Jeter and Jeter
[2018] FamCA 938
•16 November 2018
FAMILY COURT OF AUSTRALIA
| JETER & JETER | [2018] FamCA 938 |
| FAMILY LAW – PROPERTY – Property adjustment – Where parties separated 18 years before trial – Where consideration of applicable principles – Where wife remained in occupation of home for many years – Where appropriate to make property orders. |
| Family Law Act 1975 (Cth) ss 75, 79 |
| Bevan & Bevan [2014] FamCAFC 19 Chapman & Chapman [2014] FamCAFC 91 Dickons & Dickons [2012] FamCAFC 154 Kessey and Kessey (1994) FLC 92-495 Pandelis & Pandelis [2018] FamCAFC 66 Russell & Russell (1999) FLC 92-877 Scott & Danton [2014] FamCAFC 203 Stanford v Stanford [2012] HCA 52 Teal & Teal [2010] FamCAFC 120 |
| APPLICANT: | Mr Jeter |
| RESPONDENT: | Ms Jeter |
| FILE NUMBER: | PAC | 6007 | of | 2016 |
| DATE DELIVERED: | 16 November 2018 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | 17 October 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Jackson |
| SOLICITOR FOR THE APPLICANT: | Michael Vassili Barristers & Solicitors |
| COUNSEL FOR THE RESPONDENT: | Mr Harper |
| SOLICITOR FOR THE RESPONDENT: | Warren & Warren Solicitors |
Orders
That within three months from the date of these orders the wife pay to the husband the sum of $540,000.00.
In consideration of such payment the husband do all things necessary to transfer to the wife his interest in the home at B Street, Suburb C, NSW being the land comprised in Folio Identifier … and that concurrently with such transfer the wife procure a discharge of any mortgage encumbrance presently secured over the said property so as to release the husband from any liability thereof.
In default of the wife complying with Order (1) above, the parties do all things necessary to sell the property at Suburb C for the best price reasonably obtainable and after selling expenses and legal costs on sale divide the net proceeds of sale as to 60 per cent to the wife and 40 per cent to the husband.
Liberty to apply as to implementation or enforcement of these orders.
That any application for costs be made by way of written submissions filed and served within one month from this date with any submissions in response to be filed and served within a further 14 days and thereafter judgment reserved to chambers.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Jeter & Jeter has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: PAC 6007 of 2016
| Mr Jeter |
Applicant
And
| Ms Jeter |
Respondent
REASONS FOR JUDGMENT
The matter for determination is the question of final property settlement as between the applicant husband and respondent wife.
The issues for determination involve an unusual circumstance in that the parties, having married in 1983, separated under one roof in about 2000 and on a final basis in May 2006 and it was not until more than 10 years later in December 2016 that the husband made an application for final property settlement orders as against the wife.
It appears that significant interlocutory issues engaged the parties for some time until the matter was first listed for judicial case management in late January 2018.
The husband in February 2018 filed an Amended Initiating Application and shortly thereafter the wife filed an Amended Response to the husband’s Initiating Application.
In his Amended Initiating Application the husband sought orders that, in summary, provided:
a)that the husband transfer the former matrimonial home at Suburb C to the wife;
b)that in consideration of that transfer the wife pay to the husband sum of $828,000.00;
c)consequential enforcement orders as to the sale of the Suburb C property in the event of a default by the wife;
d)that, otherwise, the wife be entitled to retain her ownership of properties situate at 1 and 2 D Street, E Town, New South Wales.
In her Amended Response the wife sought property adjustment orders, in summary, as follows:
a)that the wife pay to the husband an amount equivalent to 15 per cent of the value of the former matrimonial home at Suburb C;
b)that in consideration of that payment the husband transfer his interest in the matrimonial home to the wife; and
c)that concurrently with the transfer, the wife discharge the existing mortgage encumbrance secured over the Suburb C property.
Background
The wife is presently aged 55 and the husband 58.
The parties married in 1983.
The parties’ separation was in early October 2000 under the one roof.
