IRVING & LEWIS
[2010] FMCAfam 866
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| IRVING & LEWIS | [2010] FMCAfam 866 |
| FAMILY LAW – Property settlement – extension of time to bring application – hardship – discretion. FAMILY LAW – Property settlement – assessment of contributions – effect of oral agreement that wife would make no property settlement claim. |
| Evidence Act 1995, ss.21, 59 Family Law Act 1975, ss.44(3), 44(4), 75(2), 79 |
| Kowaliw & Kowaliw, (1981) FLC 91-092 Townsend & Townsend, (1994) 18 Fam LR 505, (1995) FLC 92-569 Hickey & Hickey; A-G for Commonwealth (Intervener), [2003] FamCA 395, (2003) FLC 93-143, (2003) 30 Fam LR 355 C v C, [2005] FamCA 429, (2005) 33 Fam LR 414, (2005) FLC 93-220 Gardiner & Gardiner, (1978) 4 Fam LR 517, (1978) FLC 90-440 Kenny & Kenny, (1983) 9 Fam LR 140, (1983) FLC 91-350 Hewitt & Hewitt, (1982) 8 Fam LR 327 Whitford & Whitford, (1979) FLC 90-612, (1979) 4 Fam LR 754 Hall & Hall, (1979) FLC 90-679, (1979) 5 Fam LR 411 Althaus & Althaus, (1979) 8 Fam LR 169, (1982) FLC 91-233 Carlon & Carlon, (1982) 8 Fam LR 729, (1982) FLC 91-272 Neocleous & Neocleous, (1993) 15 Fam LR 557, (1993) FLC 92-377 Mehmet & Mehmet, (1986) 11 Fam LR 322, (1987) FLC 91-801 |
| Applicant: | MS IRVING |
| Respondent: | MR LEWIS |
| File Number: | PAC 930 of 2008 |
| Judgment of: | Halligan FM |
| Hearing dates: | 15 & 16 July 2010 |
| Date of Last Submission: | 16 July 2010 |
| Delivered at: | Parramatta |
| Delivered on: | 13 August 2010 |
REPRESENTATION
| Solicitors for the Applicant: | Ms Teerman |
| Solicitors for the Respondent: | Husband In Person |
ORDERS
Pursuant to s.44(3), Family Law Act 1975, the time in which the wife may institute property settlement proceedings is extended to 3 August 2009.
Within 14 days both parties shall do all things and sign all documents necessary to list [Property L] (the property) for sale by auction in accordance with the following order.
For the purposes of Order 2-
(a)The property shall be put to auction within three months after being listed for sale.
(b)The agent shall be [H Agent] or such other agent as the parties agree in writing.
(c)The reserve price shall be as agreed between the parties in writing, or failing agreement, as recommended by the auctioneer.
(d)The solicitor for the vendor shall be as agreed between the parties in writing, or failing agreement, shall be the wife's solicitors on the record in these proceedings.
(e)If the property does not sell at auction, then subject to Order (3)(g), the parties shall cause the property to be put to further auctions at three monthly intervals until the property is sold.
(f)The reserve price at a second or subsequent auction shall be as agreed between the parties in writing, or failing agreement, the lesser of five percent less than the reserve price at the previous auction and the amount recommended by the auctioneer.
(g)If following a second or subsequent auction at which bids fail to reach the reserve price the auctioneer recommends to the parties that they accept an offer made to purchase the property, the parties shall accept the offer.
On the property being sold, the parties shall do all things and sign all documents necessary to cause the proceeds of sale after usual adjustments between vendor and purchaser on settlement to be applied-
(a)In payment of agents commission and auction expenses on the sale;
(b)In payment of legal costs on sale;
(c)In payment of any debt as at the date of these orders secured over the property;
(d)In payment of the balance remaining as to 50% to the wife and 50% to the husband.
Until the settlement of the sale of the property in accordance with these orders, as between the parties the husband is to have exclusive use and occupation of the premises and is solely responsible for all outgoings on the property.
Otherwise than as dealt with in these orders, each party is entitled to the exclusion of the other to all property in his or her respective possession or control.
Pursuant to s.106A, Family Law Act 1975, if a party fails or refuses to sign a document required to be signed under these orders, a Registrar of the court may sign the document on behalf of the party.
Otherwise all outstanding applications are dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Irving & Lewis is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAC 930 of 2008
| MS IRVING |
Applicant
And
| MR LEWIS |
Respondent
REASONS FOR JUDGMENT
Introduction
This is the wife's application to extend the time in which to institute property settlement proceedings under the Family Law Act 1975, she being 57 days out of time, and if successful, for property settlement orders. The wife by way of property settlement seeks that the former matrimonial home be sold and the proceeds divided equally between the husband and wife, and that a superannuation splitting order be made in respect of the husband's superannuation interest of 25% in her favour.
The husband opposes both any extension of time and the making of any property settlement orders.
The pool of divisible assets is quite modest. The husband is unrepresented. It is difficult for an unrepresented litigant, such as the husband in this case, to appreciate the subtle distinctions between evidence going to whether the wife prima facie has a reasonably arguable case for property settlement for the purposes of determining the extension of time issue, on which cross-examination is not normally allowed, and other facts relevant to the extension of time issue, on which cross-examination would be permitted.
With the wife's concurrence, I therefore have proceeded to hear both issues concurrently, contrary to the usual practice of determining the extension of time issue first. I will determine what property settlement order, if any, is warranted under s.79 before proceeding to determine the extension of time issue. No property settlement order may be made, however, unless the wife is successful in her extension of time application.
Background
The husband was born in 1959, and is 50. The wife was born in 1965 and is 45. The parties commenced cohabitation, I am satisfied, in early 1995, married in 2000, and finally separated in 2006. They were divorced with effect in June 2008.
The wife has two children of a prior relationship, [X] born in 1988 now aged 22, and [Y] born in 1986 now aged 24. The wife's children lived with the parties from about December 1997. The wife's daughter left the matrimonial home in 2006, prior to the parties’ separation. The wife's son remained living with the husband in the former matrimonial home after separation until about September 2009, when he moved to live with the wife.
The evidence
Credit of witnesses
Both parties gave evidence and were cross-examined. The wife’s mother, sister, a friend and solicitor were witnesses in her case.
The husband called no other witnesses in his case, although he attached to his affidavit unsworn statements of various people on which he sought to rely. The documents themselves are hearsay and inadmissible (s.59, Evidence Act 1995). There was no evidence to suggest that any of the statements may be admissible under any of the exceptions to the hearsay rule. It is clear that the husband's purpose in obtaining these unsworn statements was to secure the makers of the statements as witnesses in his case. As such their evidence should have been on oath or affirmation (s.21, Evidence Act). While these statements were not formally objected to on behalf of the wife, and hence strictly speaking remain in evidence before me, I am not satisfied I can place any probative weight on them. In any event, I am not satisfied that exclusion of these unsworn statements weakens the husband’s case, and in fact it may strengthen his case as it may be argued that parts of some of them are against what he sought to prove.
The only witness in the wife's case that the husband sought to cross-examine apart from the wife was the wife's solicitor. I terminated the husband's cross-examination of the wife's solicitor when it became clear that the purpose of the cross-examination was to suggest that the solicitor had instituted the proceedings without instructions to do so. I drew the husband’s attention to the wife's affidavit verifying the initiating application, and her affidavit and financial statement filed with them, all of which were totally inconsistent with any such proposition. He had not sought to suggest to the wife in cross-examination that she had not given instructions to her solicitor to institute the proceedings.
As the husband did not seek to cross examine the supporting witnesses in the wife's case apart from her solicitor, I must accept their evidence unless it is inherently unbelievable or so internally inconsistent that it could not be believed.
