Jeffrey and Goodrow
[2014] FCCA 496
•27 March 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| JEFFREY & GOODROW | [2014] FCCA 496 |
| Catchwords: FAMILY LAW – Property – de facto relationship – relationship of three years. |
| Legislation: Family Law Act 1975, ss. 90SM, 90SK, 90RD, 90SF, 75(2), 90SL, 79(4), 4AA, Part VIII |
| Calverley & Green (1984) 155 CLR 242 Stanford & Stanford [2012] HCA 52 Hickey & Hickey [2003] FamCA 395 Omacini & Omacini [2005] FamCA 707 AJO & GRO [2005] FamCA 195 Hurst & Weber [2009] FamCAFC 137 Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Cook & Langford (2008) FLC 93-374 Bushby & Bushby (1988) FLC 91-919 Browne & Green [1999] FamCA 1483 Kowaliw & Kowaliw (1981) FLC 91-092 Ferraro & Ferraro (1993) FLC 92-335 Norbis v Norbis [1986] HCA 17 |
| Applicant: | MS JEFFREY |
| Respondent: | MR GOODROW |
| File Number: | CAC 507 of 2013 |
| Judgment of: | Judge Harman |
| Hearing date: | 18 February 2014 |
| Delivered at: | Parramatta |
| Delivered on: | 27 March 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr Ridge |
| Solicitors for the Applicant: | Barker & Barker |
| Counsel for the Respondent: | Self represented |
ORDERS
Pursuant to section 90RD of the Family Law Act1975 it is declared that the parties Ms Jeffrey and Mr Goodrow lived together in a de facto relationship commencing no later than 8 January 2010 and ending no later than 7 January 2013.
That within 42 days of the date of this Order the Respondent do all such acts and sign all such documents as may be required to transfer to the Applicant at the expense of the Applicant all of the Respondent’s interest in Property L and known as Property L in the Australian Capital Territory (hereinafter called “the real property”).
That the Applicant and Respondent sign all documents and do all things required by the Mortgagee, (omitted) Bank, to enable the Applicant to refinance the Mortgage (mortgage registered No. (omitted)) secured on the real property into the sole name of the Applicant, with such refinance to occur simultaneously with the transfer pursuant to Order (2).
That the Respondent do all necessary acts and sign all necessary documents to transfer to the Applicant at the expense of the Applicant all his right, title and interest in the parties’ joint account, namely (omitted) Bank Account.
That unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or any subsequent Orders:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at the date of these (the furniture, personal possessions and like chattels in the real property being deemed to be in the possession of the Applicant).
(b)Money standing to the credit of the parties in any joint bank account is to become the property of the Applicant.
(c)Each party forego any claims they may have to any superannuation benefits belonging to or earned by the other.
(d)Insurance policies remain the sole property of the owner named therein.
(e)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
(f)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
That the Application filed on 15 April 2013 and the Response filed on 20 June 2013 be otherwise dismissed.
That upon expiration of the appeal period and absent any appeal having been filed that all material produced on subpoena shall be returned to the person or agency producing same or if so requested securely destroyed.
IT IS NOTED that publication of this judgment under the pseudonym Jeffrey & Goodrow is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
CAC 507 of 2013
| MS JEFFREY |
Applicant
And
| MR GOODROW |
Respondent
REASONS FOR JUDGMENT
These are proceedings with respect to property adjustment between the Applicant Ms Jeffrey and the Respondent Mr Goodrow.
The parties had resided together in a de facto relationship for a period commencing on either (omitted) 2010 (being alleged by Ms Jeffrey and Mr Goodrow respectively) and separation occurring 7 January 2013.
There are no children of the relationship although each party has adult children from a prior relationship. Arrangements with respect to those children are, by and large, not relevant to the proceedings save and except that:
a)A significant issue arises in the proceedings with respect to a child support debt introduced by Mr Goodrow and discharged by him at or shortly after separation; and
b)Mr Goodrow alleges that for a period of some months that the youngest of Ms Jeffrey’s two children of a prior relationship (together with her partner) had resided with them in a property which they had purchased together in Queensland. Nothing of significance turns upon that issue.
As there is no factual issue between the parties regarding the existence or extent of their relationship a declaration, to found jurisdiction, can and will be made pursuant to section 90RD of the Family Law Act 1975 (Cth) in due course.
Material considered
In the case of the Applicant Ms Jeffrey, I have read and considered each of the documents identified by her Counsel and comprising:
a)Application initiating proceedings filed 15 April 2013;
b)Affidavit of Ms Jeffrey sworn or affirmed 21 January 2014 filed 22 January 2014 (which incorporates two volumes of annexures and comprising in total 249 pages);
c)Statement of Financial Circumstances of Ms Jeffrey sworn or affirmed 24 June 2013 filed the same day;
d)Minute of Orders Proposed by the Applicant filed 11 February 2013;
e)Chronology of events filed 11 February 2014; and
f)List of Assets and Liabilities filed 11 February 2014.
In the case of the Respondent Mr Goodrow, I have read and considered each of the documents identified by him comprising:
a)Response filed 20 June 2013;
b)Affidavit of Mr Goodrow sworn or affirmed 20 June 2013 filed the same day;
c)Statement of Financial Circumstances of Mr Goodrow sworn or affirmed 20 June 2013 filed the same day; and
d)Minute of Orders Sought by the Respondent.
Issues in dispute
As was observed to the parties prior to commencing the trial and as is apparent from a comparison of the orders that they each seek, the parties are in dispute as to a sum or sums totalling $49,551.70.
On the basis of the Minute of Order that each party has filed and served prior to hearing the relief that each seeks bears little or any resemblance to that which has been sought by them in their Initiating Application or Response.
On the basis of the Minute of Order which each party moves upon (and no objection is taken by either as to the variation of relief proposed by the other) it is clear that two significant judiciable controversies arise, namely:
a)Whether the Applicant should make a cash payment to the Respondent in the sum of $23,150. This Order is sought by the Respondent. The parties are otherwise agreed that the Applicant will retain and acquire the interest of the Respondent in a parcel of real estate at Property L in the Australian Capital Territory; and
b)Whether a superannuation splitting order is made with respect to a (omitted) Superannuation Fund in the Respondent’s name and with a base amount of $26,401.70. This Order is sought by the Applicant.
The addition of these two amounts comprises the amount in dispute as noted.
The parties are also in dispute as to what should occur with a joint (omitted) Bank account in the joint names of the parties. However, the balance of that account is some $9.57 and thus nothing of significance turns upon same.
Chronology of events
A Chronology of events was filed by the Applicant’s Counsel which chronology is largely non-controversial. Indeed, there is little significant factual dispute between the parties and I will shortly turn to and address the matters of greater moment which give rise to any controversy.
