In 2002 the husband attained a (qualifications omitted).
In 2002 the wife refinanced the Property C property. She borrowed the total sum of $284,000 including the previous loan balance of $180,000. She discharged the mortgage secured over the Property H property so that it was then unencumbered. The new mortgage from (omitted) Bank was then only secured against the Property C property. The husband introduced the wife to an independent refinancing agent who arranged the refinancing.
Between 2005 and 2009 the husband was employed as the (occupation omitted) of (employer omitted), a fledgling (business omitted) that the principal of the (employer omitted), had established. The husband did this work from a desk within the offices of (employer omitted). At this time the husband negotiated for the principal to charge a discounted commission in respect of the wife’s rental properties at Property H, Property C and Property R. The husband oversaw the management of those properties by discussing with the managing agents any issues that arose during the rental of them. The husband finished his work with the principal in (omitted) 2009. He received a redundancy of $20,000. He purchased shares with this payment and then sold them over the following three years for living expenses; he had made a profit of about $4,000. Thereafter, the husband decided to undertake (omitted) type work.
After 2009 the husband was working as a self-employed (occupation omitted), and professional (omitted). During the years 2009 to 2014, the husband’s taxable income ranged from $36,547 (2009) to $5,727 (2014), an average of $18,240 per annum (exhibit E).
During the years 2005 to 2013, the wife’s taxable income was an average of $49,398.
As the parties’ relationship progressed the husband occasionally needed funds to pay his debts and he asked for help from his family members. On occasion the wife would pay certain things for him.
The husband and wife kept their finances separate during their entire relationship. It was always the wife’s intention to have separate finances from the commencement of the relationship as she was financially secure and working full time. She wanted to invest in property to secure her future.
The parties agreed to share the payment of rent for the rental properties in which they lived throughout the relationship but there were occasions when the husband didn’t pay his full half share of the rent. The utilities bills were usually paid by the wife. In respect to the last three rented properties that the parties lived in prior to the separation the leases were in the names of both parties.
During the relationship, the husband paid for two mobile phones and provided one for the wife’s use. The telephone charges for the phone that the wife used were modest.
During the relationship, the wife purchased and did the major household grocery shopping. The husband would usually buy the fresh food. They both purchased alcohol for consumption.
The husband cooked most evening meals on the barbecue and the wife would prepare the side dishes and she cleaned the kitchen. The husband made the wife’s lunch every day. The parties often ate out. The wife regularly cleaned the rental apartments that the parties lived in during the relationship including washing of clothes, ironing, vacuuming, cleaning surfaces, cleaning bathrooms and general day to day maintenance of the homes. She took the bins out when necessary and paid all the bills.
The wife ceased work for (employer omitted) in (omitted) 1999.
The wife then worked for (employer omitted) from 1999 to 2000.
The wife worked for (employer omitted) from (omitted) 2000 until (omitted) 2007. She received a termination payment from (employer omitted) in about (omitted) 2007 in the sum of $36,143.
The wife then worked for two or three months for (employer omitted) before working for (employer omitted) from (omitted) 2008 to (omitted) 2012. She received a redundancy payment from (employer omitted) in the sum of $15,213.
During the parties’ relationship the husband had more than one period of unemployment. One period of unemployment was for at least six months. For about nine months between August 2011 and May 2012 the husband received a new start allowance from Centrelink.
The parties lived at Property H until 2002. They then moved to rented accommodation at (omitted). In about August 2011 they moved to rented accommodation at (omitted). In June 2013 they moved to rented accommodation at (omitted). The wife paid for all costs associated with disconnecting and reconnecting all utilities and all moving expenses.
The husband had two children from a prior marriage. A son A born (omitted) 1987, and B born (omitted) 1989. The husband separated from his former spouse in (omitted) 1989. The husband spent time with his two children on alternate weekends between 1993 and 2007. The husband would pick up the children from his former family home when he finished work on a Saturday and bring them to the parties’ rented premises. Sometimes the husband would pick up the children on Friday afternoons after work and bring them to the parties’ rented premises.
