Hutchison and Hutchison

[2018] FCCA 463

FEDERAL CIRCUIT COURT OF AUSTRALIA

HUTCHISON & HUTCHISON [2018] FCCA 463

Catchwords:
FAMILY LAW – Property – 3 year relationship – significantly greater contribution by wife during relationship – no adjustment.

Legislation:

Family Law Act 1975, s.79

Cases cited:

Kennon & Kennon (1997) FLC 92-757

Applicant: MR HUTCHISON

Respondent: MS HUTCHISON

File Number: PAC 4049 of 2016

Judgment of: Judge Obradovic

Hearing date: 3 November 2017

Date of Last Submission: 3 November 2017

Delivered at: Parramatta

Delivered on: 28 February 2018

REPRESENTATION

Appearing for the Applicant: In person

Counsel for the Respondent: Mr Petersen

Solicitors for the Respondent: MRG Solicitors

ORDERS

1. The Respondent wife be declared as against the Applicant husband the sole beneficial owner of all her right title and interest in the cash proceeds of sale of real estate situated at Property A in the State of New South Wales, being land comprised in folio identifier (omitted).

2. The Applicant husband and Respondent wife each be declared to have the sole right and interest against the other in:

   (a)Any chattels, goods, furnishings, motor vehicles, motor bikes, tools, jewellery, and other property which are at the date hereof, in their possession respectively;

   (b)Any bank accounts, moneys, shares and debentures which stand in their sole name respectively at the date hereof; and

   (c)Any superannuation entitlements they may have in their respective sole names as at the date hereof.

3. The Applicant husband and the Respondent wife mutually release each other from all debts owing to the other.

4. The Applicant husband’s application filed 29 August 2016 is otherwise dismissed.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 4049 of 2016

MR HUTCHISON

Applicant

And

MS HUTCHISON

Respondent

REASONS FOR JUDGMENT

Introduction

1. These are proceedings for property adjustment orders pursuant to s.79 Family Law Act 1975.

2. The parties to these proceedings commenced living together in (omitted) 2013, they were married on (omitted) 2014 and they separated on a final basis in about late April 2016. They therefore lived together for less than three years.

3. The Applicant husband is now 60 years of age, and the Respondent wife is 59. For convenience the Applicant will be referred to as the husband and the Respondent as the wife throughout these Reasons.

4. The husband’s application crystallised during the hearing, in that the order which he sought on a final basis was a payment to him by the wife, by way of property adjustment interests, in the amount of $30,000 and that each party retain all assets and liabilities otherwise in their name. The wife sought an order that the husband’s application be dismissed or in the alternative an order that there be a declaration that each party retain all assets and liabilities in their respective names, that is, that any order for property adjustment simply see the parties retaining what each of them currently has.

Credit

1. The husband asserts that the parties commenced cohabitation in (omitted) 2013. The wife on the other hand says they commenced living together in (omitted) 2013.

2. It is clear from the material annexed to the wife’s Affidavit that the parties met online in about (omitted) 2013, and not before. Therefore, they could not have cohabited together in (omitted) 2013 as asserted by the husband. 

3. Furthermore, the Court had the opportunity of listening to both parties’ evidence and observing each of them in the witness box. The wife was the more impressive witness, not only in terms of her ability to recall matters but also in the way that she gave her answers, which the Court finds were given openly and with a view of assisting the Court in having before it all relevant evidence.

4. For these reasons, the Court finds the wife is a witness of credit and where the two are otherwise in conflict, the Court accepts the evidence of the wife over that of the husband.

Contributions

1. At the commencement of the relationship, the husband had the following assets:

Item	Value
Six motorcycles	$57,000
Holden (omitted) motor vehicle	$53,000
Toyota (omitted)	$12,000
Superannuation Entitlements	$62,606
Personal belongings and household furniture	$15,000
Tools and equipment	$60,000
TOTAL	$259,606

1. At the commencement of the relationship the husband had the following liabilities:

Item	Liability Amount
Car Loan to (omitted) Bank	Full amount unknown, paying $654 per month
Loan from husband’s brother	$5,000
Loan from wife	$10,000
TOTAL	Unknown

1. The husband was employed as a (occupation omitted) and he was earning approximately $61,000 per annum at the start of the parties’ relationship. He ceased his employment in (omitted) 2015. At the time of separation, the husband remained unemployed.