The Chronology of events provided by the Applicant’s Counsel is, however, relatively comprehensive and, by and large, does not venture into the territory of controversy. Accordingly I accept that chronology which is set out herein:
(omitted) /2010 Parties commence relationship 10/11/2010 De facto Wife pays initial deposit of $1,000 to (omitted) Real Estate for the joint purchase of property at Property R, Qld, (“Property R”). 18/11/2010 De facto Wife provides $50,500 security against her property at Property G, Qld (“Property G”) for the joint purchase of the Property R 07/12/2010 De facto Wife deposits $3,903.05 from her personal account into the (omitted) Trust Account for conveyancing fees for Property R. 07/12/2010 De Facto Wife pays $600 from her personal account to ‘(omitted)’ for the Property R building & timber pest inspection report 07/12/2010 De facto Husband deposits $4,877.49 into the De facto Wife’s personal account 07/12/2010 Settlement occurs for joint purchase by the parties of the Property R (omitted)/ 2010 Parties commence living together 01/05/2011 De facto Husband moves to Canberra to start new employment with (omitted) at (omitted) 17/05/2011 Property R property put on market for sale 30/05/2011 De facto Wife pays out De facto Husband's (omitted) Bank Loan in sum of $24,779.20 30/05/2011 De facto Wife pays $26,650 from her personal account to (omitted) Real Estate as a partial deposit for the joint purchase of Property L (“the Property L”) property 10/06/2011 De facto Wife settles on sale of her Property G property 14/06/2011 De facto Wife transfers $37,353.09 from her personal account to the parties’ joint account. These funds are subsequently used to pay:
· $16,650 – remainder of the Property L deposit (28/06/11)
· $16,815 – Property L (28/06/2011)
13/07/2011 De facto Wife moves to Canberra 15/07/2011 Parties settle on joint purchase of the Property L property 18/08/2011 De facto Wife deposits $51,061.72 from her matured term deposit (formerly held as security for the Property R) property into the parties’ joint account. 22/02/2012 Parties settle on the sale of the Property R. $28,146 transferred into the De Facto Wife’s personal account. 29/03/2012 De facto Wife pays outstanding Stamp Duty on Property R in the sum of $3,055.48 from her personal account to the Queensland Revenue Office. 07/01/2013 Parties separate under the one roof (length of relationship 2 years and 29 days) 02/03/2013 Date from which the De facto Wife pays for all mortgage instalments and other outgoings for the Property L property. 15/04/2013 De facto Wife files Initiating Application seeking final and interim financial orders 19/04/2013 De facto husband moves out of the Property L property. De facto Wife remains living in the property 20/06/2013 De facto Husband files Response seeking interim and final financial orders 24/06/2013 De facto Wife files further updating Financial Statement 24/06/2013 Order made by Judge Brewster for parties to attend conciliation conference 27/06/2013 Parties attend Conciliation Conference 15/07/2013 (omitted) Valuation of the Property L property carried out 17/07/2013 De facto Wife files further Affidavit 23/07/2013 By consent of the De facto Wife, Order made by Judge Brewster for the De facto Wife to pay mortgage instalments and other outgoings for the Property L property. 21/10/2013 Orders made by Judge Baumann 22/01/2014 De facto Wife files Affidavit
Assets and liabilities of the parties
Consistent with the absence of significant factual controversy with respect to most matters of significance there is, similarly, little dispute between the parties as to the present pool of assets, liabilities and superannuation. Accordingly, I again adopt and incorporate the list of assets and liabilities provided by the Applicant’s Counsel and set out herein:
| Ownership | Description | Wife/de facto partner’s value | ||
| 1* | Jt | Property L Property | $430,000.00 | |
| 2 | Jt | (omitted) Account (Joint Account) A/C Holder - Mr Goodrow and Ms Jeffrey (omitted) | $9.57 | |
| 3 | Jt | (omitted) Bank Account ((omitted) Account) A/C Holder – Ms Jeffrey (omitted) | $2.87 | |
| 4 | W | (omitted) Bank Account A/C Holder – Ms Jeffrey (omitted) | $9.86 | |
| 5 | W | (omitted) Bank Account A/C Holder – Ms Jeffrey (omitted) | $1,726.68 | |
| 6 | H | (omitted) Bank Account no. (omitted) (statement as at 07/04/13) | $491.14 | |
| 7 | H | (omitted) Bank Account no. (omitted) A/C Holder: Mr Goodrow (statement as at 12/03/2013) | (-$507.56) Accounted for as a liability below | |
| 8 | W | Mazda | E$500.00 | |
| 9 | H | H household contents | $2,500.00 | |
| 10 | W | W household contents | $2,500.00 | |
| 11 | W | Toyota | E$300.00 | |
| 12 | H | Hyundai | $1,200.00 | |
| 13 | H | Ford Falcon | $5,000.00 | |
| 14 | H | Kayak | $600.00 | |
| 15 | H | Laptop | E$1,000.00 | |
| 16 | W | Laptop | E$250.00 | |
| Total | $446,090.12 | |||
| 17* | Jt | Sale proceeds of (omitted) Shares | $2,929.00 | |
| Total | $2,929.00 | |||
| 18* | Jt | (omitted) Bank mortgage for the Property L property (omitted) A/C Holder – Ms Jeffrey & Mr Goodrow | -$401,086.89 | |
| 19 | W | (omitted) Account No.(omitted) | -$2.63 | |
| 20* | H | (omitted) Mastercard No (omitted) | -$15,163.20 | |
| 21* | H | (omitted) Personal Loan | -$30,282.78 | |
| 22 | H | (omitted) Bank Account No...(omitted) | -$507.56 | |
| 23* | Jt | Telstra Bill | -$1,157 (Alleged by Respondent) | |
| 24* | H | Loan from sister | -$5,000 (Alleged by Respondent) | |
| Total | -$447,043.06 | |||
| Member | Name of Fund | Type of Interest | Wife/de facto partner’s value | |
| 25 | H | (omitted) Super | Accumulation | $23.32 |
| 26* | H | (omitted) Super | Accumulation | $122,953.82 |
| 27 | W | (omitted) Super | Accumulation | $35,935.38 |
| 28 | W | (omitted) Super | Accumulation | $19,087.36 |
| 29 | W | (omitted) Super | Accumulation | $2,180.66 |
| 30 | W | (omitted) Super | Accumulation | $7,488.39 |
| Subtotal of De facto Husband’s current super interest | $122.977.14 | |||
| Subtotal of De facto Wife’s current super interest | $64,691.79 | |||
| Parties combined superannuation interest total | $187,668.93 | |||
| Ownership | Description | Wife/de facto partner’s value | ||
| 31 | H | (omitted) Bank Loan – Paid on behalf of H by W 31/05/11 | $24,799.20 | |
| 32 | H | (omitted) Bank MasterCard – Paid on behalf of H by W 22/01/12 | $211.00 | |
| 33 | H | Loan for H suit | $488.00 | |
| 34 | H | H's Holden motor vehicle registration fees – Paid on behalf of H by W 30/05/12 | $903.50 | |
| Total | $26,401.70 | |||
The areas of controversy between the parties are largely confined to:
a)The asset and liability position of the parties at the commencement of the relationship;
b)The treatment of a number of debts existing at the date of cohabitation and the accumulation, discharge and treatment of debts during the relationship and post separation;
c)Real estate transactions and the receipt and application of funds arising therefrom.
I propose to deal with each of the above three areas of controversy shortly and as a separate consideration of the evidence of the parties. However before doing so I propose to touch briefly upon the parties and their evidence.
The parties’ evidence
Each party was required for cross-examination and was briefly cross-examined.
During her cross-examination I found Ms Jeffrey to be nervous and anxious but otherwise frank, candid and truthful. Ms Jeffrey was prepared to make relevant concessions and admissions against interests including portions of her evidence where she was prepared to concede error.
For example, Ms Jeffrey had alleged that she had transferred a sum of $5,000 to Mr Goodrow and specifically to his credit card account to fund and/or reimburse the purchase by him, utilising that credit card, of a motor vehicle retained by her. The material annexed to her Affidavit and otherwise put to Ms Jeffrey in the witness box demonstrated that the funds that she had transferred had, in fact, been transferred to the parties’ joint account rather than to Mr Goodrow’s credit card account and upon these documents being put to Ms Jeffrey she readily made the concession that the document shown to her was an accurate reflection of the transaction.
I am otherwise satisfied that Ms Jeffrey is a witness of truth and is credible and that I should accept her evidence.
Mr Goodrow’s evidence, I am satisfied, was largely frank and candid. I do not propose to suggest that Mr Goodrow has, in any fashion, misled the Court or given false testimony. However, to the extent that there is dispute and conflict as between the evidence of Mr Goodrow and Ms Jeffrey, I prefer and accept the evidence of Ms Jeffrey.
Mr Goodrow was not as ready and willing as Ms Jeffrey to make frank concessions against his interests when faced with material (particularly independent third party documents) which would suggest that his recollection of events was imprecise.
On a number of occasions, one of which I shall include for illustrative purposes, Mr Goodrow was shown to be, at best, opportunistic and, at worst, disingenuous in allegations raised by him as to payment of particular expenses or contribution thereto. This particularly arose as regards the suggested payment of a sum of $16,815 as stamp duty on purchase of a property at Property L, ACT.
Ms Jeffrey had alleged at paragraph 97.1.3. of her Affidavit that she had attended to payment of this amount by drawing upon funds which had been deposited by her to the joint (omitted) Bank account of the parties (and ultimately derived from the sale of a parcel of real estate owned by her in Queensland at the commencement of the relationship).
Mr Goodrow similarly asserted in his material (paragraph 37) that he had attended to payment of “stamp duty of $16,000 out of my (omitted) payout”.