In 2002 the wife and the children left the matrimonial home. After a period of absence from the home the wife and the children returned to occupy the home again living separately under the one roof with the husband.
The relationship between the parties deteriorated with Apprehended Violence Orders (“AVO”) being made for the protection of the wife and the children in April 2005 for a period of 12 months and then again in May 2006. As a consequence of the AVO made in early May 2006, the husband was required to leave the home. The AVO order was for a period of two years and excluded the husband from the home.
There are two surviving children of the parties’ relationship now aged 34 and 28. A third child of the parties died in infancy. Subsequent to final separation in May 2006, the husband has had no contact with the children.
At the commencement of cohabitation the husband and the wife were bot employed. Their incomes were modest.
At the commencement of their cohabitation the parties had savings. The wife says she had about $19,000.00 and the husband about $20,000.00. The husband says he had savings of about $45,000.00 and a car. There is no objective evidence as to his savings. Where in the financial year ended June 1986 his full time net income was only about $230.00 per week (Exh “F”), his capacity to accumulate such savings would represent about four years’ salary. The wife’s evidence is to be preferred.
The wife’s parents gifted to them $13,700.00 to cover the cost of their wedding and they received about $14,000.00 in cash as gifts on their wedding.
Subsequent to marriage, the parties occupied the present matrimonial home at Suburb C. This property was at that time owned by the husband’s father. The property was occupied by the husband’s father, the husband’s brother and the parties.
The wife ceased employment shortly before the birth of the parties’ first child in 1984 and thereafter she ceased paid employment and devoted her care and attention to the children and the parties’ household except as referred to below.
The Suburb C property
In 1985 the parties acquired the Suburb C property from the husband’s father for the sum of $100,000.00 as evidenced in the registered transfer. At the time of purchase of the property in 1985 the parties paid to the husband’s father the sum of $67,000.00 which comprised their savings at marriage of about $40,000.00 and subsequent savings and wedding gifts accumulated in their joint account with the Commonwealth Bank of Australia.
The husband asserts that the balance of purchase money was forgiven on the basis that he paid $40,000.00 to his brother of which his father agreed to fund $10,000.00. The husband asserts the payment to his brother in May 1985 of $40,000.00. He says the payment was from his “personal” account with the Commonwealth Bank of Australia.
There is no evidence of any such personal account save for the husband’s assertion and there is no evidence that would support a finding that the husband had $30,000.00 in addition to funds provided to pay to his father from their joint savings. The wife says that no such payment was made to her knowledge. The husband’s brother asserts a payment to his joint account with his wife of $40,000.00 from the husband’s “bank book”. Yet in his oral evidence the husband says he transferred $40,000.00 to his father’s account. His brother gave evidence that funds were transferred into his account by the husband “using his bank book”. Yet the funds, if the husband’s evidence is accepted, were already in his father’s account. The father was for some reason present at this alleged bank transaction and had about $300,000.00 in his account. In the absence of documentary supporting evidence, that is surprisingly lacking, the Court is not satisfied that funds were sourced and paid as asserted by the husband. A likely possibility is that funds were simply transferred from the father’s account.
This asserted transaction would be significant if the parties did not pay full consideration for the purchase of Suburb C but as discussed below such is not the case.
In 1991 upon the husband’s father vacating the property the parties paid to him the sum of $37,000.00 comprising the balance of the original purchase price plus $4,000.00 interest. This payment was funded by way of a National Australia Bank mortgage secured over the matrimonial home that had been negotiated in 1988 for the purposes of the parties’ mixed business referred to below. As at 1991 there were no funds owing on the mortgage. The parties later borrowed to fund the payment to the husband’s father with a further sum borrowed later with those funds being applied to discharge two car loans (Exh “J”) at that time. The National Australia Bank mortgage statement for February 1993 (Exh “I”) reveals a balance owing of about $33,000.00 with the loan statements commencing in early 1990. This is consistent with the wife’s evidence of funds borrowed to pay back her mother with the loan paid out when the parties exited their mixed business receiving a payment of about $20,000.00 for stock that the wife says was used to pay out the National Australia Bank at that time.