The children would usually stay with the husband and wife every fortnight during the children’s infant to primary school years and the parties would look after the children. After the children commenced high school they would stay with the parties about 18 fortnights per annum and again the parties would look after them.
The wife greeted and cared for the children to make their stay a happy and enjoyable experience. She would put them to sleep each night they stayed and often she would read to them or talk with them and generally she cared for them as her own children. They had their own bedroom and the wife maintained and cleaned the space so that it was a nurturing environment for them. The wife enjoyed her time with them. She purchased their favourite foods and drinks when they went out and she would readily spend money on them to create a positive and enjoyable experience for them. The wife considered that she and the children were close. The wife never sought recompense from the husband for the funds spent on the children.
As at 30 June 2013, the wife’s superannuation fund had a gross value of $571,280 comprising the Property R property, cash/bank accounts ((omitted)), and shares in listed companies.
The wife gave her motor vehicle to the husband’s son A in about 2006 having increased the mortgage balance on the Property C property to purchase herself another car. She bought a Mazda for $26,000.
In about (omitted) 2013, the wife was admitted to (omitted) Hospital for depression and anxiety disorder. She remained there for some 84 days. She received medication. She was discharged on (omitted) 2013.
The wife returned to live with the husband at (omitted). The husband stated that he went to great efforts to care for the wife. The wife stated in evidence that the husband was very good at caring but on occasion he would get quite tough. The wife was asked in cross-examination whether the husband’s care for her was something that occurred during the relationship to which she replied, “It was an equal partnership and we cared for each other.” She agreed that the husband was a caring partner throughout the whole of the relationship.
The husband travelled on various holidays following the separation of the parties. He agreed that he funded those travels through his work, gifts from his father and later inheritance.
The parties separated on 17 November 2013. The next day, the wife was admitted to the (omitted) Hospital where she remained for some 43 days, being discharged in about mid January 2014. She was diagnosed with major depressive disorder, with psychotic features.
In late May 2014 the wife was admitted to the (omitted) Hospital where she remained for 63 days being discharged on (omitted) 2014. The diagnosis at discharge was relapse of depressive disorder. She displayed severe anxiety during this admission. In late August 2014 the wife was admitted to (omitted) Mental Health. She remained there for 21 days being discharged on (omitted) 2014. The diagnosis was moderate depression and severe generalised anxiety disorder. The wife was admitted then to (omitted) Hospital where she remained for 25 days being discharged on (omitted) 2014. The discharge diagnosis from that latter hospital was major depression with psycho motor retardation.
The wife’s mental health has gradually improved since the above treatment and having ceased her relationship with the husband.
The wife is under the care of Dr S, GP, in (omitted) and she has commenced treatment with Dr S, Psychiatrist and her Psychotherapist Ms T. Her medication, for depression and anxiety, is stable. The wife had substantial hospitalisation costs for her various hospital admissions during 2013 and 2014. Her medical insurance substantially, but not totally, covered the costs. She is renting premises on her own paying $385 per week.
The wife maintains a belief that she is unable to return to work as a result of her mental health issues which she is managing. She asserts that she is retired. The court notes the wife is aged 65 years.
The wife’s income is derived from her rental income from the Property H, Property C and Property R properties, dividend income and interest on an investment in (omitted). She estimates that her future taxable income will be in the range of $50,000 per annum.
The wife’s rent received from the Property C property pays for the regular mortgage instalments. She has an expectation that the rental income from her investment properties will continue to be available to her for payment of all the usual maintenance and repair costs of these properties.
The wife does not receive a pension as she is a self-funded retiree.
The wife would like to maintain her standard of living that she has achieved working most of her life. Given her health problems the wife is concerned that her standard of living will fall if she is required to make a substantial payment to the husband through these proceedings.
The husband received a gift of $20,000 from his uncle in about mid 2013 and at separation he had $15,000 remaining in a (omitted) bank account. In evidence the husband stated that he spent the $20,000 on living expenses.