It was ultimately conceded by Mr Goodrow that the stamp duty payment had, in fact, been made by Ms Jeffrey as alleged by her. However, Mr Goodrow asserted that he had contributed a payment by way of reimbursement to Ms Jeffrey for the stamp duty payment of $15,000 and by three payments of $5,000 each on 19, 20 and 23 December 2011 (see paragraph 32 of his Affidavit).
When challenged with respect to this suggestion Mr Goodrow had responded in words to the effect “it [the $15,000] represents money reimbursed for what she put in. Whether you want to attribute it to stamp duty or something else is up to you”.
With respect to the payments alleged by Mr Goodrow it is also apparent that these were derived from a payment received by Mr Goodrow from (omitted) (a former employer). Those funds, it was conceded by Mr Goodrow, were ultimately the subject of a demand for repayment (paragraphs 75 and 76 of Ms Jeffrey's Affidavit). Mr Goodrow’s evidence with respect to that demand for repayment was to acknowledge that it had been made but to indicate that “it’s all dealt with” whatever that may have meant. The evidence did not establish what the answer meant.
The above differences and distinctions are not vast or significant and certainly not of a scale or quantum to cause me to be concerned that I should not accept the evidence of each of the parties save to the extent that there is no conflict between them.
I otherwise accept the submission of Counsel for the Applicant that the evidence of Ms Jeffrey should be accepted wherever there is conflict between the two and particularly as the evidence of Mr Goodrow had greater potential for hyperbole and self-serving justification (whether to minimise the contributions of Ms Jeffrey or to magnify or exaggerate those of Mr Goodrow).
It is with this finding as to credit that I now turn to the specific areas of controversy between the parties. That is not to suggest that these are the only areas of controversy. However, they are the areas of greatest significance.
Debt at cohabitation
The parties are relatively agreed as to that which they introduced to the relationship.
Ms Jeffrey asserts, for her part, that she introduced to the relationship:
Description Value A property at Property G, Queensland valued at $270,000 and encumbered by a mortgage of $97, 650 (leaving equity of $172, 350) $172, 350 A (omitted) bank account with a balance of - $12,075.44 Further (omitted) accounts with balances of
$1,530.41, $76.33 and $0 and thus totalling -$1,606.74 An (omitted) Bank account - $3.82 A Toyota - $5,000 A laptop at - $1,500 Household furniture for - $15,000 TOTAL $207,536
In addition, Ms Jeffrey asserts at the commencement of cohabitation she had superannuation entitlements comprising:
Description Value (omitted) Super- $32,628.18 (omitted) Super- $4,188.31 (omitted) Super- $5,823.70 (omitted) Super - $1,880 TOTAL $44,520.19
I make clear that the motor vehicle and items of personality and chattels which are ascribed a value are accepted for illustrative purposes only and no finding of fact is made by me to suggest that the figures alleged by Ms Jeffrey (or for that matter and in due course Mr Goodrow) are accurate or can have weight attached thereto.
None of the above matters were put significantly into controversy by Mr Goodrow save the balance held by Ms Jeffrey in her primary (larger) (omitted) Bank account.
Mr Goodrow asserted, partially based upon the earlier date of cohabitation suggested by him, that the balance in fact held by Ms Jeffrey at the commencement of cohabitation was $7,764.00. However on the basis of that assertion (which arose from consideration by Mr Goodrow of a bank statement presented to him during cross-examination) I can safely accept that the cash funds held by Ms Jeffrey were not less than that amount.
The balance of assets introduced by Ms Jeffrey were not the subject of controversy. Significantly there was also no suggestion by Ms Jeffrey nor any suggestion raised by Mr Goodrow that, save for the mortgage encumbering the (omitted) unit, that Ms Jeffrey was liable for any debt in any form at the commencement of cohabitation.
At the commencement of cohabitation it is asserted by Ms Jeffrey (paragraph 22 of her affidavit) that Mr Goodrow held the following assets, liabilities and superannuation interests:
Assets
·Household items and contents - $3,000
·Bank accounts - unknown
·Toyota 4 wheel drive Land Cruiser - $15,000
·Boat - unknown
·Kayak - unknown
·Motorbike - $3,000
·Laptop - $1,000
·(bank omitted) everyday visa debit account - $202.49
Liabilities
·Child support debt estimated - $30,000
·(omitted) loan estimated - $20,393.05
·(omitted) Bank variable loan account estimated - $28,633.91
·(omitted) Bank low rate Mastercard - $1,613.68
·Toyota 4 wheel drive Land Cruiser loan - $10,000
·Motorbike loan - $3,000
·Boat loan - $12,000
Superannuation
·(omitted) Super - $74,626.26
Some controversy arose particularly with respect to the suggested debt position of Mr Goodrow at cohabitation (December 2010).
Ms Jeffrey was cross-examined as to her source of knowledge of the Land Cruiser loan, motorbike loan and boat loan.
Ms Jeffrey made clear that her knowledge was largely based upon either representations made to her by Mr Goodrow and/or documents that she has viewed during the relationship but which she no longer held.
A number of documents were shown to Ms Jeffrey during cross-examination and appropriate concessions made by her as to the authenticity of each document and its contents. These ultimately became Exhibits R1 and 2 as regards the Land Cruiser and boat loans respectively. Those documents each demonstrate that the assets had been encumbered by loans but the liabilities had been discharged prior to cohabitation.
Ms Jeffrey was not cross-examined regarding the balance of debts alleged by her to be extant and for which Mr Goodrow was liable at the commencement of cohabitation.
Mr Goodrow’s evidence with respect to his asset and liability position at cohabitation is set out in paragraph 10 of his Affidavit. Therein, Mr Goodrow largely adopts the values alleged by Ms Jeffrey as to the assets held by him (although asserting a higher value for furniture and his motorbike and suggesting a value of $5,000 for the boat).
By his evidence Mr Goodrow conceded debts as follows:
a)A child support “principle debt” of approximately $15,000;
b)(omitted) loan debt of approximately $21,000;
c)(omitted) loan of approximately $27,000;
d)(omitted) low rate Mastercard debt $870.83.
There is no significant difference between the debt amounts alleged by Mr Goodrow and those alleged by Ms Jeffrey save with respect to the child support debt.
Mr Goodrow was not cross-examined as to what was meant by him in his allegation of a “child support principle debt” of approximately $15,000.
It is clear that any child support liability held by Mr Goodrow would have been subject to administrative penalties and the like which may have inflated the debt owed by him beyond actual child support as calculated. It is unclear whether this distinction is drawn by Mr Goodrow in his evidence. As it was not explored with him (although during his cross-examination of Ms Jeffrey it had been specifically raised by him whilst he had not challenged Ms Jeffrey with respect to the balance of her allegations with respect to debt). Accordingly I do not propose to treat the child support debt beyond that conceded by Mr Goodrow.
On the basis of the above evidence and those portions of it which are controversial, it is clear that Mr Goodrow had significant debts at cohabitation comprising of not less than:
a)A debt to the Child Support Agency - $14,000
b)A (omitted) loan - $20,393.05
c)(omitted) Bank variable loan - $28,633.91;
d)(omitted) Bank low rate Mastercard - $1,613.68.
e)He has borrowed not less than - $65,186.64.
In light of the above it is clear that the net asset position of Mr Goodrow at the commencement of cohabitation was no better than approximately minus $40,000.
Real estate and real estate transactions
As indicated above there is no controversy that at the commencement of the relationship Ms Jeffrey owned a property in Property G, with net equity of $172,350.
At the commencement of cohabitation the parties jointly purchased a property at Property R, Queensland.
The parties are not in dispute as to the acquisition of that property for $318,000 together with stamp duty, agent’s fees and conveyancing costs.
The evidence of Ms Jeffrey with respect to the purchase and, in particular, the provision of funds relating thereto is set out commencing at paragraph 33 of her Affidavit.
What is clear is that a mortgage with the (omitted) Bank was obtained by the parties to fund the majority of the purchase price and additional funds provided through:
a)The sum of $50,500 being provided as security as against Ms Jeffrey’s property in Property G;
b)Payment of $3,055.48 by Ms Jeffrey for stamp duty drawn from her pre-cohabitation savings;
c)Payment of the initial $1,000 “holding deposit” by Ms Jeffrey from her pre-cohabitation savings;
d)Payment of $3,903.05 in conveyancing fees met by Ms Jeffrey from her pre-cohabitation savings.
A number of further costs were met by Ms Jeffrey including payment to an inspection company (for a building and timber pest inspection report), carpet and other items.
