J and J
[2002] FMCAfam 142
•17 May 2002
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| J & J | [2002] FMCAfam142 |
| FAMILY LAW – Property settlement – contributions – ss. 79 and 75(2). Lee Steere and Lee Steere (1985) FLC 91-626, Ferraro (1993) FLC 92-335, Clauson (1995) FLC 92-595, Kowaliw and Kowaliw (1981) FLC ¶91-092, Browne v Green (1999) FLC ¶92-873 |
| Applicant: | J M J |
| Respondent: | W P J |
| File No: | HBM2340 of 2000 |
| Delivered on: | 17 May 2002 |
| Delivered at: | Devonport |
| Hearing Date: | 9 May 2002 |
| Judgment of: | Roberts FM |
REPRESENTATION
| Counsel for the Applicant: | Mr. M. Dickinson |
| Solicitors for the Applicant: | Bartletts DX 70239 Burnie TAS |
| Counsel for the Respondent: | Mr. B. Trafford |
| Solicitors for the Respondent: | McGrath & Co. DX 70205 Burnie TAS |
ORDERS
That within sixty days of these Orders the Husband W P J do pay to the Wife J M J the sum of Sixty One Thousand Dollars ($61,000.00).
That contemporaneously with the payment of $61,000.00 hereby ordered the Wife do all such acts and things as may be necessary to transfer to the Husband all her right, title and interest in the former matrimonial home at 190 M R P in Tasmania subject to the Westpac Banking Corporation releasing the Wife from her personal obligations contained in the mortgage secured over the Title to the said property by a partial discharge of mortgage or by the repayment and a full discharge of the mortgage at the Husband’s expense.
That the Wife retain the Nissan Pulsar motor vehicle in her possession.
That the Husband retain the Mitsubishi Pajero motor vehicle in his possession.
That the Husband retain the net proceeds from the sale of AMP shares.
That monies standing to the credit of the parties in any joint bank account become the property of the Husband.
That the Husband do pay to the Wife one half of any payment he receives or to which he becomes entitled after payment of costs and disbursements arising from his legal action against the Estate of P L B, such payment to be made within seven days of the Husband becoming so entitled.
That the Husband notify the Wife or her solicitors within two working days of any settlement or resolution of his legal action against the Estate of P L B.
That the Husband do pay to the Wife one half of any payment he receives or to which he becomes entitled after payment of costs and disbursements arising from his legal action against Ben Lillas, Solicitor and such payment is to be made within seven days of the Husband becoming so entitled.
That the Husband notify the Wife or her solicitors within two working days of any settlement or resolution of his legal action against Ben Lillas, Solicitor.
That there be liberty to either party to apply in relation to the implementation of Orders No. 7, 8, 9 and 10 hereof.
That these Orders be otherwise in full settlement of the parties’ rights and obligations pursuant to Part VIII of the Family Law Act 1975.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT DEVONPORT |
HBM2340 of 2000
| J M J |
Applicant
And
| W P J |
Respondent
REASONS FOR JUDGMENT
Background and applications
The Applicant, J M J (“the Wife”) and the Respondent, W P J (“the Husband”) were married on 17th June 1972 at Penguin in Tasmania. They separated on 28th March 1999.
The Husband is aged fifty one years and the Wife is aged fifty years.
There are two adult children of the marriage and neither is dependent upon the parties.
Shortly after the parties were married, the Husband obtained his certificate as a boilermaker/welder.
In mid 1973 the parties travelled on a working holiday for approximately two years and their eldest child was born in Darwin. They returned to Tasmania in late 1974.
In 1975 the parties purchased their first house in Penguin. The Wife says that it cost $13,000.00 and the Husband says it cost $14,000.00 but nothing really turns upon that.
The parties’ marriage was what is often called “traditional”, in that the Wife assumed the primary role of homemaker and parent and the Husband was primarily responsible for earning the family income.
Throughout the marriage the Husband was mainly employed as a boilermaker/welder. However, the parties were involved in some business ventures from time to time. In the main, however, those business ventures were not particularly successful. They shall be referred to later in these Reasons.
While the parties were still living in their first house, they purchased a double block at Penguin. They subsequently sold their first house and purchased a caravan. They lived in that caravan for some time, both at a caravan park and on the block of land that they had purchased. It is clear that the intention was that they remain living in the caravan while their home was being built. In this regard, it is conceded that the Husband contributed a significant effort to build the home, rather than pay tradesmen to do much of the work.