Since the separation, the husband pursued his career as a (occupation omitted) and professional (hobby omitted). As a (occupation omitted) he sold a property owned by his father and received commission for that sale.
The husband’s father gave him $15,000 in January 2014. There was a further gift to him of $112,500 in February 2014.
The husband’s father died on (omitted) 2014. By 28 November 2014, the husband had received a total of $245,000 by way of partial distributions from his father’s estate. The husband is expected to be paid a further sum of about $450,000 from the estate.
In May 2014 the husband had purchased a yacht for $58,000.
The husband was cross-examined on his Financial Statement sworn

15 April 2014. He stated in that document that is average income was $442 per week. He stated in evidence that he derived that income of $442 from his work as a (occupation omitted). He agreed that the figure of $442 was an estimate. He referred to a three-month job managing a (omitted) and he estimated “on the deliveries to come” and, noting those matters, he agreed that he had guessed the estimate.
The husband’s intention is to purchase a property to live in the (omitted) district once the proceedings are resolved.
The husband developed angina in about mid 2013 and had stent surgery. He was unable to work for some months whilst recuperating. He remains with slight angina and suffers from stress and asserts that this has reduced his capacity to work effectively more than part time.
The wife asserts that a diamond pendant was won by the husband as a prize and gifted to her. This occurred in about 2008. The husband stated in evidence that when he won the prize he also received a valuation certificate for the pendant which stated that it was a pure white diamond valued at $11,000. The husband stated that he gave the valuation certificate to the wife at the same time as he gave the diamond pendant to her. He stated that the pendant has never been in his possession from the day the wife separated from him. He stated that the valuation certificate was in the house when the wife left. The husband stated that the valuation would have been returned to her when her sister Ms M came to the house to collect the wife’s belongings.
The wife stated that she does not know what happened to the valuation certificate for the pendant. She agreed that the certificate stated a value of $11,000 for the pendant.
Neither party asserted that they had not lived together in a de facto relationship in NSW from (omitted) 1993 to on or about 17 November 2013.

Property Adjustment

Pursuant to section 90SM (1)(a) of the Act, in property settlement proceedings, the court may make such order as it considers appropriate, in the case of proceedings with respect to the property of the parties to the de facto relationship or either of them, altering the interests of the parties to the de facto relationship in the property. Such order may include an order requiring either or both of the parties to the de facto relationship to make, for the benefit of either or both of the parties to the de facto relationship, such transfer of property as the court determines.
The court, in determining property proceedings, should firstly identify, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property that is available for distribution between them. The court should then determine whether it is just and equitable to make an order altering the parties’ interests in such property. If the court is satisfied that it is so just and equitable, the court should then consider the contributions made by each of the parties pursuant to section 90SM(4) of the Act before looking at their future needs by reference to the factors set out under section 90SF(3) of the Act.

Balance Sheet-The parties’ contentions

The Amended Joint Balance Sheet (exhibit P), including notes, was tendered during final submissions. The items marked # have been determined by the court in these Reasons:

Ownership	Description	Wife’s Value	Husband’s Value
W	Property H, NSW	$600,000	$600,000
W	Property C, NSW	$660,000	$660,000
W	Property R, NSW	$475,000#
W	(omitted) bank A/C	$5,500	$5,500
W	(omitted) Savings/C	$130	$130
W	(omitted) Bank/C	$5,000	$5,000
W	(omitted) Shares	$10,368	$12,318#
W	(omitted) Shares	$2,790	$3,072#
W	Mazda (omitted)	$5,000	$6,000#
H	(omitted) bank A/C	$48,905	$48,905
H	(omitted) A/C	$172,596	$172,596
H	Mazda (omitted)	$5,000	$6,000#
H	Yacht “(omitted)”	$60,000	$60,000
H	Balance Father’s Estate *1	$450,000#
H	Contents	$4,000
Diamond Pendant	$5,500	$11,000#
Total	$2,055,789	$2,044,521
Liabilities
W	Mortgage secured over Property C property	$234,000	$234,000
W	Capital Gains Tax in event of sale	$0	$0
H	(omitted) Visa	$787	$787
Total	$234,787	$234,787
Total Net Assets	$1,821,002	$1,809,734