There is no dispute (indeed the evidence is offered by Ms Jeffrey rather than Mr Goodrow) that the sum of $4,877.49 was provided by Mr Goodrow. Those funds were deposited by Mr Goodrow to Ms Jeffrey’s bank account on 7 December 2010 (the date of cohabitation suggested by Mr Goodrow) and thus accounts for the difference between the balance for Ms Jeffrey’s bank account at cohabitation suggested by her versus that suggested by Mr Goodrow.
After the purchase of the Property R property a number of renovations were undertaken. There is some dispute between the parties as to who paid for and undertook the work. I accept that each party had involvement in the renovations and improvements and, further, I accept the evidence of Ms Jeffrey that her daughter and her partner also assisted to some extent.
The Property R property was the home occupied by the parties until they relocated to the Australian Capital Territory during 2011.
Thereafter the evidence of the parties is somewhat unclear as to what occurred with respect to the Property R property. However it was ultimately sold and on 22 February 2012, the sum of $28,146.63 was received (representing the net proceeds of sale) and that amount was deposited to a bank account in the sole name of Ms Jeffrey.
Mr Goodrow asserts that he had been advised by Ms Jeffrey that no net profit had been received and he was unaware of the receipt or retention of funds by Ms Jeffrey until having been served with Affidavit material from her. Whether that is so or not I accept the evidence of Ms Jeffrey (corroborated by material annexed to her Affidavit) that this amount was the totality of funds received and received and retained by her.
As indicated the parties relocated to Canberra during 2011. Shortly thereafter and in June/July 2011 the parties purchased their present property at Property L. The property was purchased for $433,000 and, again, there is little factual dispute between the parties as to the source of funds with respect to the purchase which comprised a mortgage for the majority of the purchase price and thereafter:
a)The sum of $26,650 contributed by Ms Jeffrey from an account maintained in her name;
b)A further sum of $16,650 (the balance of the deposit) from the same source;
c)$16,815 from the same source and in payment of stamp duty;
d)$3,027.96 from the same source.
Further costs were met with respect to conveyancing costs, removalists and the like and there is little controversy as to either the amounts incurred or their payment.
Contemporaneous with the purchase of the ACT property, however, and as it would appear as a condition of mortgage finance, Ms Jeffrey discharged the then (omitted) Bank variable loan account in the name of Mr Goodrow and by paying to (omitted) Bank a sum of $24,779.20. That payment was made on or about 31 May 2011. This had been conceded by Mr Goodrow in his Affidavit material (paragraph 38). During his cross-examination Mr Goodrow was somewhat glib in asserting that the payment had not been made by Ms Jeffrey for his benefit or at his request but as a condition and requirement of the mortgagor. Such glib concession on those terms did not assist Mr Goodrow’s credit.
The parties continue to hold title of the property in their joint names and Ms Jeffrey has resided in the property since separation.
During cross-examination Ms Jeffrey conceded in her evidence (paragraph 15 of her Affidavit) that she had, since March 2013 made all payments with respect to the mortgage was not entirely accurate in that:
a)From March until June/July 2013 the mortgage payments were met from a re-draw attached to the mortgage; and
b)Only thereafter had she commenced payments with respect to the mortgage.
I am not satisfied anything of great significance turns upon the above. Further, I am not satisfied that the submission of Mr Goodrow that the use of re-draw to fund the payment of the mortgage for a period of 3-4 months had increased the mortgage substantially and by an amount of approximately $20,000.
The home has a present value of $430,000. This value was ultimately conceded by Mr Goodrow during cross-examination. A valuation of the property had been undertaken (see annexure WW (pages 237-249 of the de facto wife’s Affidavit)) albeit in July 2013. This represents the best evidence available as to the value of the property.
Two market appraisals have recently been completed at the instigation of Ms Jeffrey and these were tendered (Exhibit A1). I made clear to the parties in the opening of the case that I did not propose to rely upon such appraisals as evidence of value same falling short of the standard required as to expert opinion (see for example section 79 of the Evidence Act 1995).
I am prepared to accept the value of the ACT property at $430,000 in accordance with the valuation and noting:
a)The market appraisals, whilst not relied upon or accepted as proof of value, are not objected to and have some slight corroborative value as to the absence of change in valuation since the valuation undertaken;
b)The concession is made by Mr Goodrow that the valuation is, in all probability, accurate;
c)Mr Goodrow did not seek to contest the accuracy of the valuation save within the context of cross-examination regarding renovations to the home. Significant contention arises as to whether renovations undertaken by Mr Goodrow to the ACT property were of tradesman like quality and thus whether they have impacted upon the value of the home (positively or negatively). I hasten to add that there is no evidence led by either party that would allow findings in accordance with their respective allegations (either increase or diminution in value) to be made. However, during the course of cross-examination with respect to the issues Mr Goodrow first sought to assert that property values had fallen and that the value of the property only being maintained at $430,000 is as a consequence of the work that he had undertaken and when challenged with respect to this proposition (it being put to him that perhaps but for the work he had undertaken the value may have been higher) he asserted “well the valuation is from July 2013 and out of date”. In any event Mr Goodrow had conceded, only some questions earlier, the value for the property of $430,000.
d)The sworn valuation (whilst not annexed to an affidavit by its author although not objected to on that basis although noting that Mr Goodrow is self-represented) is the “best evidence” available as regards to the value of the property.
The ACT property is the only parcel of real estate presently existing (irrespective of registered proprietorship).
The Property G property which had been owned by Ms Jeffrey at the commencement of the relationship was sold in May 2011. The details of the sale and receipt of the proceeds thereof are set out at paragraph 94 of Ms Jeffrey’s evidence. Ultimately Ms Jeffrey received sums totalling $153,853 from this sale.
It is not asserted by Mr Goodrow that the parties had resided in the Property G property as a couple or that he had made any contribution to that property save an allegation by him (as to which there is some controversy not as to the undertaking of work but by whom it was performed) as to painting of that property prior to sale. I am not satisfied that anything of substance turns upon that controversy and thus I need not determine it.
The real estate transactions of the parties make clear in my mind and I so find that:
a)The only direct contribution (financial or otherwise) to the Property G property was made by Ms Jeffrey. In essence that property was introduced by Ms Jeffrey to the short relationship of the parties and was never occupied or treated by the parties as joint property;
b)The financial contribution of the parties to the Property R property was overwhelmingly made by Ms Jeffrey. Indeed no financial contribution towards the acquisition of that property is alleged by Mr Goodrow other than through the contribution of a portion of stamp duty with respect to the purchase;
c)The purchase of the Property R property was made possible (in the nature of a Calverley & Green (1984) 155 CLR 242 contribution) through the offering by Ms Jeffrey of her Property G property as security and thus providing all non-mortgage funds applied towards the purchase and associated costs;
d)The overwhelming if not sole direct financial contribution of the acquisition of the ACT property was made by Ms Jeffrey.
Accumulation and treatment of debts during the relationship
A significant issue that arose in the proceedings and which was addressed by each of the parties in submissions relates to the debt which remains extant at the separation of the parties (and at present) and how such debt was incurred.
There is no significant dispute that the debt which existed at separation comprised:
a)The mortgage over the ACT property;
b)A (omitted) personal loan in the name of Mr Goodrow for $30,282.78;
c)An (omitted) Bank low rate Mastercard account in Mr Goodrow’s sole name of $15,163.20.
Absent the mortgage it is clear from the above that at separation debts totalling approximately $45,000 were in existence which debts were in the sole name of Mr Goodrow.
A number of transactions have occurred which have affected the debts in existence both at cohabitation and those at separation.
Mr Goodrow asserts that two specific transactions should be treated as a joint liability and thus the bases (or one basis) for a cash payment by Ms Jeffrey to him. These comprise:
a)A sum of $7,500 drawn down in December 2012 against the (omitted) debt already extant in Mr Goodrow’s name. The draw-down of those funds involved an increase in the total indebtedness of Mr Goodrow, (with fees, charges and interest), with respect to that account of $11,823.17 (see paragraph 53 of the respondent’s Affidavit);
b)The second amount which Mr Goodrow asserts the parties should have some joint liability with respect to comprises an increase in Mr Goodrow’s credit card debt. Mr Goodrow asserts that the credit card debt incurred during the relationship (some $15,000) should be treated as a joint responsibility and liability having been incurred, as it was, during the relationship.