It is clear that the building of the house took some years and while the Husband seeks credit for his building work, it is equally clear that the Wife seeks credit for the more arduous tasks that she had to perform as a homemaker and parent living in the confined space of the caravan with modest facilities.
The Wife filed an Application on 13th December 2000 and the delay in bringing the matter to a hearing appears in part to be because the parties indicated at one stage that the matter had been settled at a Conciliation Conference. However, that settlement was not to be.
At the hearing of this matter, the Wife filed an Amended Application. Essentially, she seeks a payment of $70,000.00 within thirty days in return for a transfer to the Husband of the property at 190 M R, P in Tasmania (“the former matrimonial home”) subject to the mortgage liability. Further, the parties will retain motor vehicles, monies that they have received and chattels.
The Wife also seeks in her Amended Application fifty per cent of any proceeds of litigation involving the Estate of P L B. During the hearing, however, it also became apparent that the Husband has commenced Supreme Court action against a Tasmanian solicitor for negligence and the Wife’s counsel indicated that the Wife should be entitled to half of any proceeds from that litigation also.
In his submissions, the Wife’s counsel suggested that there should be an adjustment in favour of the Wife of not less than five per cent, but more appropriately ten per cent on the basis of s. 75(2) factors.
In his Response, the Husband seeks the following:
a)A transfer of the former matrimonial home to him in return for a payment to the Wife of fifty per cent of the net value of that property;
b)That the Husband pay to the Wife one third of any funds that he receives from the Estate of P B or $10,000.00, whichever is the lesser amount;
c)That the parties otherwise retain their chattels, bank accounts, superannuation and the like.
In his submissions, counsel for the Husband made much of the Husband’s financial contributions and suggested that on the basis of those contributions the Husband was entitled to seventy five per cent. However, he appeared to concede that there should be some counter balancing adjustment in favour of the Wife and sought a division of fifty five per cent in favour of the Husband.
The Law
The Court’s approach to the determination of an application for the adjustment of property interests has been well established by authority. See Lee Steere and Lee Steere (1985) FLC 91-626, Ferraro (1993) FLC 92-335 and Clauson (1995) FLC 92-595. It is essentially a three step process: firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing; secondly, evaluating the contributions made by the parties as defined in s. 79(4)(a) to (c) and thirdly, evaluating the matters contained in s. 75(2) if they are relevant.
In determining what Order the Court should make under s. 79, the Court must also be satisfied that it is just and equitable in all the circumstances to do so – see s. 79(2) and Russell v Russell (1999) FLC 92-877. In that case the Full Court of the Family Court said, at paragraph 80:
“Furthermore, it must be remembered in this regard that under s 79(2) of the Act, the Court is required to be satisfied that it is the order to be made which is just and equitable, not just the underlying percentage division of the net value of the parties' assets. Indeed we take the opportunity to emphasise that in what his Honour has termed ''the fourth stage'', that is, the consideration of whether the result is just and equitable, it is the justice and equity of the actual orders not of the percentage distribution which must be considered.”
Evidence and findings
In this particular case, the parties have been able to agree upon a list of assets and liabilities. They are as follows:
Former matrimonial home........................................ $150,000.00
Husband’s motor vehicle............................................... $8,000.00
Wife’s motor vehicle..................................................... $8,000.00
Share proceeds............................................................. $14,000.00
Joint bank account.......................................................... $1,000.00
Total: $181,000.00
The parties are also agreed that the mortgage liability that I should take into account in relation to the former matrimonial home is $43,000.00.
This makes the net value of the property $138,000.00 (excluding the potential fruits of the litigation against the Estate and the solicitor referred to above).
The Husband’s superannuation was said by him to be worth in excess of $28,000.00 and there was no serious challenge to that.
The Wife’s superannuation has an approximate value of $12,000.00.
It is unlikely that either party will be able to gain access to any of their superannuation funds for four or five years. However, neither party’s superannuation is very valuable.
The Husband’s claim against the Estate referred to above arises because property claimed to be owned by the Husband in relation to one of his not very successful business ventures was improperly sold after the death of the deceased. In his evidence given following some questions from me, the Husband seemed reasonably confident that the litigation would settle soon. He says that his claim is for $200,000.00 and that he has valuations to support his claims. At this stage, however, it is clearly not possible to quantify the value of that chose in action. Notwithstanding this, it seems to me to be clear that the Wife is entitled to some proportion of any proceeds that are realised by that court action.