Super
W	(omitted) Superannuation/ Payment phase	$146,280	$630,747#
H	(omitted) Super/Accumulation	$18,006	$18,006
Total	$164,286	$648,753
Financial Resources
H	¼ interest in the remainder estate of the late Mr H	$437,500#
Total	$437,500
Total all interests	$2,422,788	$2,458,487

·Note 1: The assets in paras 10, 11, 12 (sic 13), and 13A, *1 represent balance of monies received since separation $731,501. The husband says these assets should be quarantined. 2 pools.
·Note 2: Husband says updated valuation and current share prices establish current value of assets at $630,747

(omitted) Shares and (omitted) Shares

The only evidence before the court at final hearing relating to these shares were the values ascribed by the wife in her Financial Statement filed 27 May 2014. Accordingly, the wife’s values of $10,368 and $2,790 will go into the balance sheet.

Motor vehicles

The wife asserts a value of $5,000 in the amended joint balance sheet for her motor vehicle. The husband asserts $6,000 for her vehicle, having previously asserted $7,000 in his first affidavit. In the wife’s Financial Statement she states $8,000. The sum of $6,000 will be ascribed to the wife’s motor vehicle in the balance sheet.
The husband asserts a value of $6,000 for his motor vehicle in the amended joint balance sheet. The wife asserts $5,000 for that vehicle. In the husband’s Financial Statement he states $6,000. The sum of $6,000 will be ascribed to the husband’s motor vehicle in the balance sheet.

Diamond Pendant

There was evidence of a valuation certificate in relation to the diamond pendant. That certificate came into the husband’s possession when he won the pendant. The certificate stated a value of $11,000. That figure will go into the balance sheet.

(omitted) Superannuation Fund (including Property R)

In oral submissions, the parties agreed that the wife’s asserted value for her superannuation fund, as set out in the amended joint balance sheet, could be ignored, and an agreed figure of $625,619 was reached between them. Accordingly, the total value of the wife’s superannuation fund was agreed at $625,619 and that figure will go into the balance sheet.

Property R property

This property is held within the wife’s superannuation fund and thus falls within the superannuation assets of the parties.

Husband’s inheritance expectancy

The husband’s inheritance expectancy of $450,000 (see the affidavit of Mr G, paragraph 10) referred to in the above amended joint balance sheet as “Balance Father’s Estate” is just that-an expectancy, and accordingly, it will be treated by the court as a financial resource of the husband. (The husband’s stated financial resource of some $437,500 in the amended joint balance sheet can be ignored because it is inaccurate; the correct figure is $450,000.)

Balance Sheet

Notwithstanding the submission by counsel for the husband that the court should employ a two pool approach, the court is satisfied that it should use a single pool. This will enable the financial position of the parties to be fully and clearly reflected.
The court finds that the parties’ de facto relationship assets to be as follows:

Ownership	Description	Wife’s Value
W	Property H, NSW	$600,000
W	Property C, NSW	$660,000
W	(omitted) bank A/C	$5,500
W	(omitted) Savings/C	$130
W	(omitted) Bank/C	$5,000
W	(omitted) Shares	$10,368
W	(omitted) Shares	$2,790
W	Mazda (omitted)	$6,000
H	(omitted) bank A/C	$48,905
H	(omitted) bank A/C	$172,596
H	Mazda (omitted)	$6,000
H	Yacht “(omitted)”	$60,000
H	Contents	$4,000
W	Diamond Pendant	$11,000
Total	$1,592,289
Liabilities
W	Mortgage secured over Property C property	$234,000
H	(omitted) Visa	$787
Total	$234,787
Total Net Assets	$1,357,502

Super
W	(omitted) Superannuation/ Payment phase 2 (including the asset Property R, NSW)	$625,619
H	(omitted) Super/Accumulation	$18,006
Total	$643,625
Total all interests	$2,001,127