Mr Goodrow’s evidence with respect to the (omitted) debt is that the sum was borrowed so that the parties would be “comfortable over Christmas”. It was put to Ms Jeffrey during cross-examination that she had taken a portion of that fund being approximately $1,500 and provided this to one of her daughters. This was conceded by Ms Jeffrey. No particularisation as to the balance of expenditure or the need, in the context of Mr Goodrow’s evidence that he was, at this time, earning a substantial wage in excess of $100,000 per annum, was led.
No particularisation of expenditure with respect to the (omitted) Bank credit card is before the Court. Ms Jeffrey denies all liability with respect to the account.
It is not possible, on the evidence as is stands, to assess what expenditure has occurred or, to the extent that it would be a necessary, appropriate or valid exercise, to seek to apportion liability for the debt.
What is otherwise clear is that two significant debts were introduced to the relationship by Mr Goodrow and which debts had been discharged by separation.
The (omitted) Bank debt (addressed above) in excess of $27,000 at cohabitation was discharged from funds arising from the sale of the Property G property which had been owned by Ms Jeffrey at cohabitation.
Mr Goodrow’s child support debt had also been extinguished. Material annexed to Ms Jeffrey's Affidavit (Exhibit Z pages, 162-163) evidences that approximate to separation (i.e. 15 February 2013 or 16 February 2013) the balance outstanding with respect to that liability (conceded by Mr Goodrow to have been “a child support principal debt of approximately $14,000” had been reduced to $1,041.82).
What is also significant with respect to the debt (both at cohabitation and at February 2013) is that:
a)A lump sum payment was clearly made in January 2013 of $14,728.94. That payment is not addressed in any fashion in the evidence of Mr Goodrow. Mr Goodrow asserts that in February 2013 he paid a sum of $9,000 to the Child Support Agency to “clear my debt with them”. That evidence is clearly at odds with that demonstrated by the Child Support Agency’s document which, by reference to section 69 of the Evidence Act 1995 and section 116 of the Child Support (Registration and Collection) Act 1988 I accept and prefer over the evidence of the de facto husband. It is a clear, precise, record produced by the Agency as a keeper of records and is unchallenged as to its accuracy.
b)The de facto husband’s evidence (paragraph 10) is that repayments were being made by him of $100 per week towards the debt asserted by him (approximately $14,000 as at December 2000). On that basis payments of $5,200 per annum (with no disclosed ongoing liability) were occurring and thus such payments, when taken into account with the balance obviously extant as at January 2013, would suggest that the de facto wife’s estimate of the total liability as at December 2012 (approximately $30,000) was more likely accurate.
I am particularly concerned that the de facto husband’s evidence of a payment of $9,000 does not suggest any source of funds from which such payment was made nor any discussion or disclosure with respect to same. It is not, for instance, suggested by the de facto husband that his credit card liability had increased or that he had obtained funds from any other source. All and any evidence with respect to the issue is absent.
In any event and in doing the best one can with the evidence that is available it is clear that the de facto husband, during the relationship, has been able to discharge and to thus be relieved from liability for debts of not less than $41,000.
To offset the above Mr Goodrow protests, in submissions, that Ms Jeffrey has received and retained:
a)The net proceeds of sale of the Property R property (which he had been led to believe were non-existent);
b)The benefit of re-draw facilities of the mortgage being used to service the mortgage for a period of some months (with a corresponding increase in the overall liability and thus reduction of the net asset pool). Those funds in the joint names of the parties were applied to a debt in the joint names of the parties whilst the Applicant had the benefit of use and occupation of the property;
c)Retention of the funds held in the joint account at separation of approximately $12,400.
Superannuation
Whilst I had not identified it as a significant area of controversy (as factually it is not controversial), issue also arises as to the variation and increase in the parties respective superannuation entitlements during the relationship.
Superannuation interests of each party at cohabitation are, I am satisfied, set out in the de facto wife’s material (paragraphs 21 and 22).
At the date of hearing the de facto wife’s superannuation entitlements, in accordance with the above schedule, have a total value of $69,691.79. It was submitted by Counsel for Ms Jeffrey that this represents an increase in her superannuation entitlements (including employer contributions during the relationship) of approximately $20,000.
The superannuation entitlements of Mr Goodrow presently (noting that “presently” relates to the most recently available up to date statement having been produced by Mr Goodrow for hearing) amount to $120,953.82 representing an increase of approximately $48,000 over the period of cohabitation to date.
The suggestion is raised that Mr Goodrow has made additional contributions over and beyond his employer contributions during this period and which might have contributed to the somewhat more rapid increase in his entitlements than those of Ms Jeffrey.
I make clear that there is no evidence before the Court to suggest that Mr Goodrow’s evidence (that he has made no additional contribution and the growth has occurred as a consequence of employer contributions and fund performance only) to support such a contention.
The total growth of Mr Goodrow’s superannuation as between that which he held at the commencement of the relationship and the present is approximately 39% ($48,327 (the net growth) divided by $122,953 (present value) equals 39%).
When the same calculation is performed as regards Ms Jeffrey’s superannuation entitlements the percentage growth is in the vicinity of 31% ($20,171 (net growth) divided by $64,691 (present value) equals 31%.
Whilst the above is not relied upon as an accurate calculation or explanation of growth, it is curious that the growth rates between the two funds are not dissimilar and noting, further, that leaving aside variations in fund growth and management, the employer contributions (assuming an equal percentage of employer contribution) would have been greater in the case of Mr Goodrow as he was, and as to which there is no controversy, earning a greater income for most but not all of the relationship.
On the above basis I do not accept that there has been any additional contribution by Mr Goodrow to his superannuation funds over and beyond employer contribution (as a condition of employment) nor that there has been any significant disparity or injustice as regards accumulation and growth of superannuation interests that favour Mr Goodrow.
Mr Goodrow has asserted, with some force (although not necessarily accuracy) that his income and thus contribution to the household during the relationship has been “significantly greater” than that of Ms Jeffrey.
Clearly from the period from mid-2011 and until separation (January 2013) when the parties were resident together in Canberra the income earned by Mr Goodrow (approximately $100,000 per annum) was in the order of double or slightly more than double the income earned by Ms Jeffrey. However, it is to be noted in that regard that:
a)Prior to relocating from Queensland Ms Jeffrey was earning a similar if not equal (or perhaps slightly greater) income than Mr Goodrow;
b)The diminution in Ms Jeffrey’s income arose primarily as a consequence of the relocation to Canberra. Mr Goodrow was, again, somewhat disingenuous in his refusal to concede that this move, by and of itself, had impacted upon the income earned by Ms Jeffrey indicating that, in his view, Ms Jeffrey had voluntarily moved to Canberra and it was entirely her choice. This ignores the fact that the parties were clearly in a relationship, committed to each other and relocated to Canberra to allow Mr Goodrow to pursue job opportunities that he desired.
The position advanced by Mr Goodrow (as to his income being “significantly greater” than that of Ms Jeffrey’s) is somewhat simplistic and does not take into account two significant factors namely:
a)The production of income does not of itself equate to contribution. There is no evidence which suggests any benefit or mutual benefit to the parties of the income earned by Mr Goodrow. Indeed during the period that such a significant income has been earned significant debt has also been incurred and with no explanation as to how or why this was so;
b)Ms Jeffrey continued to make a significant financial contribution both through the production of her income and through the use of her capital (both through direct application and by way of a Calverley & Green contribution).
In addition to the above the argument, when considered in the broader context of contributions, to which I shall turn shortly, is abundantly simplistic and, to the extent that it is submitted as a basis for favouring the relief proposed by Mr Goodrow, I reject that submission.
Legislative pathway
As these proceedings are dealt with under Part VIIIAB of the legislation it is a pre-condition in the legislation that I must be satisfied that a de facto relationship existed between the parties and by reference to the matters set out in section 90SM of the Act.
Clearly there is no factual dispute between the parties as to the existence of de facto relationship for a period in excess of two years and which has, whilst not wholly, substantially occurred within the ACT.
The assets of the parties (leaving aside superannuation assets) are now substantially within this jurisdiction.
The parties agree that separation occurred in early January 2013 and thus well within the limitation period for the commencement of proceedings.