So far as the credit of the parties is concerned, I am not satisfied the credit of either was successfully challenged in any general sense. There were aspects of the evidence of each with which I had some difficulty, and I will deal with those as they arise during my fact finding later in these reasons. But I was not satisfied that either party was shown to be intentionally untruthful in any aspect of their evidence, despite some inconsistencies in the evidence of each of them.
The date cohabitation commenced
The wife variously placed the commencement of cohabitation in 1993, 1994, 1995 and 1996. In cross-examination the wife said cohabitation commenced in 1995. The husband said the parties commenced cohabitation five years before marriage, that is, in 1995. He said it was in early 1995. I prefer the husband's consistent evidence on the date of cohabitation to the mother's inconsistent evidence on the issue and find cohabitation commenced in early 1995.
The parties’ property at commencement of cohabitation and since
At the commencement of cohabitation the husband owned a house property at [L]. He bought it for $62,000 in 1988 on a deposit of $6200. He subsequently paid his former de facto partner $18,000 on the breakdown of his relationship with her and retained this property. There is no evidence how the husband funded this payment, or when it was made. The inference from evidence the husband gave about an alleged agreement that the wife would not contribute to payments on the mortgage is that the mortgage loan had not been repaid at the date of cohabitation. There is no evidence of the equity the husband had in this property at the commencement of cohabitation. It is now unencumbered.
At the commencement of the parties’ cohabitation, the wife said she owned a motor vehicle and some furniture. She said the husband did not have a registered motor vehicle. In cross-examination the husband said he had a car at the commencement of cohabitation.
The husband gave no specific evidence in chief of owning any motor vehicles at the commencement of cohabitation, but he asserted that the wife “used my vehicles for the whole of the relationship”. He also said that “towards the end of the relationship” the wife only had a motor scooter.
The wife was not cross-examined on her evidence that the husband did not own a registered car at the commencement of cohabitation, and it was not put to the husband in cross-examination that he did not then own a car. He did say in the course of cross-examination that he then owned a car and was not challenged on the statement. I accept that he did then own a car, the value of which is unknown, but which he subsequently gave away. I also accept the wife's evidence that she owned a car, the value of which is unknown, at the commencement of cohabitation.
During the parties’ cohabitation the husband left the handbrake off when he parked a motor vehicle owned by the wife on a slope. By the time gravity had finished with it, the vehicle was a “write off”. There was no evidence whether the vehicle was insured. The wife made no mention of this incident in her evidence. It was not suggested in the wife's case that the husband's role in the loss of this vehicle ought to be taken into account against him, for example as constituting culpable waste of an asset (see Kowaliw & Kowaliw (1981) FLC 91-092).
The husband gave evidence in cross-examination that after the wife's vehicle was written off, she bought another one for $4000. A few months after he gave away the vehicle he had at the commencement of cohabitation, he said he bought the wife's car from her for $3000. He retains this vehicle, which he said had not been registered since about 2000. This vehicle was not disclosed in the husband’s financial statement, and he was not cross-examined about that non-disclosure. The inference is that this vehicle would be worth very little although there is no evidence of its value. When this vehicle became unregistered, the husband bought another vehicle, which was destroyed in late 2009 or early 2010. Again there was no evidence whether the vehicle was insured. I accept this evidence of the husband about the motor vehicles, it being uncontradicted by any other evidence.
The husband said that the wife sold a [car] for $10,000 and [another car] for $5000 in the twelve months before separation. In cross-examination, the wife agreed that she owned these vehicles and that she disposed of them before separation. She could not remember when she did so. The husband did not cross-examine the wife about what she did with any proceeds she received on disposing of each vehicle. There was no evidence of when or how she acquired these vehicles. It was not suggested that the wife had retained cash savings at the date of separation.
In the result, I am satisfied that the wife owned a registered motor vehicle at the commencement of cohabitation. There is no evidence of its value. I am satisfied that the husband owned a motor vehicle at the commencement of cohabitation. I am unable on the evidence to make a finding whether this vehicle was registered. There is no evidence of its value. At separation the wife owned a motor scooter and the husband owned two motor vehicles. There is no evidence of the value of any of the motor vehicles at the date of separation. I am satisfied that the husband now owns an unregistered motor vehicle which is more than ten years old, it being unregistered since 2000. I infer it is of little or no commercial value.
At separation, the wife owned some shares. She subsequently sold them for $7972. She did not give evidence and was no cross-examined about what she did with the proceeds. Nor was there any evidence as to when or how she acquired these shares. The clear inference is that they were acquired by her during cohabitation, as she did not disclose owning any shares at cohabitation. There is no evidence to suggest the proceeds of sale were disposed of in circumstances that would warrant the proceeds of sale or any part of them being brought to account in the pool of divisible assets (Townsend & Townsend (1994) 18 Fam LR 505, (1995) FLC 92-569).
At separation, the husband owned 800,000 shares in [E] and 100,000 shares in [R]. The evidence is somewhat unclear, but I infer that he purchased these shares using part of the funds he received when he sold his interest in [the C] business, referred to later. There is no direct evidence when he acquired these shares or at what cost. After separation, he bought a further 650,000 shares in [E] and 900,000 shares in [R] at an unspecified cost using funds he received from his mother as a gift.
Both parties have superannuation interests. There is no evidence about either of their interests, other than the fact they presently exist and their agreed values.
The parties’ employment history since cohabitation commenced
Wife
It was common ground that the wife was in employment throughout the parties’ cohabitation.
At the commencement of cohabitation the wife was working full time [in a trade] and also casually [omitted].
In 1998 the wife commenced a [A] business with a business partner. Each partner contributed $5000. The wife borrowed her $5000 from a bank and subsequently repaid it. The husband was not involved in any way in the operation or ownership of this business.
In late 1999, the wife and her business partner bought a second [business]. The following year they sold one of the [businesses]. There is no evidence about the financial aspects of these transactions.
In 2001, the wife bought out her partner in the [A] business. The wife's mother lent the wife $8000 for this transaction, which the wife subsequently repaid to her.
In late 2003 the wife sold her [A] business for $10,000. After payment of what the wife referred to as “the rest of the loan” and bills, there was very little left.
The husband asserted in his evidence in chief that when the wife sold her [A] business, she did not adhere to a verbal agreement with her former partner in that business, and still owed her former partner money. He relied on an unsworn statement from a person asserting she was the former business partner of the wife in the [A] business and that only $15,000 of a $20,000 loan she and her husband had made to the business had been repaid. This assertion cannot affect the matters now being decided for several reasons, namely-
a)There is no admissible evidence of an agreement such as asserted by the husband.
b)As previously mentioned, I can place no probative value on the unsworn statement about this that the husband annexed to his affidavit.
c)The wife did not admit owing money to her former business partner.
In any event, even if there was evidence on which I could find that the wife owed the debt the husband asserts, it would be a matter favouring the wife's case, not the husband's case, as it would increase the disparity between the parties’ respective financial positions, a matter relevant both on the issue of hardship to the wife in relation to the application to extend time for the property settlement application (s.44(4)), and in relation to property settlement itself (s.75(2)).
The husband said that the wife worked in her [A] business from 7.30am to 5.30pm Monday to Friday and from 8am to 1pm on Saturday each week. This evidence was unchallenged and I accept it.
By the time the wife sold the [A] business she had commenced a [B] business at a local [omitted] centre. She paid the [omitted] centre proprietor “rent” and was paid directly by her clients. The husband said the wife's hours of work in this business were from between 7am and 7.30am until between 6pm and 8pm Monday to Friday and from between 7.30am and 8am to between 12.30pm and 1pm Saturday each week. This evidence was unchallenged by the wife and I accept it.
The wife commenced a new business on 1 July 2007 in partnership with her current de facto partner. The [D] business [omitted] is operated from the home of the wife's partner. The wife's partner does not work in this business. He has full time work. The wife operates and manages the business.