Section 90SM(3) of the Act

The wife submitted that it would not be just and equitable to alter the property interests of the parties.
In Stanford v Stanford (2012) 247 CLR 108, which decision is relevant to property division between de facto partners, the High Court stated:
[36] “The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. And while the power given by section 79 is not “to be exercised in accordance with fixed rules”, nevertheless, three fundamental propositions must not be obscured.
[37] First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of section 79(1)(a) itself, which refers to “altering the interests of the parties to the marriage in the property”. The question posed by section 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
[38] Second, although section 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion.
[39] Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is “just and equitable” to make the order is not to be answered by assuming that the parties rights to or interest in marital property are or should be different from those that then exist. All the more is that so when it is recognised that s79 of the Act must be applied keeping in mind that “community of ownership arising from marriage has no place in the common law”. Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be “decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses”. The question presented by s79 is whether those rights and interests should be altered.
[40] Third, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable” only because of and by reference to various matters in s79(4), without a separate consideration of s79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
[41] …But if the parties to a marriage have expressly considered, but not put in writing in a way that complies with Pt VIIIA, how their property interests should be arranged between them during the continuance of their marriage, the application of these principles accommodates that fact. And if the parties to a marriage have not expressly considered whether or to what extent there is or should be some different arrangement of their property interests in their individual or commonly held assets while the marriage continues, the application of these principles again accommodates that fact. These principles do so by recognising the force of the stated and understated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of that husband and wife during the continuance of their marriage. The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.
[42] In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as a result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s79(4).”
The Full Court in Chapman v Chapman [2014] FamCAFC 91 considered the relevant principles emanating from Stanford and Bevan. In Chapman, Strickland and Murphy JJ (with whom Bryant CJ agreed) said, inter alia:
18. As to inference, the plurality in Bevan said (at [89]) “[u]ltimately, however, appellate error will not be demonstrated if it is possible to ascertain, either by reference to an express finding or by necessary inference, that the trial judge has given separate consideration to the two issues” (emphasis added). Similarly, the plurality firmly rejected (at [86]) the notion that s 79(2) forms a “threshold issue” – which their Honours described as a “misleading” description – or that error is demonstrated by a failure to deal with s 79’s separate requirements in a particular order.
19. Section 79 demands a consideration, separately, of all of its requirements without conflation. Provided a trial judge has done so, and the reasons demonstrate that this has been done, no error is demonstrated by a failure to follow a particular order in doing so. Further, the breadth and depth of the consideration of the s 79(2) issue, and the extent of an adequate exposition of it in the reasons, will vary from case to case. In that respect, the plurality in Bevan said, at [82], that the separate s 79(2) issue will, “…in many cases … [be] … effectively answered in the affirmative by the way the parties present their cases.”
20. Each of those conclusions conforms entirely with what was said about those issues by the High Court in Stanford v Stanford (2012) 247 CLR 108.
21. First, it is “…not possible to chart [the] metes and bounds” of the relevant discretion. Just as importantly, it was recognised specifically that the characteristics of individual marriage unions, in so far as they acquire, hold and deal with property, differ. In “many cases”, the union is underpinned by “…stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of the husband and wife during the continuance of their marriage” (Stanford, at [41]). And, in “many cases”, (but, not all) the “…just and equitable requirement is readily satisfied…” by the fact of separation: “[i]t will be just and equitable to make a property settlement order … because there is not and will not thereafter be the common use of property by the husband and wife” (Stanford at [42]).
22. “Ready satisfaction” of the s 79(2) requirement “in many cases” by reference to separation and its consequences brings with it a necessary further consequence; in those “many cases” the parameters, breadth and depth of the s 79(2) inquiry will be curtailed accordingly. It is those who lived within the “stated and unstated assumptions” who understand them best. As a result, satisfaction of the s 79(2) requirement can be inferred, at least in part, from the issues joined and, importantly, not joined, between the parties.”
The husband’s net assets, including superannuation, amount to $308,720. The court notes he has an inheritance expectancy of $450,000. Thus, he will in due course have some $758,720 in assets. The wife has net assets, including superannuation, of $1,692,407. The de facto relationship of the parties spanned some 20 years.
The parties’ rental of properties to live in during their relationship allowed the wife to rent out and maintain her investment properties.
But for the breakdown of the parties’ relationship in 2013, it can be inferred that the gradual accumulation by the wife of the various rental properties was intended to benefit both parties, particularly during their retirements.
The court is satisfied that it is appropriate in this case to alter the property interests of the wife in light of the breakdown of the parties’ de facto relationship, and that the continuance of the current legal ownership of the property of the parties would not afford them justice and equity.