I am satisfied that all necessary pre-conditions of section 90SK and 90SM of the Act are satisfied and thus the Court is seized of jurisdiction. A declaration pursuant to section 90RD will be made, with the consent of the parties, at the commencement of the Orders pronounced.
In then dealing with the application for the adjustment of interest in property pursuant to section 90SM of the Act, I must be satisfied that it is just and equitable to exercise jurisdiction and to make Orders for property adjustment (to which I shall return) and, in making any such order, address both the parties contributions (section 90SM(4)) as well as the matters set out in section 90SF of the Act.
I will shortly deal with those matters separately and by reference to the relevant provisions of the legislation.
As regards justice and equity I note that some controversy has arisen since the High Court’s decision in Stanford & Stanford [2012] HCA 52. As a consequence of that decision I am satisfied that I must follow a three-step approach (rather than the four-step approach previously suggested and favoured by the Full Court) and being:
a)As assessment and determination as to the pool of property (incorporating assets, liabilities and financial resources) available to divide between the parties. Within that exercise it is open to the Court to deal with superannuation and non-superannuation assets separately or together (see for example Hickey & Hickey [2003] FamCA 395, Omacini & Omacini [2005] FamCA 707 and AJO & GRO [2005] FamCA 195);
b)I must as the second step, assess the parties’ contributions;
c)I must as the third stage assess the matters set out in section 90SF (being section 75(2) for the purpose of Stanford but accepting that the rationale of the High Court applies mutatis mutandis to proceedings under Part VIIIAB of the Act).
Notwithstanding my comment above, as to being satisfied that it is just and equitable to make any order as to property adjustment, I do not accept that it was the Full Court’s intention to prescribe a separate threshold step, separate and distinct from a consideration of the parties’ contributions and adjustment pursuant to section 90SF of the Act, that it is just and equitable to exercise discretion at all. It is certainly a relevant consideration, from the outset of the determination and in each step taken in the determination, to be satisfied that the exercise of discretion (and how that discretion is exercised) is just and equitable as between the parties and any other relevant stakeholders (including the community). However, it would not be possible to determine that the present ownership of property reflects that which should occur without considering the contributions and future needs of the parties.
I am satisfied that to the extent that a preliminary threshold step exists it is based upon whether the exercise of any jurisdiction is appropriate by reference to matters such as “have the parties separated and determined to end their relationship?”. In this case clearly the assumption and exercise of jurisdiction is appropriate. The parties have separated and the termination of their financial relationship is compelled by the Act and can only occur through the exercise of jurisdiction. Further, each argues that they have made contributions, leading to the suggested creation of equitable interests in property at odds with their present legal ownership.
Lest I am wrong in the above interpretation I am satisfied that as the parties clearly own a parcel of real estate in their joint names and to fail to make any Order with respect to adjustment of interests therein would, I am satisfied, clearly reflect and represent injustice as between the parties, justice and equity is served by the Court assuming jurisdiction and exercising discretion.
Pool of property
The pool of property, I am satisfied, is as set out above in the schedule of assets and liabilities.
No submissions were put by the Applicant or Respondent as to whether the matter should proceed on the basis of all assets and liabilities being considered as one consolidated pool or whether there should be a separate treatment of superannuation and non-superannuation assets. I propose to canvas both approaches although I am satisfied that no difference in outcome arises.
Contributions
It is trite to observe that section 90SM of the Act (and indeed section 79(4)), envisage a myriad of different contributions that might be made by parties. So much is apparent from the terms of the legislation as enacted by Parliament.
It is possible for parties to contribute financially whether directly or indirectly. Financial contributions can be positive or negative (i.e. they can result in the acquisition, maintenance and improvement of property or can result in the destruction of or diminution in value or state of repair of property).
The parties can contribute other than financially such as making contributions by or on behalf of the other party, towards the relationship or towards a child of the relationship (it being noted that there are none).
Contributions can be made by parties towards the family unit that is thus constructed through the union of two persons.
The above broad contributions must all be assessed in this case.
It has also trite to observe, from the outset that the relationship between these parties has subsisted for barely three years. In those circumstances I am conscious, consistent with Full Court authorities such as Hurst & Weber [2009] FamCAFC 137, Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143, Cook & Langford (2008) FLC 93-374 and Bushby & Bushby (1988) FLC 91-919, that assessment of contributions might be assessed as a percentage of a pool of property or more generically.
It is to be noted that a most imminent Full Court comprising Warnick, Boland and O’Ryan JJ in Hurst & Weber had favourably referred to and accepted that (paragraph 7):
“… the expression of the assessment of contributions as a percentage of net property is preferred, but is not a prescription. Expression of a percentage, where there is to be a division, is highly desirable, to convert qualitative factors into quantified entitlement. It is much less necessary where there is a decision to make no adjustment”.
Their Honours also accepted and commented favourably upon dicta of the Full Court in Cook & Langford and Bushby & Bushby as follows:
“… what [the Court is] required to do… [is] to assess and make findings about the nature of the husband’s contributions compared and contrasted with those of the wife, and only in the light of that assessment to adjust the parties’ respective assets if necessary to achieve justice and equity between them. It was open to her Honour if she found no or minimal contributions by the husband to make no adjustment to the parties’ respective assets.
… In the circumstances of this case, it was well open to find it was inappropriate and/or artificial to attempt to evaluate the actual contributions of the husband as a percentage of the large pool of assets which were sourced exclusively from the wife’s sole pre-marriage assets, maintained and improved significantly by her during the marriage, and substantially increased post separation as a result of the sale, engineered by the wife, of AB to another corporate enterprise.”
Their Honours expressly affirmed the application of such reasoning to a case such as that the subject of the appeal (involving a short marriage) in stating at paragraph 9:
“Although the value of assets in question varies greatly between that case and this, the Full Court’s remarks are not inappropriate where, as there, the difference between the husband’s assets and those of the wife is huge and the period of cohabitation is short”.
I do not refer to the above passage to suggest that the assets of the parties in this case are “huge”, indeed they are nothing of the sort. I am satisfied on that basis that, indeed, the comments made by their Honours above have even greater application to these circumstances where the pool of property is, on any in view, “tiny” rather than “huge”.
I would not propose to seek to assess the contributions made by the parties to the pool of property which presently exists as a percentage. However I will undertake that task lest I am wrong in my interpretation of their Honours rationale as above.
Clearly on the basis of the pool of assets and liabilities presently in existence (and discounting for present purposes the values asserted by each party with respect to motor vehicles, chattels) the pool of property essentially comprises:
a)Equity in the Property L home ($28,914);
b)The parties’ respective superannuation entitlements (being in the case of the de facto husband $122,953 and in the case of the de facto wife $64,691).
If the pool of property is taken as a total pool (and noting that I have not, at this time, taken account of the debts which remain in the de facto husband’s name) then clearly that which is available for division approximates $216,558 [1]. No allowance has been made for either the add back of proceeds of sale of shares (which there is no dispute and those shares having been purchased in the relationship).
[1] Noting that no provision has been made for motor vehicles and other chattels (being items 8-16 in the above schedule).
If one is to then take account of the present liabilities in the de facto husband’s name (totally $45,445) then the net pool (if all assets (both super and non-super) and liabilities are taken into account) approximates $171,113.
Based on where the above assets and liabilities presently lie and noting that the parties are in agreement that the property in Property L, ACT will be retained by the Applicant (and the mortgage encumbering same re-financed into her sole name) this would see:
a)Ms Jeffrey retaining equity in the home $28,914 and superannuation entitlements $64,691 or $93,805;
b)Mr Goodrow would retain his superannuation entitlements with a value of $122,953 and also remain liable for the debts in his name ($45,445) thus leaving him in a net position of $77,508.
It is submitted with some force in the case of Ms Jeffrey that her financial position has diminished during and as a consequence of the relationship. In short it is submitted that whilst the superannuation fund/funds of the parties have grown modestly that the overall assets available to her have reduced significantly in value.
Ms Jeffrey asserts that in addition to retaining the parcel of real estate presently held in the joint names that a superannuation splitting Order should be made in her favour and so as to transfer to her a portion of Mr Goodrow’s superannuation interests with a base amount value of $26,401.70. That amount is calculated by reference to suggested “loans” made by Ms Jeffrey to Mr Goodrow during the relationship the most substantial of which is the discharge by Ms Jeffrey of the (omitted) Bank loan account in Mr Goodrow’s name $24,799.20.