Husband
The wife said that at the commencement of cohabitation the husband was unemployed. She also said that “early on” he worked at a local school [omitted] one day a week. She said she did not know how long he worked there for.
The husband's evidence in chief as to his employment during cohabitation was very vague. He said that “while in the marriage” he was a “partner” in a [C] company [omitted], and also worked [in a trade]. He said he ceased his involvement in the [C] company in 2002 and continued doing some part time [work as a tradesman].
In cross-examination the husband said that he [used his trade] at a local school, working eight hours a day three days a week at $15 per hour (that is, earning $360 per week) for about two years up to about 1995.
Because of the inconsistencies in the wife's evidence as to when the parties commenced cohabitation, I prefer the husband's evidence that he was in employment at the commencement of cohabitation over the wife's evidence that he was then unemployed.
It was common ground that the husband at no stage received Centrelink benefits.
The husband and a business partner started the [C] business. It is unclear when. The wife said it was shortly before she commenced her [A] business, which occurred in 1998. Both parties seemed to speak of this business commencing after they commenced cohabitation. However, the husband in cross-examination suggested this business commenced in 1994, which was before cohabitation commenced. Later in cross-examination he said it commenced in 1995. He said he had his previous job as a part time [tradesman] until about 1995. He said he continued his [trade] for between a few months and a year after the [C] business commenced. Doing the best I can on the uncertain evidence, it seems most likely that the [C] business commenced in 1995, after the parties commenced cohabitation, and that the husband continued with his part time [trade] job for a short time after the [C] business commenced.
The husband worked in this business from early morning to late at night seven days a week, but it seems he did a significant amount of the work from home.
It was common ground that the husband did not initially draw a wage from the [C] business. The husband said in cross-examination that this was for the first few years of operation of this business. He denied that the [C] business was “very successful”.
The husband's business partner bought him out in 2002. The husband received $50,000 for his interest in the business and $25,000 in back pay, he having gone without pay for the six months before selling his interest in the business to his business partner.
The husband did not work for three years after selling his interest in the [C] business. He used part of the $75,000 in total that he received on leaving that business to meet expenses until he obtained a part time [trade] job at [omitted] in 2005. He also used $43,000 of these funds to buy some shares, and used more of these funds to pay for home renovations, referred to later.
Since separation, the husband has purchased further shares, as referred to earlier in these reasons.
Financial contributions since cohabitation commenced
During their cohabitation, the parties kept their finances separate.
The wife said that from the commencement of cohabitation and continuing until the parties’ separation, she paid an unspecified sum of money weekly into a “kitty” system. She said food and bills were paid from money in the “kitty”. The wife said that she did the grocery shopping for the household, using money from the “kitty”.
The husband said in re-examination that both parties contributed usually $50 per week to the “kitty” and that it was used only for food purchases. He said that they each would put in more if more was needed.
The wife's sister said that she was at the matrimonial home on occasions when the husband would take the wife's money “for the bills” and put the money in the “Kitty jar”. She did not explain how she came to the belief that the husband was taking the wife's money “for the bills”. The wife did not assert the husband took her money and put it in the kitty. Rather, her evidence was that she put her own money in the kitty. As mentioned, the husband did not seek to cross-examine the wife's sister. However, the inconsistencies between the wife's evidence and the evidence of her sister on this aspect of the case in my view means that the sister’s evidence does not corroborate the wife's evidence.
What appears to be common ground on both parties’ evidence is that the wife contributed money to the kitty. The only quantification of what she contributed is the husband’s evidence that it was $50 per week, or more if needed.
The husband denied that rates, “rent” or bills were covered by money from the kitty. He said that he paid all of the house repayments, rates, phone bills and heating bills for the entire period of the parties’ cohabitation. However, he gave inconsistent evidence about payment of gas and electricity bills. In his evidence in chief he said he paid “most” of the electricity and gas bills. In cross-examination he at first said he alone paid for the gas and electricity. Later in cross-examination he said that the wife paid the electricity and gas for a short period before she commenced the [A] business. The [A] business was commenced shortly after the husband commenced the [C] business. The wife said that until the husband commenced drawing a wage from the [C] business, she helped financially with the household costs. There thus seems to be some consistency in the parties’ evidence that at least for a short time around the time the husband commenced the [C] business, the wife's financial contributions to the household expenses were more extensive than they otherwise were.
Ultimately, I am satisfied that the wife made a greater contribution to the expenses of the household than the husband conceded. The evidence does not enable me to make specific findings as to payments of particular sums of money, for specific bills or generally. However, it is not necessary to do so to make an assessment of the parties’ financial contributions, there being no evidence to suggest that either party wasted their funds during cohabitation, or retained significant savings at separation. The clear inference from the evidence is that each party used their funds to meet the various expenses of the household and of the individual members of the household during their cohabitation.
It was agreed that the wife paid for all her children’s education expenses and all their sporting activities. I accept the wife's evidence that she paid for her children’s clothing. I also accept the wife's evidence that while the husband was generous with presents for her children at Christmas and birthdays, he paid nothing else for them, but I accept that evidence only in relation to expenditure exclusively referable to them. The home in which they lived was owned before cohabitation by the husband, and they undoubtedly were users of the gas, electricity and other utilities which the husband paid or to which he contributed. He thus did make other financial contributions to her children.
The wife said that her [A business], which she acquired in 1998, “employed” her children after school for pocket money. The children turned 12 and 10 in 1998. The husband said that in fact the children just “pottered around” in the [A business] until the wife put her daughter on the books formally as an employee when she turned fifteen. I accept that the wife could not have employed her children when they were under age, but that they may have given some small assistance from time to time, commensurate with their ages, and that the wife gave them pocket money in return for what were in effect chores the children did at the [A business].
The husband said that the father of the wife's children made no financial contribution to their support during the time they were members of the parties’ household. This was unchallenged evidence and I accept it.
The wife said that regularly while the husband had an interest in the [C] business, she and her daughter answered phone calls for the business at the matrimonial home, and attended to people coming to the matrimonial home to pay accounts, taking cash and cheques in payment. She said she attended the home of the husband's business partner “to deliver messages and money and anything else that was required to be delivered”. The wife said the husband used her motor vehicle to attend to work in connection with the [C] business without payment to her, although he bought a set of “Mag” wheels for her car as a birthday or Christmas present once. She said neither she nor her daughter was ever paid for work done for the [C] business.
In cross-examination the husband denied that the wife and her daughter performed significant unpaid work for the [C] business. He said that they occasionally answered the phone at home when a call for him relating to the business came through, and that the wife on a few occasions helped with some paperwork. He said he usually answered the phone, or was there if the wife or her daughter answered what was a business call, but conceded that the wife and her children on rare occasions took phone messages for him. He denied that the wife received any payments from customers of the business at the matrimonial home. He said that whenever he was not at the home, neither was the wife. He also denied that the wife had to drive to the [C] business office with messages, saying she was at work during the day.
The wife bears the onus of proof of matters in support of her case. This is one of them. To the extent the evidence of the parties differs, I cannot prefer the wife's evidence over the husband's as I am not satisfied that the husband was untruthful or otherwise unreliable either generally, or on this particular matter. I note that the wife did not call her daughter as a witness to corroborate her evidence, and there is no evidence to explain why. I must therefore infer that her daughter’s evidence would not have assisted the wife's case. I therefore find that the assistance the wife and her daughter provided in doing any work in connection with the [C] business was relatively minor.
After the wife bought the first [A business] in 1998, she regularly brought home food and cleaning products from her [A] business for home use. The husband said that the food and cleaning products the wife brought home to use from her [A] business were “minimal”, comprising “bread, milk, etc”. The husband asserted in cross-examination that the parties had a home internet connection provided free of charge through his [C] business. Yet he said that taking stock from the [A] business for private use “without paying tax is fraudulent”. There is no evidence the stock taken for private use was inappropriately treated for tax purposes.