Contributions to assets

The wife made sole financial contributions to the purchase of the Property H, Property C and Property R properties. She solely met the mortgage repayments on the Property H and Property C properties through the application of the rental income from these properties.
In respect to the Property H property, the wife utilised personal savings that she had accumulated before her relationship with the husband commenced. In respect to the Property C property, the wife utilised the inheritance she had received from her late mother’s estate.
The husband located all three properties and encouraged the wife to purchase them. Through his efforts, there was no agency commission paid in respect to the purchase of the Property H and Property C properties. The husband’s brother, a solicitor, acted for the wife on the purchase of the two properties and charged no conveyancing fees. Following their purchase, for certain periods up to about the year 2009, the husband assisted in their management. Through the husband’s employment, both as a (occupation omitted) and (occupation omitted), he arranged for reduced commissions to be charged by the real estate agencies managing the properties, as discussed. The husband painted the Property H property on two occasions.

The husband introduced the wife to his accountant who assisted the wife in establishing a self managed superannuation fund, noting that the Property R property was held within this fund. The husband introduced the wife to an independent refinancing agent who arranged the refinancing of the Property C property, leading to the discharge of the Property H mortgage.
The parties contributed to the payment of rental of their various rental properties in which they lived throughout the relationship, which allowed the wife to rent out her three investment properties to tenants.
The parties both contributed to the payment of food and household expenses. They both cooked. The wife carried out cleaning and general day to day maintenance of the rental apartments that the parties lived in during the relationship. Despite the husband’s periods of unemployment, he contributed to the best of his financial ability to household related expenses during the relationship. The parties mutually cared for each other during the relationship. The court finds that the parties made equal welfare and homemaker type contributions.
In respect to the Property R property, the wife utilised her retrenchment benefit from (employer omitted) ($282,000) to solely fund the purchase of that property. The wife’s membership of the (employer omitted) Superannuation Fund spanned the period of the parties’ relationship; she joined the (employer omitted) Superannuation Fund on (omitted) 1991, the de facto relationship commenced in (omitted) 1993, and the wife was retrenched from (employer omitted) in (omitted) 2000. The husband submitted that he made a contribution to the wife’s retrenchment benefit from (employer omitted), at least from (omitted) 1993 to (omitted) 2000. The court notes that during the period from (omitted) 1993 to (omitted) 2000 the husband was also in gainful employment. The husband submitted that it was the husband’s homemaker contribution which supported a finding that he contributed to the wife’s retrenchment benefit. In view of the court’s finding above that the parties made equal welfare and homemaker type contributions, this submission is rejected.
The husband’s net assets in the asset pool of the parties, some $308,720 (including his superannuation), represent about 15% (15.427%) of the asset pool, including superannuation. By reason of the husband’s non-financial contributions, he should be regarded as having contributed 22.5% overall to the asset pool, including superannuation.
In the above circumstances, the court finds that overall relevant contributions under section 90 SM(4)(a)-(d) to the date of trial favour the wife 77.5% to the husband’s 22.5%.