The mixed business
In May 1987 the parties purchased a business at Suburb F paying $19,000.00 for stock that was advanced to them by the wife’s parents. The wife’s parents were repaid from a bank loan of $18,000.00 from the National Australia Bank borrowed by the parties in June 1988 with that loan being paid out on the sale of the business later for stock value.
The parties worked in the business for several years until the business was sold for stock value of about $19,000.00 in mid-1990 with the wife at that time expecting the birth of the parties’ second child.
Later in the relationship
The husband then obtained employment with Company G for about three years but he ceased that employment in 1993. By this time the wife was working full-time and for a period provided the sole financial support for the family.
In 1995 the husband received a compensation payment arising from a hand injury suffered while working at Company G. There is no evidence as to the components of this payment but as the husband was out of work for about two years it is to be inferred that a significant component was for lost wages as he received some payments from Company G and then some Centrelink benefits.
The husband returned to part-time employment in about 1995 and as such was able to assist somewhat with the care of the children.
In August 1993 the wife commenced part-time employment until January 1995 when she obtained full-time employment. As at June 2002 her income was about $57,000.00 per annum. She continues in that employment as at the date of the trial and in 2007 obtained a part-time appointment.
At about the time of separation in 2000 the wife had a superannuation balance of $34,000.00. Since then she has continued to salary sacrifice and accrue superannuation from her own efforts in employment.
The children of the marriage, at the time of separation in 2000, were aged 16 and 10. The wife has received no financial support for the children since separation initially under the one roof in 2000 and whilst she and the children remained living in the matrimonial home, and indeed while she was out of the home with the children in 2002 for a period, she has assumed responsibility for the totality of their financial support and the mortgage and most other outgoings in relation to the matrimonial home.
As at March 1999 the mortgage balance on the home was about $49,600.00 having been increased further in addition to the borrowing to pay the husband’s father so as to pay out two car loans in 1997.
Subsequent to the parties’ final physical separation in 2006 the wife expended some monies on her repairs and improvements to the home at Suburb C using some funds borrowed from her daughter. The wife has paid out the mortgage on the home since separation under the one roof. Yet she has had the use and benefit of sole occupation now for 12 years.
The youngest child now aged 28 remains living with the wife in the matrimonial home and is undertaking tertiary studies and is in employment.
The wife is in poor health suffering from a number of medical conditions including Panniculitis. Her medical specialist dermatologist provides evidence as to the ongoing discomfort suffered by the wife but encourages the wife to remain active in order that she does not lose flexibility and mobility or gain excessive weight. He recommends that it is best for her to remain working to ensure no loss of mobility.
In 2008 the husband withdrew $22,000.00 from his superannuation by reason of financial hardship.
He lives in Department of Housing accommodation and has done so for some years. He is in employment earning about $48,000.00 per annum before tax.
The E Town properties
Subsequent to the parties’ final separation in 2006 the wife firstly purchased a property at 1 D Street, E Town in July 2009 for the sum of $265,000.00. The purchase price comprised the wife’s savings at that time and a mortgage advance from the National Australia Bank. This property has been tenanted since purchase.
In June 2006 the wife purchased a property at 2 D Street, E Town for the sum of $270,000.00. The purchase price again comprised the wife’s savings, funds lent to the wife by her daughter and a mortgage advance from the National Australia Bank. This property has also been tenanted since purchase.
The properties have a combined value of $620,000.00 with a combined mortgage debt of about $476,000.00.
It is common ground between the parties that the post separation properties acquired by the wife are not to be included the matrimonial pool for adjustment but are to be regarded as a financial resource available to the wife under s 75(2) of the Act.
A Word about the evidence
In matters such as this where the parties have been separated for a long period, recollections of events and circumstances are at best subject to some frailty.
It is also a problem in sourcing objective evidence to support one’s recollection whereby the passing of time documents are no longer in a party’s possession or a subpoena to a third party would be of little utility.