It is to be noted that the concept of a “loan” is somewhat foreign to a consideration of the factors that would be taken into account in assessing and determining whether the parties had, in fact, lived in a de facto relationship. In this regard and by reference to section 4AA of the Act, I must consider, in determining whether I am satisfied that the parties have lived together in a “de facto relationship” not only the duration of the relationship but the nature and extent of the common residence and matters such as their degree of financial dependence and independence.
Mr Goodrow asserts that a number of transactions occurred during the relationship and for which he did not keep strict records of accounting nor consider same necessary as “we were in a relationship”. There is some force to that position.
There can be no doubt that Ms Jeffrey leaves the relationship in a financially inferior position to that which she joined it. Mr Goodrow asserts, on his part, that he has also left the relationship in a financially inferior position. It is difficult to see how this is so. The overall debt position which Mr Goodrow now faces is less onerous (at least as regards quantum) than he entered the relationship, albeit that his asset position has very slightly reduced.
In assessing this position however I am conscious of the comments of the Full Court in Browne & Green [1999] FamCA 1483 and comprising an eminent bench of jurists Lindemeyer, Finn and Holden JJ. It was recognised by their Honours (paragraph 39) that:
“contributions by a party do not necessarily have to produce a positive result for that party’s contributions which fall within [paragraphs 79(4)(a) and (b)] to be taken into account”.
Their Honours then undertook a discussion with respect to a significant number of cases dealing with and applying the “Kowaliw Principle” which is not argued to be referrable in these proceedings. Whilst specifically discussing Kowaliw & Kowaliw (1981) FLC 91-092 their Honours accepted that it would be “manifestly unjust” to “… place … the full burden…[of] losses…” upon one party.
I accept that the decision turns upon its own facts, however, the general discussion throughout their Honours’ decision of principles relating to such loss are such as to satisfy me that it would be inappropriate for me to engage in any exercise of seeking to apportion loss between the parties and that to do so would be arbitrary and unjust as well as contrary to the nature of a marriage or marriage like or de facto relationship.
By reference to all of the above authorities and the facts and circumstances of this case I am satisfied that it would be just and equitable to assess the contributions of the parties, to the assets which presently exist, on a basis which would see the assets and liabilities fall where they fall.
For the sake of clarity this is not to suggest an asset by asset approach is adopted by me (although neither party made submissions as to whether an asset by asset or global approach should be preferred and thus I prefer, as authorities such as Ferraro & Ferraro (1993) FLC 92-335 and Norbis v Norbis [1986] HCA 17 suggest, that a global approach should be preferred).
To assess the parties’ contributions (without engaging upon mathematical description of same) so as to see the assets and liabilities fall where they fall would place each party in a position whereby, I am satisfied:
a)Their contributions (prior to, during and post relationship) are acknowledged and reflected;
b)Their net asset position both at cohabitation (prior to a relationship of 3 years) and at present is similar and comparable although not identical;
c)Sees each party receiving the benefit for that which they have contributed and “the loss” occasioned through the decisions made by the parties jointly during the relationship and at a time when their decision making was joint, equal and based upon mutual love and affection for each other and commitment to joint life, being reflected in their present asset position.
I am also conscious (whilst it is not canvassed in the evidence above) that a further contribution had been made by Mr Goodrow during the relationship comprising the introduction by him of funds of $31,278 (over and beyond the contentious funds subsequently received from (omitted)) and arising from his resignation from (omitted). Evidence with respect to the receipt of these funds and their application as set out in paragraph 32 of Mr Goodrow’s evidence.
Clearly the funds received by Mr Goodrow were applied towards credit card accounts in his sole name and some contribution from those funds thereafter made for the benefit of the parties (whether towards payment of stamp duty or otherwise) in acquisition of the Property L property. That contribution should also be acknowledged and weighed at this time although it is clear that:
a)Beyond the three payments of $5,000 each made in December 2001 there is no discussion of the application of those funds or use or benefit received by the parties or either of them whether jointly or singularly); and
b)No further weight or consideration can be given thus to the contribution in the absence of evidence from Mr Goodrow.
Lest I am wrong with respect to the above approach I propose to also then assess contribution on a percentage basis as well as to approach the matter from the perspective of separate pools being maintained for superannuation and non-superannuation assets.
Percentage contribution
I am satisfied that a percentage contribution in the context of this case (which has some support in the submissions of Counsel for Ms Jeffrey) is arbitrary and artificial. However, to avoid suggested error I will approach that matter from that perspective in addition to the above.
The contributions the parties have made would clearly, on the basis of initial contribution, favour Ms Jeffrey. To that end I am satisfied, consistent with the findings above, that:
a)Ms Jeffrey made the sole contribution to the Property G property;
b)Ms Jeffrey’s financial contribution to each of the further two parcels of real estate purchased during the relationship (one of which has now been sold) was vastly superior to that of Mr Goodrow.
I am also satisfied, however that:
a)Both parties contributed for the benefit of the household and including through providing support, nurture and love and affection to the other (the evidence suggests a significant number of trips, including interstate travel for the purpose of attending shows and another holiday largely funded by Mr Goodrow from his income and it, in all probability, having resulted in a credit card debt having been incurred);
b)Both parties contributed towards the household during the relationship. Mr Goodrow’s evidence is that the totality of his income was, throughout the relationship and for a short period after separation, contributed to the joint account of the parties to which Ms Jeffrey had full access and which both parties used in meeting living expenses (as well as clearly payment of Mr Goodrow’s pre-cohabitation debts);
c)Both parties contributed towards renovations and improvements of the properties purchased by them during the relationship. As indicated I am not satisfied that there is any evidence to suggest deficiency in the renovations undertaken by Mr Goodrow and I cannot find that it is so.
Funds that were introduced by Mr Goodrow on termination of his employment are analogist to a chose-of-action introduced to the relationship. The majority of employment undertaken by Mr Goodrow with (omitted) occurred prior to the relationship and thus the calculation of his termination benefits on resignation were significantly impacted by pre-cohabitation employment. To that end I am satisfied that some weight must be afforded to those funds.
The lump sum introduction of funds by Mr Goodrow (whether through resignation benefit or income) must be outweighed, however, by the funds introduced by Ms Jeffrey particularly from the sale of her Property G property (in excess of $153,000). In those circumstances I would assess the contributions of the parties as being in favour of Ms Jeffrey in a range of 60-65% and thus in favour of Mr Goodrow as to 35-40%.
If each party were to retain the property presently in their possession that represents an approximate 55%/45% division favouring Ms Jeffrey. However, at this stage I have assessed only contribution and thus I must also consider what adjustment, if any, should be made pursuant to section 90SF of the Act.
Separate pools for superannuation and non-superannuation assets
In the event that I were to proceed on the basis of separate pools (and I preferred and adopted a global approach whereby all assets are included) this would see the only significant non-superannuation asset being the equity in the home ($28,914) and the superannuation pool ($187,644).
The contributions that the parties have made towards the non-superannuation assets would, if separate pools were utilised, so dramatically favour Ms Jeffrey as to approach if not be found to be a 100% contribution to that property.
As regards superannuation assets I am satisfied that the parties’ contributions would be adequately reflected in each party retaining the entitlements in their respective names. This is particularly so as:
a)Neither party, I am satisfied and so find, has made any contribution to their superannuation entitlements over and beyond the compulsory employer superannuation contribution;
b)The percentage growth in each party’s entitlements is not dissimilar;
c)Each party has introduced funds which are proportional to the amounts which they would now retain;
d)The relationship of the parties has been brief.
Summary regarding contribution
Overall I am satisfied that the initial approach adopted by me (a global pool comprising both superannuation and non-superannuation assets and a non-percentage based assessment of contribution) is correct and would favour a finding of contribution wherein each party retained that which was in their possession (or which, in the case of the real estate property is conceded to be transferred to Ms Jeffrey).
Contributions on a percentage basis, whilst I consider such an approach artificial and inappropriate, would favour Ms Jeffrey as to 60-65%.
Contributions if separate pools of superannuation and non-superannuation assets were considered would see Ms Jeffrey’s contribution to non-superannuation assets being approximately 100% and the parties’ respective contributions to superannuation being reflected by their present entitlements.