As previously mentioned, I cannot place any weight on the unsworn statement of a person said to be the wife's former business partner annexed to the husband's affidavit, which the husband said verified his allegation of tax fraud, even though the statement in fact provides no verification of that allegation at all. In any event, if the husband knew that the wife was dealing with the stock fraudulently, he was complicit in the wife's actions, as he gave no evidence of ever challenging the wife about her conduct or of refusing to consume or use stock she brought home. I note the husband gave no evidence of how the [C] business treated the free [C] service it provided to the parties’ home for tax purposes. I certainly do not infer any impropriety by the husband from that, but there appears to be a not insignificant degree of hypocrisy in the husband making unsubstantiated allegations against the wife of tax fraud, allegations that he did not put to the wife in cross-examination.
It was the unchallenged evidence in the wife's case that during the time she owned the [A] business, the husband regularly came in for a free meal. Sometimes he brought friends, and he would on those occasions give the wife $5.
The wife's mother said that when she, the parties and the wife’s children went out for birthdays or special occasions together, which occurred on “several occasions”, the wife always paid for herself, the husband and her children. The wife's sister gave similar evidence of going out socially with the husband and wife and the wife always paying for herself and the husband. Neither witness was cross-examined by the husband, and I accept their evidence.
As mentioned, there was a period, probably of about 18 months, after the husband commenced the [C] business when he was not drawing a wage and had ceased the part time [trade] job. He said in cross-examination that he sold a small parcel of shares for about $8000, to meet living expenses when he was not drawing a wage. He said that he did so to keep himself and the wife's children alive. However, he then said that the wife's children did not come to live in his house until after he commenced to draw a wage from the business, and that the children were not living with them when he sold the shares. There is no evidence of how or when the husband acquired these shares. Even though their sale was relatively soon after cohabitation commenced, the absence of any evidence that the husband owned these shares at the commencement of cohabitation means I cannot take the contribution of the proceeds of sale of the shares into account in favour of the husband.
The husband used the money from the sale of his interest in the [C] business, which totalled $75,000, to purchase shares, to pay for some home improvements, and for living expenses between 2002 and 2005.
The wife suggested that the husband obtained significant benefit by driving her motor vehicles during cohabitation. The husband sought to minimise the extent to which he did so. The husband also sought to suggest that the wife drove his motor vehicles throughout the parties’ cohabitation. The lack of clarity in the evidence about car ownership and the conflict in the evidence does not enable me to make specific findings. However, it would be wholly unremarkable if on occasions the wife drove vehicles owned by the husband and the husband drove vehicles owned by the wife. The evidence does not give rise to any greater contribution by one party or the other in relation to the use of motor vehicles.
At separation the wife left the former matrimonial home. Her son remained living with the husband in the former matrimonial home until about September 2009, when he moved to live with the wife. He was aged 20 at separation and was an apprentice [omitted]. He paid no board either before or after the parties separated, although after separation and before he moved to live with the wife, he occasionally paid the husband a small amount towards the electricity and gas bills.
Non-financial contributions since cohabitation commenced
Housework and child care
The wife said she packed her children's school lunches and made their breakfast if she was not working, or is she was working she would leave something for them. The husband denied that the wife packed the children’s lunches, but then conceded that the mother did sometimes pack the children’s lunches. I prefer the wife's evidence on this point due to the inconsistencies in the husband evidence.
The wife said the husband had a boarder in the house “until mid 95”, and that this boarder returned between 2001 and September 2002. She said a second boarder lived there in about 1994 to early 1995, which would seem to have been before the parties commenced cohabitation, and again from June to December 1997. There was an issue about whether one of the boarders returned for the second period asserted by the wife. I am unable to resolve that controversy.
The wife said she cooked for the household, including the boarders when there, and said she did the cleaning and washing for the parties and the children, and washed the linen and towels for the boarders when they were there. She said the husband did minimal cleaning, and she would help the children clean their own rooms. The husband said he cleaned and cared for the home 98% of the time, and that the wife was only involved in cooking meals.
The wife's sister said she visited the parties’ matrimonial home every second weekend and observed the wife do most of the cleaning and all of the cooking. She said she saw the husband use the vacuum cleaner “on the odd occasion”, and that the husband “did the yard work such as keeping the lawns done and keeping the garden nice”. The husband did not seek to cross-examine this witness, and I accept her evidence.
The wife's friend said that when at the parties’ matrimonial home, she observed that the wife always did the cooking and the cleaning away without any help from the husband. The husband did not seek to cross-examine this witness, and I accept her evidence.
The husband said in cross-examination that the wife did the cooking, saying she was a very good cook, but he denied that the wife performed any cleaning or washing. He said he did all the cleaning, and that everyone in the household, including any boarders from time to time and the wife's children from when they moved into his home, did their own washing. However, when pressed about the cleaning, he said that if they were putting on a party, they both cleaned all day, and hence his prior evidence that he did all the cleaning and the wife did none was incorrect.
I prefer the wife's evidence as to her cooking, cleaning and washing, as parts of that evidence were corroborated by unchallenged witnesses, and because of inconsistencies in the husband’s evidence about the cleaning.
The wife said her children “would come to the [A business] after school” after coming to live with her and the husband in 1997, so that the husband was not responsible for their after school care. The wife did not acquire an interest in the [A] business until the year after the children came to live with the parties. The husband conceded that on occasions the children went to the [A business] after school, but on others he said they came home into his care.
The husband said that he was the one who cared for the wife's children while she spent long hours five and a half days a week working in her [A] business and then in her [B] business. He said the wife did not take time off during school holidays to care for the children, and that he did so. I note that when the wife first acquired the [A] business, the children were aged approximately ten and twelve, and they were aged fifteen and seventeen when she disposed of that business and commenced the [B] business. I also note the husband's evidence in cross-examination, when denying the wife's assertion of doing the cleaning and washing for the household, that the children were quite self-sufficient from when they first came to live with the parties in the year before the wife commenced the [A] business. I have difficulty reconciling the husband's assertion that he made a very extensive contribution to the care of these children with his evidence that they were self-sufficient from when they came into the parties’ household. Nonetheless, to the extent the children required care, supervision and nurturing, the import of the husband's evidence was that he was available to provide that far more than the wife because of her work commitments outside the home.
In cross-examination the wife said that she never took holidays during cohabitation and when the children lived with the parties. She said that during school holidays the children worked with her in the [A] business. Before the wife commenced the [A] business, she said that the parties shared the role of caring for the children during school holidays, as she was working a “split shift”.
The husband denied that the wife alone looked after the children except for a period when they shared child care during school holidays, saying he was at home and the wife was at work, and thus he was the one available to care for the children. He said the wife was away from the home for long hours when she owned the [A business] and that while the children spent some time at the [A business] and did some work there, they also spent time with him during the school holidays.
It is not possible to make precise findings as to the share of care of the children by each party. I cannot prefer the evidence of one over the other on this issue. To the extent to which either party may seek to rely on a greater involvement in the care of the children than is conceded by the other, in my view they have failed to prove their case on the balance of probabilities. I take the view that on the state of the evidence, I could not find that either party was more involved than the other in the care of the children.
The wife said she did the shopping, using funds from the “kitty”. The husband said the wife did the shopping some of the time, but not the majority of the time. I cannot prefer the evidence of one party over the other on this issue.
Home renovations
During the parties’ cohabitation, the husband carried out renovations to the matrimonial home. The wife said an electrician friend of the husband’s did the electrical work, and that otherwise the husband did the work himself. She said the husband-
a)Relined the kitchen walls, combined the kitchen and dining area, and installed a stove and microwave;
b)In the lounge room, relined the walls and installed double glazed windows;
c)In her son’s room, commenced relining the walls, but did not finish;
d)In the main bedroom, installed a sky light;
e)In the “shed/granny flat”, supplied the materials with which a boarder made “a room or granny flat that was habitable”;
f)Laid bricks and made and “entrance area” on the driveway.