2. At the commencement of the relationship, the wife had the following assets:

Item	Value
Interest in Property A property	$715,000
Savings	$43,000
Hyundai motor vehicle	$31,777
Superannuation entitlements	$13,800
Furniture, household and personal effects	$7,000
TOTAL	$810,577

1. At the commencement of the relationship the wife had the following liabilities:

Item	Liability Amount
Mortgage over Property A property	$569,494
Total Nett Assets:	$241,083

1. At the commencement of the relationship, the wife was employed as (occupation omitted) and earning approximately $140,000 per annum. Her taxable income the following year was approximately $150,000.

2. The wife had brought a short time before the parties started living together, the property at Property A for $715,000. The sale settled on 29 May 2013 with the wife borrowing $569,494 and paying the balance of the purchase price from the property settlement with her first husband. The parties lived in the Property A property from early August 2013 until separation. 

3. The parties have never held any joint bank accounts, whether savings accounts or loan accounts. The wife did have credit cards in her name, and in July 2013 the husband became a secondary cardholder on the wife’s accounts. The husband had the use of the wife’s credit cards until February 2016.

4. At the beginning of the parties’ relationship the wife either gave or lent the husband monies which were never repaid. These loans can best be understood as loans which the husband was to repay when he could, with such moneys being paid by the wife to the husband as follows:

   a)In March 2013, the wife loaned the husband $5,000; and

   b)In June 2013, the wife loaned the husband $5,000.

5. After the husband stopped working in (omitted) 2015, the wife supported him financially. At some stage after he stopped working, the husband received a compensation payout from his employer. The amount of such payment has not been the subject of full and frank disclosure by the husband, and remains unknown.

6. In about mid October 2015, the wife increased the home loan by a further $208,000. Such moneys were used to pay down the credit cards in her name, to pay for repairs to the Property A property and to pay off the husband’s car and bike loans. The wife also borrowed approximately $21,000 from her mother during the parties’ relationship.  

7. In addition to his use of her credit card, the wife has calculated that during the period from 25 September 2015 to 26 April 2016, she transferred a total of $60,150 into the husband’s personal bank account and also gave him a further $4,650 in cash. The wife says that such moneys were given to the husband for his personal use.

8. During the parties’ relationship, the wife was responsible for the payment of the mortgage in the amount of $3,948 per month and the large majority of all household expenses, particularly so after the husband ceased working. The husband did not make any financial contributions towards the mortgage except for two payments of $1,500 each and otherwise made some contributions towards the parties joint living expenses.

9. Whilst the husband was employed, he controlled his own income, from which he paid some expenses of the relationship as noted above. In the period September 2013 to April 2015, the husband paid a total of $35,250 towards the parties’ expenses incurred on the wife’s credit card. During that same period he spent over $113,000 on that same credit card. A large proportion of the husband’s drawings on the wife’s credit card appear to relate to personal items such as petrol, car parts and internet services, and while he did purchase items for the household, such items were purchased using the wife’s money (if one takes into account that he spent $78,000 more than he paid into the credit card account).

10. Even after he ceased working in paid employment, the husband did not take on the bulk of the home maker responsibilities. The Court accepts the wife’s evidence that she was at all times during the parties’ relationship primarily responsible for the running of the home, including cooking, cleaning and general home-maker duties.  The husband did however, perform some tasks around the home.

11. At separation, the parties’ property closely resembled that which they had at the commencement of the relationship, except that:

    a)Each of the parties’ superannuation interests had increased in accordance with their further contributions and likely also due to market forces;

    b)The husband’s bike and tool collection had expanded and improved; and

    c)The Property A property had been renovated but was also further encumbered by reason of refinancing; it is also likely that, due to market movements, the property had increased in value.

12. At separation, the husband retained his motor vehicles and motor bikes, furnishings and personal effects. His motor vehicle finance was either reduced or paid off completely.

13. After final separation:

    a)In April 2016 the wife transferred to the husband $6,000 for the purchase of a racing bike;

    b)The wife paid the husband’s health insurance until May 2016;

    c)In May 2016, the wife paid $840 for tickets and accommodation in (omitted) for the husband; and

    d)In late September 2016, the wife paid the husband lump sum maintenance in the amount of $8,000.

14. In May 2017, the wife resigned from her employment.

15. At the date of final hearing both parties were unemployed.

16. In July 2017, the wife sold the Property A property netting $631,735.

Assessment of Contributions and s75(2) Factors

1. The evidence shows that it is the wife who has made the overwhelming financial and non-financial contributions. The husband’s contributions were much less significant. This same conclusion is reached whether by taking a global approach or an asset by asset approach.