Section 90 SF(3)

The court refers to the wife’s admissions to hospitals, predominantly spanning the period from July 2013 to October 2014, totalling some 237 days (see exhibit C for the dates of the various hospital admissions) relating to her mental health issues.
In evidence before the court is a brief medical report of the wife’s treating GP, Dr S, of 18 November 2014. The doctor states that she has being seeing the wife since May 2014. She states, “She has had four admissions this year to mental health units to treat significant melancholic depression with psychomotor retardation. She has recently stabilised on new medication during her last admission in September to (omitted) Hospital and she has managed to return to assisted living with her niece, Ms M. I have referred her to a new psychiatrist and psychologist to continue to manage her mental health disorder. At this point in time due to her significant mental health disorder and her age I see that it is unlikely that she will return to the workforce.”
The court accepts the doctor’s opinion that it is unlikely that the wife will return to the workforce. However, the court notes that the wife is presently aged 65 years.
The wife’s anxiety and depressive episodes, requiring hospitalisations, arose in the context of her relationship difficulties; the wife’s evidence is that she suffered an acute mental health crisis which she believes resulted from the breakdown of her long-term relationship with the husband and which required admissions to a number of private clinics and hospitals for assessment and treatment.
There is no expert psychological or psychiatric evidence indicating the wife’s mental health prognosis and likely future mental health treatment. The wife’s evidence is that her mental health improved after the cessation of the relationship and she is managing. The wife has medical health insurance through (omitted) and which substantially covered her medical and hospital charges during the 2014 and 2015 financial years.
The wife provided care for the husband’s children from his former marriage every alternate weekend during the children’s infancy and primary school years and to a lesser extent during their secondary school years, as discussed previously.
The husband is due to receive a further $450,000 from his late father’s estate which represents a significant financial resource to the husband.
The husband is aged 60 years. He continues to work as a (occupation omitted), including (omitted). His income is modest, as referred to below. He refers in his evidence to developing “angina and had two stents inserted in my heart”. He states that he suffers from slight angina and stress and that this has “reduced my work capacity to work effectively more than part time.” The husband adduced no medical or other health professional evidence relating to his stent surgery or angina and as to whether he has any reduced capacity for work. The court is not prepared to find that the husband has a reduced capacity for work by reason of his angina and stress.
The wife has reached retirement age. She has no expectation of receiving income from personal exertion. Her income is derived from the rental received from her two home units at Property H and Property C, and the home unit at Property R and other investments including shares, held within her self managed superannuation fund.
As a consequence of the court’s contribution findings, the wife will retain substantial capital and income producing assets.
The wife’s 2013 tax return states that her net rent from the Property H and Property C properties is some $22,667. The wife’s superannuation fund balance sheet as at 30 June 2013 indicates income after taxation of some $29,753.
The husband’s taxable income ranged from $36,547 (2009) to $5,727 (2014), an average of $18,240 per annum
During the years 2005 to 2013, the wife’s taxable income was an average of $49,398.
Accordingly, it can be seen that the wife’s average annual income is superior to the husband’s modest average annual income.
In the above circumstances, and doing the best it can, the court is of the view that there should be no adjustment in favour of either party under section 90 SF(3).

Justice and equity

The net asset pool, including superannuation, is $2,001,127. The wife should receive 77.5% of that net asset pool, being $1,550,873.
The husband’s 22.5% of that net asset pool is $450,254. He also has his inheritance expectancy of $450,000.
On the basis that the wife retains the Property H and Property C properties, $1,260,000, her bank accounts, $10,630, her shares, $13,158, her car, $6,000, diamond pendant, $11,000, superannuation, $625,619, and retain the mortgage debt, $234,000, her net position would be $1,692,407. Because her 77.5% share of the net asset pool is only $1,550,873, she should be ordered to pay the husband the difference, being $141,534.
The court’s proposed orders do not affect the earning capacity of the wife in a significant way. The wife, now aged 65 years, can, if she chooses, convert her assets, including superannuation fund assets, in whole or in part, to cash, and thereby receive an income stream for a significant time. The court also notes the existence, within the wife’s superannuation fund, of shares valued at trial of some $21,000 (dividends received in financial year 2013 of $721), and a (omitted) investment valued at trial of $126,658 (interest received in financial year 2013 of $3,743).
In the circumstances of this case, and for all the reasons set out above, the court considers that the orders proposed to be made will produce a just and equitable result as between the parties.

I certify that the preceding one hundred and twenty-two (122) paragraphs are a true copy of the reasons for judgment of Judge Newbrun

Associate:

Date:9 November 2015

[2015] FCCA 1030

9 November 2015

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