The wife said she assisted the husband with the driveway and entrance. She said she also assisted the husband carry things into the house if he requested her assistance, an occurrence she described as “not uncommon”. The wife's sister said sometimes the wife helped the husband carry something or hold something and “just generally helping him out”. She was not cross-examined and I accept her evidence.
The husband said that home renovations were carried out by himself with “no help” from the wife. He said they were paid for solely by him. The husband described the work he performed as-
a)Nine months work building “a very unique and ornate kitchen and dining room”;
b)Built 21 kitchen cupboards, a dining table and chairs and “a very large” coffee table;
c)Lined five ceilings with stained timber;
d)Built six “very large” double glazed windows and “very large and detailed” pelmets;
e)Bought $2000 worth of double curtains;
f)Built six “large highly ornate columns for structure support and decoration”;
g)Bought $2500 worth of new kitchen appliances, including gas top cooker, built in electric stove, fridge, microwave and range top exhaust
h)Built two linen and pantry cupboards;
i)Laid 2500 brick pavers to renew the driveway and garden path; and
j)Removed the front lawn and laid 1500 bricks as a second parking area.
In cross-examination, the husband said the $2000 for curtains and the $2500 for kitchen appliances came from the money he received on leaving the [C] business, and from a small amount of savings in the bank.
The husband also said he provided the materials with which a boarder converted a garage area into a habitable space.
The husband asserted that the kitchen he installed would have added more than $20,000 to the value of the home. While I accept this is the husband's belief, he is not a property valuer, and is not qualified to give admissible evidence on this point. There is no evidence from a qualified expert valuer about what impact, if any, any of the work done to the home during the parties’ cohabitation, or since, may have had on the value of the property.
In cross-examination, the husband denied that the wife assisted him in doing the ornate woodwork in the home improvements, saying he did the work during the day while the wife was at work. He said the wife’s assistance was “minimal”. This is inconsistent with his evidence in chief that the wife gave no help at all.
In the circumstances, I prefer the wife's evidence over the husband's as to the extent of her assistance in the home renovations, due to the inconsistency in the husband's evidence about the assistance the wife rendered, and the fact parts of the wife's evidence were corroborated by her sister, who was not cross-examined. However, even on the wife's version of events, the husband was the one who did the work, other than electrical work, and her assistance was limited.
The husband said that after separation, he did further renovations, as follows:
a)Clad two sides of the home “in a very unique way”, and clad the double garage;
b)Built two more double glazed windows;
c)Built seven clothes cupboards and three sets of cupboards with 28 drawers;
d)Spent “an enormous amount of hours” doing landscaping and gardening, including bringing in ten tonne of rock to form garden beds.
The picture the husband attempted to paint of having performed extensive renovation work on the home increasing its value is quite misleading. In cross-examination the husband said that in fact he has only done half the work so as not to increase the value of the home and inflate any amount he may need to pay the wife. There is no ceiling in one of the bedrooms and he consequently is unable to properly heat the home, and there have been only three working power points in the home for the last three years.
Alleged agreement that wife would make no property claim
The husband asserted there was an agreement between the parties that the wife would not contribute to any mortgage payments or repairs or renovations to improve the matrimonial home, so that if she left him, “she would not have any claim on my house and there would be nothing to split”. He said that “prior to our marriage” he and the wife agreed that she would make no claim on his property. He said the wife “would say” that he need not worry as she would never take his property off him. He said that when the wife left, she offered to see a solicitor to sign papers as she did not want anything, and he responded that he trusted her. The husband was not challenged on any of this evidence, and I accept it.
The wife agreed that shortly after separation she told the husband's uncle that she had no interest in the husband's assets and would just walk away. The wife sent the husband an SMS message in mid 2008, after her solicitor had written to the husband about a property settlement, saying she did not intend to press for a property settlement.
I accept that the husband believed he had an agreement with the wife that she would make no claim on his property. He said that he carried out renovations to the matrimonial home after the wife left, and that “there is no way in the world would I have done any renovations and improvements to my house if I thought there was going to be a claim or property settlement made by the applicant on my house”. However, the husband also said he left work he was undertaking on the home unfinished because he did not want to improve the value of the property and hence risk having to pay the wife a greater sum by way of a property settlement.
Chronology of wife's raising of property settlement claim and expiry of limitation period
On 14 February 2008, the wife's solicitor wrote to the husband making a proposal for property settlement. The husband did not reply to the wife's solicitor despite receiving the letter. However, after receiving the letter the husband went to the wife's home and spoke to her about it, and later sent her a letter referring to the agreement he said existed between them.
The wife's solicitors wrote to the husband on 31 March 2008 seeking a response to their earlier letter. The husband again failed to respond. The husband denied receiving this letter. I have no reason to doubt him.
On 17 July 2008 the wife sent the husband an SMS message stating she did not intend pursuing her property settlement claim.
The wife's solicitors again wrote to the husband on 23 October 2008 noting his failure to respond to the earlier letters and in effect stating that the wife intended commencing proceedings. The husband received this letter. When he was not thereafter served with any court papers about a property settlement, the husband believed that the wife had again “dropped” the matter.
The time for instituting property settlement proceedings in this case expired on 6 June 2009. The wife's solicitor failed to diarise the expiry date of the limitation period for the wife to bring property settlement proceedings. The Certificate of Divorce issued by the court and annexed to the wife's solicitor’s affidavit was addressed to the wife personally at her correct address, and clearly sets out the limitation period for bringing property settlement or spouse maintenance proceedings. There is no evidence to suggest that the wife did not know of the limitation period. I am satisfied on the evidence that the wife knew of the limitation period from shortly after the divorce order took effect at the latest.
On 29 July 2009, the wife's solicitors sent the wife's application for property settlement dated 1 July 2009, financial statement dated 1 July 2009, and supporting affidavit dated 22 July 2009, together with an affidavit of the wife's solicitor dated 28 July 2009, to the court for filing. They were filed on 2 August 2009, 57 days after the limitation period expired. The husband was contacted by the local Sheriff’s Office to make an appointment for service of the wife's documents on 17 August 2009.
The wife's solicitor said that the wife reconsidered whether it was worthwhile pursuing a property settlement application after her correspondence to the husband failed to elicit any response. It is unclear whether this referred to the solicitor’s letter of 14 February 2008 and the follow-up reminder of 31 March 2008, or after the letter saying proceedings would imminently be instituted dated 23 October 2008.
There is no evidence when the wife gave the instructions that resulted in the application being filed on 2 August 2009, but bearing in mind the date of the application and her financial statement, it must have been before 1 July 2009, that is, no more than 24 days after the limitation period expired. There is no suggestion on the evidence that the wife gave those instructions before the limitation period expired.
The wife gave no evidence why she did not instruct her solicitor to proceed with a property settlement application before the limitation period expired. The evidence of her solicitor having failed to diarise the final date for filing an application in time in my view cannot explain the wife's inactivity when she knew of the limitation period. The wife was clearly ambivalent about bringing property settlement proceedings, but nonetheless she knew of the time limit to do so.
Parties’ current financial positions
Wife
The wife is in a de facto relationship, and has been for three years. As mentioned, she and her de facto husband are partners in [D] business conducted from the wife's de facto’s home. The wife alone works in that business.
In her financial statement sworn on 15 July 2010, the wife stated that this business runs at a loss of $1,280 per week but provided her with benefits in the form of motor vehicle expenses and mobile phone worth $143.32 per week. In a financial statement sworn only eight days earlier, the wife said her income from her business was $1,000 per week. She was not cross-examined on this discrepancy.