In closing, I am conscious that the artificiality of seeking to proceed on a mathematical or percentage basis in a case such as this (where Mr Goodrow will clearly retain a net negative position at least as regards non-superannuation assets) and even if he is successful in prosecuting the Orders that he seeks and whereby Ms Jeffrey will retain a modest equity in property is referrable to seeking to apply 18th century laws of physics to space travel and ignoring the contributions of Einstein and others. There is simply no comparison between the logic which would apply in either circumstance.
Justice and equity must surely be determined by reference to the facts and circumstances of each case and could not be other than so applied and determined. To seek to quantify, in a rational, mathematical basis, the contributions that the parties have made to a pool of such quantum has the potential, in my mind, to produce an outcome that is inherently and manifestly unjust and inequitable.
Section 90SF of the Act
Comparable to but separate and distinct from a consideration of section 75(2) factors (dealing with property adjustment suits between married parties) one must turn to and consider each of the factors set out in section 90SF(3) being in the following terms:
(3) The matters to be so taken into account are:
(a)the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship ); and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(i) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 90SM in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(o) the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i) a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii) a person who is a party to another de facto relationship with a party to the subject de facto relationship; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(p) the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i) a party to the subject de facto relationship; or
(ii) a person who is a party to a marriage with a party to the subject de facto relationship; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(q) any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and
(r) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(s) the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t) the terms of any financial agreement that is binding on a party to the subject de facto relationship.
In dealing with each briefly:
Paragraph (a)
The parties are respectively aged 47 and 45 years of age. There is no evidence that either party suffers from any health or other difficulty which would impact on their capacity to participate in paid employment. Mr Goodrow asserts that he suffers from high blood pressure and takes medication with respect to same and has recently been diagnosed with severe depression treated by medication.
There is no suggestion on Mr Goodrow’s evidence, (leaving aside difficulties as to its form), that this has or will likely impact upon his income or earning capacity.
Paragraph (b)
Neither party has available to them any financial resource. Each has superannuation available to them although non-vested.
Each party is capable of earning income and it would appear each is presently (although Mr Goodrow’s evidence is other than up to date) earning comparable income.
Paragraph (c)
Neither party has the care and control of children under the age of 18 years.
Paragraph (d)
The commitments of the parties are entirely to enable them to support themselves. Neither party has any duty or legal obligation to maintain or support any other person.
Paragraph (e)
Addressed above.
Paragraph (f)
Neither party is eligible to nor does either party receive any income tested pension, benefit or entitlement whether from Commonwealth or superannuation.
Paragraph (g)
As to a standard of living that in all the circumstances is reasonable:
a)Ms Jeffrey leaves this relationship with a significantly higher level of debt than she entered it. She has, as a consequence of that debt the “benefit” of owning property which will, by consent, be transferred into her sole name subject to a re-financing by her of the debt encumbering same.
b)Mr Goodrow leaves the relationship very much as he entered it being dependent upon the rental market for his accommodation.
c)Ms Jeffrey, whilst liable for the mortgage encumbering the home at Property L, is not liable for payment of any other debt. Mr Goodrow will retain a significant level of debt.
The standard of living which each party maintains is diminished from that which they enjoyed at the commencement of the relationship and there is little to be gained from seeking to determine the extent to which one might be more or less disadvantaged than the other. Each will maintain a standard of living based upon the assets or liabilities which they retain and the income that they each earn.
Paragraph (h)
Maintenance is not sought by either party nor considered.
Paragraph (i)
The Orders sought by each party do not interfere with (and to the extent that Orders are sought to seek to apportion the debt presently in Mr Goodrow’s sole name will not affect) creditors. Indeed the Court is absent jurisdiction to make an Order binding on creditors and no application is made that it be so.
Mr Goodrow seeks an Order that would have Ms Jeffrey pay to him a sum of money in a lump sum and which would in all probability (although no prescription is sought to attach thereto) be applied towards reduction of debt and thus benefit creditors.
Any Order for payment of a lump sum by Ms Jeffrey to Mr Goodrow would, I am satisfied:
a)Be unjust. Ms Jeffrey is already so financially disadvantaged as a consequence of this relationship that any further impost upon her would, by and of itself, be unjust;
b)Any such Order would be entirely problematic as there is no realistic capacity to borrow further funds as against or using the Property L property as security and if the property was sold it is unlikely there would be any net proceeds or significant net proceeds of sale realised and thus nothing would be achieved save to render Ms Jeffrey homeless.
Paragraph (j)
Not relevant.
Paragraph (k)
The relationship has subsisted for three years. It has not affected the earning capacity of either party. The earning capacity of Ms Jeffrey was initially affected although she would appear to have recovered from that disadvantage.
Paragraph (l)
Neither party wishes to continue in the role of parent and neither party is presently performing such role.
Paragraph (m)
Neither party is presently cohabiting.
Paragraph (n)
Neither party is bankrupt.
Paragraph (o)
The Orders that are proposed by each party will not affect third parties.
Paragraph (p)
Not relevant.
Paragraph (q)
Not relevant. Whilst Mr Goodrow has previously had a child support liability which had been of some great significance in the determination of these proceedings, at least as regards the factual history of the matter, there is no ongoing child support liability.
Paragraph (r)
As would be clear from the above I am not satisfied that any Order for payment of money by Ms Jeffrey to Mr Goodrow would be just and equitable nor justified on the assessment of contributions between the parties.
Conclusion regarding section 90SF of the Act
Overall I am not satisfied that any factor considered pursuant to section 90SF of the Act would warrant an adjustment in favour of either party save and except if I were to proceed on the basis of percentage findings of contribution and thus a percentage adjustment with respect to section 90SF(3). If that methodology were adopted then I am satisfied that it would be relevant to take into account that Mr Goodrow will remain liable for payment of debt and thus his income (whether equal, greater or less than that of Ms Jeffrey) will be significantly attached for the purpose of payment of debt and for some little time to come. In those circumstances I am satisfied that an adjustment in Mr Goodrow’s favour would be warranted to compensate him for that position and an adjustment in the order of 5-10%.
In the event that the approach which I prefer and propose to adopt were taken (to not seek to arbitrarily determine percentages but to simply assess, evaluate and weigh the parties contributions and other factors by reference to the facts and circumstances of the case) then I am satisfied that no further adjustment would be made.
Either approach would arrive at the same position.
Summary and conclusions
On the above basis and adopting the preferred methodology identified by me (a simple assessment of contributions and section 90SF(3)) I am satisfied that the assets and liabilities presently extant should fall where they fall.
As the parties each propose that the real property at Property L would be retained by the Applicant then Orders can be made, as it were by consent, for this property to be transferred to Ms Jeffrey and for her to re-finance the mortgage into her sole name.
I do not propose to make any Order with respect to superannuation splitting for the reasons above. I am satisfied that the Court is invested with jurisdiction to make such an Order it having been sought and procedural fairness having been afforded to the Trustee of the fund (see Exhibit A2).
If a mathematical percentage based approach were to be followed then I am satisfied that a single pool of property should be considered and so as to include real estate and superannuation and the liabilities in the sole name of Mr Goodrow. On this basis, contributions would favour Ms Jeffrey (as set out above) and section 90SF(3) adjustments would favour Mr Goodrow and with the net consequence that I am satisfied that overall the pool would be divided approximately 55% in Ms Jeffrey’s favour and the remaining 45% to Mr Goodrow. This would produce the same outcome.
Finally and if separate pools were adopted and contributions and section 90SF(3) adjustments determined then I am satisfied that this would, again, result in each party retaining such assets as are in their respective possession (and liability for debts in their sole names) and each party retaining their respective superannuation entitlements.
The only asset in joint names other than the real property in Property L which has not been considered is a joint bank account of the parties with (omitted) Bank. The Applicant proposes that this account be transferred to her sole name. The Respondent proposes that the account be closed and the balance divided equally.
The joint bank account has a present balance of $9.57. I am satisfied that no injustice will be occasioned to either party if I simply accede to the Orders sought by the Applicant and transfer this account to her sole benefit.
In light of the above matters I make Orders as follows.
I certify that the preceding one hundred and ninety-six (196) paragraphs are a true copy of the reasons for judgment of Judge Harman
Associate:
Date: 27 March 2014
Key Legal Topics
Areas of Law
-
Family Law
-
Property Law
-
Equity & Trusts
Legal Concepts
-
Appeal
-
Remedies
-
Jurisdiction
-
Constructive Trust
0
6
4