It was only in cross-examination that the Husband revealed that he had taken legal action against a solicitor for negligence. He stated that the solicitor admitted his negligence to him and suggested the legal action against himself as one of the options available to the Husband. Once again, it is not possible to quantify that chose in action but if it is successful, the Wife should share in that also.
It is quite clear that both legal actions arose out of the Husband’s business dealings during the marriage.
The Wife appeared to adopt the line that because she was not as enthusiastic as the Husband about some business ventures that were eventually unsuccessful, she should not have to be penalised by the losses incurred.
Baker J said in Kowaliw and Kowaliw (1981) FLC ¶91-092:
“Marriage is for most couples an economic partnership. Married couples live together and work together with the ultimate object of purchasing a home, paying it off, acquiring other assets with the overall object of attaining a higher standard of living. The reported decisions in respect of applications for settlement of property under sec. 79 of the Act are unanimous that both parties should share the economic fruits of a marriage, having regard to the provisions of sec. 79(4) and sec. 75(2), although not necessarily equally.
Is not, however, the converse equally sustainable? In other words, should not financial losses incurred by parties to a marriage or either of them, whether incurred jointly or severally, be shared by them in the same manner as the financial gains? As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.”
That principle has been cited with approval by judges over the years. However, the Full Court of the Family Court said the following in Browne v Green (1999) FLC ¶92-873:
“We agree with her Honour that the principles stated by Baker J in Kowaliw certainly do not constitute any form of fixed code. They are no more than guidelines for use in the exercise of the discretionary jurisdiction conferred by s 79 of the Family Law Act 1975. Nevertheless, they have over the considerable period of time since they were enunciated, become a well accepted guideline in this jurisdiction – a guideline the use of which assists in the achievement of the important goal of consistency within the jurisdiction.”
While the Wife may not have been quite so enthusiastic as the Husband in relation to the business ventures, it is clear, for example, that she played a part in the butcher shop business which was unsuccessful. That part was not as substantial as the Husband’s involvement, but that is only to be expected, given the “traditional” roles that the parties adopted in their marriage.
The parties’ marriage lasted for nearly 27 years. They adopted the “traditional” roles referred to above and I find their contributions to be equal. While the Husband may have been the breadwinner and he may have physically contributed to the building of the former matrimonial home, the Wife was the homemaker and parent and that role would have been made more difficult than usual by residing in a caravan while the home was being built.
The Husband appears to claim an additional contribution after the parties separated by paying the mortgage and by further work on the former matrimonial home.
In relation to the former, it is my view that the Husband has been well compensated for the mortgage payments by being able to live in the former matrimonial home and by receiving some rent when he was not living there.
In relation to any further improvements that the Husband has made to the former matrimonial home, I am unable to say whether they have caused any increase in the value of the former matrimonial home, because no such evidence was put before me. Consequently, there can be no adjustment in relation to that factor.
Taking a global approach to the matter, I find that the parties’ contributions pursuant to Section 79 of the Family Law Act 1975 were equal.
I am required also to consider the provisions of s. 75(2) of the Act. In this regard, the Husband is aged 51 and although he was unemployed at the date of the hearing, it seems to me to be clear that he does not have great difficulty finding employment. At the time that he swore his Financial Statement on 5th March 2002 he was employed in his trade and he was earning $705.00 per week.
On the other hand, the Wife is employed as a part-time cook. Although she was confused about her earnings, I accept that she earns $390.00 per week.
There is some disparity in the parties’ income earning potential. However, the Wife is in a defacto relationship with a man who earns $800.00 per week and she has bought a house with him, which is subject to a mortgage. Her interest in that house is not included in the property listed above.
In view of these factors, I can see no reason to make any adjustment on the basis of s. 75(2).
In her evidence, it was clear that the Wife was willing to share in any proceeds of the litigation being conducted by the Husband, but she was not prepared to contribute if the litigation was unsuccessful and incurred costs.
At first sight, that position appears not to be appropriate. However, because the Husband has a greater interest in superannuation and he is entirely in control of the litigation, it is my view that it is appropriate that the Wife share in the benefits of this litigation but not be responsible for any costs if they exceed any gains.
As stated above, the net value of the parties’ property (excluding fruits of litigation) is $138,000.00. Half of that is $69,000.00. However, the Wife has retained her motor vehicle with a value of $8,000.00, so she should receive $61,000.00 to receive half the value of the property when she transfers her interest in the former matrimonial home to the Husband. Consequently, I will make Orders to that effect.
I will also make orders to provide for her to receive half the net proceeds of the Husband’s litigation against the Estate and the solicitor referred to above in these Reasons.
I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of Roberts FM
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