The wife's de facto husband earns $969 per week, and she said he provides her with benefits in the form of household bills of $250 per week and petrol expenses of $60 per week. The wife's financial statement sworn on 15 July 2010 also suggests the wife receives assistance from her partner in the form of credit card payments of $50 per week, a total of $360 per week. However, in the financial statement sworn eight days earlier, there is no mention of credit card payments. Rather, that statement suggests the wife is receiving a benefit from her partner in the form of mortgage payments of $390 per week. Again, the husband did not cross-examine the wife on these discrepancies.
I also note that over this same 8 day period between the wife's financial statements, the minimum payment on her [C Bank] Mastercard had halved, from $100 per week to $50, and the minimum repayments on her [G Bank] loan had gone from $100 to $150 per week. The actual payments on these loans went from $25 to $12.50 per week on the Mastercard and from $25 to $37.50 for her [G Bank] loan.
Otherwise, the wife's property, liabilities and financial resources are dealt with later.
Husband
The husband is a qualified [omitted] tradesman. He said he regularly checks the local newspaper for employment opportunities in his trade, but none are available. He at first denied having looked for work in a larger regional centre near his home town, saying he was being loyal to his current boss and town. However, he then said jobs from the nearby regional centre appear in his local newspaper, so he has looked for work there.
The husband said he works usually between three and five hours one day a week doing [a trade], and he works five hours per day two days per week [doing labour]. The [trade] and [labouring] work is done [locally]. He has also started some work at a motel [omitted].
His financial statement discloses total income of $367.82, describing himself as a [tradesman]. In the absence of cross-examination to suggest to the father that his actual income from these various jobs was not fully reflected in his financial statement, I accept that it is, even though his work goes beyond work as a [tradesman] as stated in his financial statement. The husband has outgoings of $33 per week for rates.
The husband disclosed four separate share holdings. In relation to his shares in [E] and [R], he only owned 800,000 and 100,000 respectively at separation. His current share holdings in these companies are 1,450,000 and 1,000,000 respectively. As previously mentioned, he used money provided by his mother after separation to buy the balance of these shares.
The only debt the husband disclosed was a debt of $35,000 owing to his mother. When questioned about this “loan”, the husband said that his mother had helped him out, that he asked her how much he owed her and she said it was $35,000, although he did not believe it was that much. He said he never asked his mother for any money, saying he would never borrow money. He said he does not have to repay his mother, but that he intends to do so. In the admitted absence of any obligation to repay this money, the husband does not owe his mother anything and there is no liability. However, the money he received from his mother is a financial contribution on his behalf which must be given appropriate recognition when assessing contributions.
The husband said that he has a “girl friend”, Ms G, who “lives part time with me”. An unsworn statement by a Ms B, annexed to the husband’s affidavit, would appear to contradict the part time nature of this relationship. However, as previously mentioned, unsworn statements are not probative and the husband was not cross-examined on any inconsistency between his affidavit evidence and the content of this statement annexed to his affidavit. I therefore cannot take this statement into account in any way. The husband was not cross-examined about the financial aspects of his part time cohabitation with his “girl friend”, who was not referred to in his financial statement.
The applicable law
Property settlement
Property settlement proceedings fall to be determined by reference to s.79, Family Law Act 1975. The court may make such order as it thinks appropriate (s.79(1)), but must not make an order unless satisfied it is just and equitable to do so (s.79(2)). In deciding whether to make an order, and if so what order, the court must have regard to those of the considerations in s.79(4), including s.75(2), the provisions of which are incorporated into s.79(4) by reference, as may be relevant in a particular case.
In Hickey & Hickey; A-G for Commonwealth (Intervener), [2003] FamCA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355, the Full Court explained the preferred approach in determining property settlement proceedings under s 79, as follows (FamCA at [39]; FLC at 78,386; Fam LR at 370):
“39. The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEJ and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.”
Where the pool of divisible assets and resources includes a superannuation interests, the Full Court in C v C [2005] FamCA 429, (2005) 33 Fam LR 414, (2005) FLC 93-220, considered the approach that should be taken. The majority said:
“63. However, given the conclusions we have reached above, we consider that the preferred approach to the determination of property settlement cases must be to prepare in addition to the list of items of property (which would clearly fall within the definition of that term in s 4(1)), a separate list containing any superannuation interest or interests (valued according to the Regulations if a splitting order is sought in any application before the Court, or if no such order is sought, valued either according to the Regulations or otherwise).
…
65. In summary, then, the trial Judge has a discretion as to how superannuation interests will be treated in a particular case. If superannuation is not included in the list of property but rather made the subject of a separate pool, it will be necessary where a splitting order is sought, or extremely prudent where no such splitting order is sought (in order to ensure that justice and equity is achieved) to:
(a) value the superannuation interest (according to the Regulations if an order under Part VIIIB is sought or according to the Regulations or otherwise if no order is sought);
(b) consider and make findings about the types of contributions referred to in s 79(4)(a), (b) and (c) which have been made by the parties to the superannuation interests on either a global approach or an asset by asset approach depending on the circumstances;
(c) consider the other factors in s 79(4) being the matters in s 79(4)(d), (e), (f) and (g); and
(d) ensure that pursuant to s 79(2) the orders in relation to the parties’ property, and any order under Part VIIIB in relation to superannuation interests are just and equitable.
66. In the context of a consideration of the matters referred to in sub-paragraphs (b) and (c) of the last paragraph, the following matters may well be relevant: the relationship between years of fund membership and cohabitation; actual contributions made by the fund member at the commencement of the cohabitation (if applicable), at separation and at the date of hearing; preserved and non-preserved resignation entitlements at those times; and any factors peculiar to the fund or to the spouse’s present and/or future entitlements under the fund.”
In relation to the issue raised by the husband that the parties had an agreement that the wife would make no claim on his property, spouses cannot enter into binding agreements to surrender their rights as to property and maintenance under the Family Law Act other than in accordance with that Act. Up to 27 December 2000 the requirements to do so were set out in s.87, and since then they are to be found in Part VIIIA. In each case, a written agreement is required, as well as satisfaction of other legislated requirements. There was no written agreement to the effect the husband asserts, so there could not be any binding surrender of the wife's rights to seek property settlement against the husband.
The only way an oral agreement of the kind the husband asserts, or a written agreement to the same effect not complying with the requirements for a binding surrender of statutory rights to property or maintenance, could be taken into account in property settlement proceedings is if it is proven that the parties have implemented the agreement, or that one of the parties has altered his or her financial position irrevocably to his or her detriment (Gardiner & Gardiner, (1978) 4 Fam LR 517 at 528, (1978) FLC 90-440 at 77,244, Kenny & Kenny, (1983) 9 Fam LR 140 at 142, (1983) FLC 91-350 at 78,354, Hewitt & Hewitt, (1982) 8 Fam LR 327).
The husband suggested that he carried out renovations to the home, improving its value and hence potentially the value of the wife's property settlement, in reliance on the suggested agreement that the wife would not make a claim. He said that he would not have carried out this work if he believed the wife would make a property settlement claim. It may thus be open to the husband to submit that he altered his financial position to his detriment in reliance on the suggested agreement.
However, I am not satisfied that the husband altered his position irrevocably, in the sense that what he allegedly did in reliance on the agreement could not now be adequately reflected in any property settlement orders. The work he carried out on the matrimonial home after separation, allegedly in reliance on the wife's agreement not to make a property settlement claim, can be given appropriate recognition when the court assesses the parties’ contributions under s.79(4). If they could not adequately be taken into account under s.79(4), they could be taken into account under s.75(2)(o).