2. Throughout the relationship, the husband was able to enjoy a very comfortable lifestyle and was kept in that lifestyle by the wife after he stopped working. He has also been paid spousal maintenance by the wife by way of lump sum post separation.

3. At the time of final hearing, the property pool consists of the following assets:

Item	Owner	Value
Household contents formerly in Property A property	Wife	$5,380
(omitted) account bsb (omitted) account number (omitted)	Wife	$5,052
(omitted) bank accounts, holding proceeds of sale of FMH	Wife	$612,042
(omitted) Hyundai motor vehicle	Wife	$18,000
Superannuation with (omitted)	Wife	$45,624
Six (omitted) motorcycles	Husband	$57,000
Motorcycle parts and accessories	Husband	$5,000
Motorcycle purchased 2014-2015	Husband	$21,000
(omitted) car purchased 2014-2015	Husband	$53,000
Toyota (omitted) van	Husband	$12,000
Household appliances and furniture	Husband	$15,000
Tools and Equipment owned pre 2014	Husband	$60,000
(omitted) tools purchased 2014-2015	Husband	$3,000
Compensation settlement from (employer omitted)	Husband	Unknown
Superannuation	Husband	$62,606
TOTAL	Wife: $686,098 Husband : $288,600+

1. At the time of final hearing, the property pool consists of the following liabilities:

Liability	Amount
Wife’s credit card liabilities per financial statement	$3,130
Wife’s loan debt to mother	$21,200
TOTAL Liabilities	$24,330

Nett personal assets of Husband	$288,600+
Nett personal assets of Wife	$661,768

1. The assets in the husband’s name are at least $288,600 which is no less than 30% of the asset pool. He seeks a payment of $30,000 by property adjustment orders. He says that he is in a poor state of health and that his situation is desperate and urgent.

Conclusion as to Adjustment

1. As has been said, property adjustment proceedings are not the Court’s chance to dispense ‘palm tree justice’. It is for the applicant to satisfy the Court that the property interests of the parties should be adjusted per se and then in what manner. The Court must be satisfied that it is just and equitable to make any order adjusting the parties’ property interests.  The Court is not so satisfied in the present circumstances.

2. It was a very short marriage. The wife brought in the only significant asset of the parties[1]. The husband enjoyed the benefit of living in the home owned by the wife. He made some contributions, both financial and non-financial during the short period they lived together. The wife’s income during the parties’ relationship was more than double that of the husband for the period while he was earning an income and thereafter she was the sole income earner. The parties both shared in the home-maker role, albeit not equally, with the wife making the bulk of the contributions in this regard.

   [1] Albeit the husband had and retains a number of assets whose value has not similarly increased as that of the former matrimonial home

3. In respect of the 75(2) factors the Court accepts that the wife has a much higher earning capacity than the husband and that he does suffer some health issues. However, this does not of itself mean that there should be any adjustment of their property interests in his favour. It is not a compensation claim. It is not the Court’s role to undertake social engineering or the equalisation of assets or financial resources.[2]

   [2] See for example: Kennon & Kennon (1997) FLC 92-757 at p 84,303

4. When an asset by asset approach is adopted, there is an even more compelling argument for there to be no adjustment of property interests. The wife made some contributions of a financial nature to the assets which were held and remain in the husband’s name, and she also made the bulk if not all of the financial contributions to the former matrimonial home.

5. Does justice and equity though call for an adjustment in the husband’s favour simply because of the increase in value of the home over time? There is no evidence that the husband made any contributions which resulted in that increase in value, or which permitted the parties to purchase the home such that they both reaped the benefit of an increase in value. But for the wife the former matrimonial home would not have come into the pool. 

6. Each party has assets in their respective possession, custody and control. They are each the legal owners of such assets. They each have liabilities in their own names. The justice and equity of this case dictate that the parties’ interests are not to be adjusted in the manner argued by the husband, or at all.

Costs

1. The wife seeks an order for the payment of her costs of and incidental to these proceedings. No submissions were made on behalf of the wife in respect of the order she sought. The Act stipulates that each party is to pay his or her own costs. A departure from the default position under the Act is permissible where there are circumstances justifying a costs order. The Court is not persuaded by anything said on behalf of the wife that the usual costs position should be departed from. As such, there will be no order for costs.

Conclusion

1. In all of the circumstances and for all of the reasons set out above orders are to be made as set out in the forefront of these reasons.

I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of Judge Obradovic

Date:  28 February 2018