It was open to the husband to call valuation evidence as to any increase in the value of the home attributable to any work he did on the property after separation. He could also have called expert evidence to place a commercial value on the work he performed on the home. He could have argued that he be given appropriate credit in relation to his post separation work based on such evidence, and the court could have protected his position. The fact that in the event the husband brought neither valuation evidence to establish that anything he did to the home improved its value nor any expert evidence to place a value on the labour and materials involved in effecting any of the renovations, does not alter the fact that on proper evidence, the court could give appropriate recognition to the post-separation work the husband said he did in reliance on the wife's assurances she would not claim against his property.
In any event, there is at best from the husband's perspective ambiguity in his evidence about performing work to his detriment in reliance on the wife's promises, as he said he only half did the work so as not to increase the value of the property and hence the sum he may have to pay the wife by way of property settlement. In fact, I am satisfied that this evidence contradicts his assertion that he altered his position to his detriment in reliance on the wife's promises.
I am therefore not satisfied that the oral agreement between the parties that the wife would make no claim on the husband's property is relevant or can be taken into account in assessing the respective property entitlements of the parties. To the extent it could be arguably relevant to the exercise of discretion whether to extend time for the wife to bring property settlement proceedings, I will deal with this later in these reasons.
Extension of time
The court has power to extend the time in which property settlement proceedings may be instituted, which power may be exercised before or after the filing of a property settlement application (s.44(3)). The power must not be exercised unless the court is satisfied that hardship would be caused to a party to the marriage or to a child if leave were not granted (s.44(4)). Even if satisfied such hardship would be caused if leave were not granted, the court retains a discretion whether or not to extend time (Whitford & Whitford, (1979) FLC 90-612, (1979) 4 Fam LR 754).
“Hardship” has been held to mean "substantial detriment" (Hall & Hall, (1979) FLC 90-679, (1979) 5 Fam LR 411),
In determining whether the applicant would suffer hardship if time were not extended, the court must consider-
a)whether on the applicant’s material he or she has a reasonable case to be heard by the court (Hall, FLC at 78,627, Fam LR at 417);
b)the financial and other circumstances of both parties; and
c)any other facts of the particular case relevant to the issue of hardship
If satisfied about hardship, in the exercise of the discretion to extend time, the court must consider-
a)the length of delay in bringing proceedings;
b)whether there has been a reasonable explanation of the delay;
c)the prejudice to the respondent which granting permission may cause; and
d)any other facts of the particular case relevant to the exercise of the Court's discretion, eg any prior order or provision made between the parties.
The absence of an explanation for delay is no more than a factor to be considered in the circumstances of the case, and does not necessarily mean the extension of time will be refused (Althaus & Althaus, (1979) 8 Fam LR 169, (1982) FLC 91-233; Carlon & Carlon, (1982) 8 Fam LR 729, (1982) FLC 91-272; Neocleous & Neocleous, (1993) 15 Fam LR 557, (1993) FLC 92-377).
Property settlement
The pool of divisible assets, liabilities and resources
There was no issue as to the pool of divisible assets and its value, apart from the suggested loan the husband said he owed his mother. As already mentioned, the husband's evidence is that there is no loan, although he feels a moral obligation to repay his mother the money she voluntarily gave him.
I find that the parties’ assets and liabilities are-
Item Description Title Amount 1 Former matrimonial home Husband $175,000.00 2 Husband's household contents Husband $5,000.00 3 Husband's [N Bank] account Husband $950.00 4 1,000,000 [R] shares Husband $4,000.00 5 1,450,000 [E] & [G] shares Husband $14,500.00 6 14,000 [M] shares Husband $9,000.00 7 40,000 [S] shares Husband $800.00 8 Wife's [N Bank] account Wife $361.45 9 Wife's [C Bank] account Wife $500.00 10 Wife's household contents Wife $1,000.00 11 Wife's half interest in motor vehicle Wife $15,000.00 12 Wife's half interest in partnership assets Wife $12,348.00 13 [N Bank] business Mastercard Wife -$4,193.82 14 [G Bank] loan Wife -$6,003.00 15 [C Bank] Mastercard Wife -$2,655.10 16 [Car] Finance - wife's half share Wife -$19,467.94 Total $206,139.59
I find that the parties financial resources comprise the following superannuation interests, the values being as agreed-
Item Description Title Amount 1 [H] Wife $7,513.00 2 [C] Financial Services Husband $47,191.00 Total $54,704.00
Assessment of contributions
It was submitted on behalf of the wife that her contributions to the non-superannuation asset pool should be assessed at 60%.
The unrepresented husband, unsurprisingly, did not articulate any particular percentage assessment for contributions. He submitted that he paid for almost all the accommodation costs and utilities and cared for the wife's children for the largest percentage of the time.
As I understand the husband's case, he felt that his financial and non-financial contributions in relation to the wife's children should be given particular weight as the children were not his own. This was not addressed in any depth in submissions on behalf of either party.
The court must take into account contributions by a party to the marriage “to the welfare of the family constituted by the parties to the marriage and any children of the marriage” (s.79(4)(c)). The circumstances in which a child is to be regarded as a child of a marriage include those referred to in s.60F. While this is not an exhaustive definition, in my view the inference from the section, and from decisions such as in Mehmet & Mehmet, (1986) 11 Fam LR 322, (1987) FLC 91-801 on the scope of s.79(4)(c), is that step-children are not included in the term “children of the marriage” for the purposes of the Family Law Act. In consequence, contributions to step-children who are members of the spouses’ household and hence have been regarded as part of the spouses’ family cannot be taken into account under s.79(4)(c). However, as Nygh J pointed out in Mehmet (Fam LR at 327, FLC at 76,064), contributions of this kind may be taken into account under s.75(2)(o). I will therefore deal with contributions in relation to the wife's children together with my assessment of the contributions under s.79(4)(a), (b) and (c).
The husband owned the home that currently exists at the commencement of the parties’ cohabitation, albeit it was encumbered and there is no evidence of the equity the husband then had in the property. Each of the parties owned a car.
The wife was in employment throughout the parties’ cohabitation. The husband was not. The husband was not in full time employment until the [C] business commenced, he then was without income for about 18 months and again did not draw any income for the last six months of his involvement in the [C] business. He was unemployed for three years after he disposed of his interest in the [C business].
There is no evidence of either party having cash assets at separation, or of either party engaging in unreasonably extravagant expenditure during cohabitation. I therefore am satisfied that each of the parties appropriately and relevantly contributed all income earned during cohabitation to meet household expenses, however the parties may have physically handled their funds for this purpose. However, the wife was in employment throughout cohabitation, and the husband was in part time employment for about two or three years, unemployed for three years, and employed but not drawing any income for about two years. Thus, the wife's contributions from income were considerably greater than the husband's.
The husband sold some shares for an unspecified sum and contributed the proceeds towards living expenses in the time he was not receiving any income after the [C] business commenced. The evidence does not establish he owned these shares before cohabitation. I therefore proceed on the basis he acquired them after cohabitation commenced, and the wife can therefore rely on indirect contributions to their acquisition.
The husband has made direct and indirect financial contributions to the support of the wife's children, for whom the wife received no child support from the children’s father.
The husband used an unspecified part of the proceeds of sale of his interest in the [C] business, proceeds to which the wife made indirect contributions, and his entitlements for the last six months work in that business for which he drew no wage, to contribute to living expenses over the ensuing three years. He also used these funds to pay for home renovations and to buy some shares.
The wife provided food and cleaning products for home use through her [A] business, and the husband regularly ate meals at the wife's [A business] free of charge. The wife regularly paid for herself and the husband when they went out socially. The parties had an internet connection provided through the husband's [C] business when he had in interest in it.
The wife performed some minor tasks in relation to the husband's [C] business, for which she received no pay.
The husband after separation received a gift of no more than $35,000 from his mother, an unspecified portion of which he used to buy additional shares in two companies. The wife made no contribution to the acquisition or conservation of these additional shares.
I am satisfied both parties made non-financial contributions in relation to work around the home, including cooking, which the wife did, cleaning and washing, which both parties did although I am satisfied the wife did more than the husband, care of the wife's children, which both parties did, and gardening and lawn mowing, which the husband did. The husband effected renovations to the matrimonial home before separation, with relatively minor assistance from the wife. The husband also commenced to effect renovations to the former matrimonial home after separation, but he intentionally did not complete them so as not to improve the value of the property and risk increasing the amount he may have to pay the wife by way of any property settlement.
In relation to the non-superannuation pool of assets, I am satisfied that overall the parties’ contributions should be assessed as equal. I have come to this conclusion after considering all the evidence in relation to contributions. However, of particular significance in my view is the duration of cohabitation, just under twelve years, that the husband was unemployed, underemployed or working without income for over half that period and that the wife's financial contributions from income were greater than the husband's, that the husband made direct and indirect financial contributions to the wife's children, that the husband provided the home the parties lived in, that the husband increased the shareholding after separation with funds to which the wife made no contribution, and that the husband made significant non-financial contributions to the wife's children.
It was submitted on behalf of the wife that her contributions should be assessed at 25%. The husband did not articulate any particular percentage for the assessment of contributions to the superannuation pool.
The wife's case for a 25% contribution to the superannuation pool was based on her contributions to the non-superannuation pool. It was said that these were indirect contributions to the superannuation pool.
There is no evidence as to any of the matters the majority of the Full Court in C v C, above, at [66], said may be relevant in assessing contribution and non-contribution considerations in relation to a superannuation pool, namely-
“(T)he relationship between years of fund membership and cohabitation; actual contributions made by the fund member at the commencement of the cohabitation (if applicable), at separation and at the date of hearing; preserved and non-preserved resignation entitlements at those times; and any factors peculiar to the fund or to the spouse’s present and/or future entitlements under the fund.”
The wife bears the onus of proving her case. Where it may be that both parties held the same interests in superannuation at the commencement of cohabitation that they hold now, the wife has failed to prove any direct or indirect financial contributions to the superannuation pool. The non-financial contributions, which need not be to the acquisition, conservation or improvement in value of any property, including a superannuation interest, in my view do not support an assessment of the wife's contribution to the superannuation pool of 25%, especially considering the non-financial contributions made by the husband to the wife's children. I take the view that the appropriate assessment of contributions in relation to the superannuation pool is in the proportions of the parties’ present respective superannuation interests.
Assessment of non-contribution considerations
I note the parties’ respective ages. There is no evidence that the working capacity of either party is impaired. The wife is in full time employment, the husband is not. I am not satisfied the husband has exhausted all reasonable avenues to secure full time employment. I am therefore not satisfied that his current income properly reflects his earning capacity. Both parties are in new relationships, the husband's being of a part time nature. The financial circumstances of the wife's present cohabitation are unclear, and the husband has not disclosed the financial circumstances of his present part time cohabitation.
On a contribution-based entitlement of 50% of the non-superannuation pool, the wife would be entitled to receive property worth $103,070. As her net position is presently a deficit of $3110, she would need to receive a payment of $106,180. The husband would be left with property worth $103,070. The husband would have his superannuation interest worth $47,191, and the wife would have her superannuation interest worth $7513.
Despite a significant disparity in the parties’ superannuation interests, and considering the difference in the parties’ ages, I am not satisfied any adjustment should be made to either the non-superannuation or the superannuation shares of each of the parties by reference to non-contribution considerations.
A just and equitable order
In his affidavit evidence the husband speculated on what would have happened had the parties not married, in support of his contention that the wife’s application should be dismissed. But the court is not concerned with a hypothetical situation that never arose. The parties did marry, and there are certain legal consequences of doing so. One is that if the marriage breaks down and the court is called on to determine the spouses’ respective entitlements to any property they have, jointly or individually, it must do so in accordance with the relevant provisions of the Family Law Act. I gave the father a copy of ss.44(3) and (4), 79 and 75(2) at the commencement of the hearing, and particularly drew his attention to ss.79(4) and 75(2) in relation to the relevant considerations in determining the parties’ respective entitlements to the property.
The husband in his affidavit evidence sought to equate the wife to boarders he has had in his home from time to time in suggesting the wife should have no interest in his home. Again that is not relevant, as he was never married to any of the boarders.
Subject to the wife succeeding in her application to extend the time to seek a property settlement, the wife's application, namely for the sale of the former matrimonial home and an equal division of the proceeds, has been made out. The sum she would receive on a 50% share of the non-superannuation pool is 60.7% of the value of the former matrimonial home, exceeding her claim. However, the court cannot make an order for a share of the property that is greater than that sought by the applicant.
The wife has proven her case for a sale and equal division of the proceeds of sale of the former matrimonial home, but she has not proven her claim for a superannuation splitting order.
Extension of time
Hardship
The wife has made out a claim for a significant property settlement. The wife otherwise has no significant assets. They in fact are exceeded in value by her debts. She is in full time employment and receives financial support from her de facto partner.
The husband owns the unencumbered former matrimonial home, and he owns shares. I am satisfied he has the capacity to work full time but chooses not to fully exercise his earning capacity. If time for the wife to bring her property settlement application is extended, the husband will lose his home, as he has no apparent capacity to raise the funds necessary to make an appropriate payment to the wife to settle her proven property settlement claim. This is a home he owned before the parties commenced cohabitation, albeit it was then encumbered and became unencumbered during cohabitation in part with the assistance of indirect financial contributions by the wife.
During cohabitation and immediately after the parties separated, the wife led the husband to believe that she would not make any property settlement claim. Even after she had solicitors write to the husband about a property settlement, she then told him she would not press for a property settlement. The wife had her solicitors write a further letter to the husband advising him property settlement proceedings would imminently be instituted, but they were not, and he believed that the wife again did not intend pursuing a claim. The wife instituted the present proceedings eight weeks and one day out of time.
Despite the wife's statements to the husband about not commencing or not pursuing a property settlement claim, the husband acted on the basis that the wife may nonetheless make such a claim, as he deliberately did not complete renovation work he undertook on the former matrimonial home so as not to increase its value and increase any sum he may have to pay the wife.
In those circumstances, I am satisfied it would cause the wife hardship, in the sense of "substantial detriment", if she was not permitted to pursue her property settlement claim out of time.
Discretion
As mentioned, the wife commenced proceedings eight weeks and one day after the limitation period expired. I am not satisfied she has provided an explanation for her delay. Her solicitor’s failure to diarise the expiry of the limitation period does not explain why the wife, fully aware of the limitation period as I am satisfied she was, did not instruct her solicitors to take action within time.
While extending time will result in the husband having to sell his home, I am satisfied that despite the wife's statements to him about not making a property settlement claim, he was aware she may do so and acted accordingly. I am not satisfied the husband would suffer any hardship that could not be fully taken into account in determining appropriate property settlement orders.
Despite the absence of a satisfactory explanation for the wife's delay, I am satisfied that because of the hardship the wife would suffer if not allowed to pursue her property settlement claim, when taken with the relatively short period by which her application was out of time and the fact the husband acted to some extent to protect himself from the possibility of a claim in relation to post-separation renovations, the court should extend time for the wife’s application.
Decision
I am therefore satisfied that time for the wife to bring her property settlement application should be extended to the day she filed her application, 3 August 2009. I am satisfied a property settlement order should be made to the effect that the husband sell the home and divide the proceeds of sale equally between the parties, with appropriate machinery provisions to carry the order into effect. Otherwise, the wife's application should be dismissed.
I certify that the preceding one hundred and sixty-five (165) paragraphs are a true copy of the reasons for judgment of Halligan FM
Date: 12 August 2010
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