In this matter the Court has looked for any scintilla of objectivity to assess the evidence of the parties and their recollection over ever aging events. The wife, to her credit, has sourced some objective evidence that has corroborated much of her evidence as to financial matters. The husband and his witnesses have not done so and, indeed, it appears has not sought to do so. Such may simply have been a consequence of poor forensic decision making.
Whilst it is accepted that he has endeavoured to give evidence to the best of his recollection, it is also clear that where there is a conflict in the evidence of the wife and husband, the wife’s evidence is to be preferred.
Property adjustment
The approach to the determination of an application under s 79 of the Act is set out in Stanford v Stanford [2012] HCA 52 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman [2014] FamCAFC 91 and Scott & Danton [2014] FamCAFC 203.
The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act.
In many cases this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship. Such is the case here with the primary asset remaining in the joint names of the parties.
In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here at trial the wife seeks an order for adjustment of property by way of cash adjustment as does the husband.
Otherwise, a consideration of s 79(4) factors as discussed below reveals it would be unjust or unfair to leave the parties’ property rights as they are.
Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g), in particular, the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant (s 79(4)(e)).
The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.
The asset pool
The parties are in agreement as to the present asset pool for division (ignoring minor assets and small liabilities unrelated to the cohabitation) and it comprises the following:
Joint Home at Suburb C $ 1,400,000.00
Superannuation:
Husband H Super $ 38,639.00
Wife J Super $ 779,474.00
Otherwise, the wife has two investment properties although subject to significant mortgage debt to which the husband made no contribution. It was agreed that these properties would be excluded from the pool for division but be regarded as a financial resource.
It was contended by counsel for the husband that the Court would adopt a two pools approach by reason of the disparate contributions to the home and the parties’ superannuation. It is considered that for such reason a two pool approach is appropriate.
Contributions
In Kessey and Kessey (1994) FLC 92-495 (Full Court) at 89,151 the Full Court made clear that ultimately all that is necessary is to evaluate the weight that should be given to each party’s contributions relative to the contributions of the other party:
... In many – indeed probably in most – property settlement cases the Court has to evaluate and assess contributions to property in the absence of precise valuations of the contributions in question. Indeed, where the contributions to property are indirect or non-financial, precise valuation is impossible, and even where the contributions are direct or financial so that a valuation might be provided, other factors (not capable of precise mathematical statement) may well have eroded the initial value of such contributions. In a case such as the present, it is not necessary to arrive at precise mathematical valuations of the parties’ contributions - all that is necessary is to evaluate the weight that should be given to each party’s contributions relative to the contributions of the other party.
In Dickons & Dickons [2012] FamCAFC 154 the Full Court said at [24] and following:
There can be little doubt that the classification of contributions by reference to terms such as “initial contributions”, “contributions during the relationship”, and “post-separation contributions”, can be helpful as a convenient means of giving coherent expression to the evidence in a s 79 case and to giving coherence to the nature, form and extent of the parties’ respective contributions. However, the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship. So much is clear from the terms of s 79 itself and, in particular, s 79(2). The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.
Doing so is also consistent with the demands of authority that the ultimate assessment of contributions should be made without “...giving over-zealous attention to the ascertainment of the parties’ contributions...” (Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 at 524) and the well-established recognition in the authorities (acknowledged specifically by her Honour in this case) that the process required of the Court by s 79 is the exercise of a wide discretion, not the performance of a mathematical or accounting exercise.
The necessarily imprecise “wide discretion” inherent in what is required by the section is made no more precise or coherent by attributing percentage figures to arbitrary time frames or categorisations of contributions within the relationship. Indeed, we consider that doing so is contrary to the holistic analysis required by the section and, in the usual course of events, should be avoided (emphasis added).
The home
The relationship of the parties lasted for a period of about 17 years. Until separation under the one roof their contributions in their various roles as to income, parenting and the households are such that they should be regarded as equal. The husband’s employment was to some extent inconsistent, but his contributions were supported by the parties living in the paternal grandfather’s home until its purchase and the delayed payment of the balance of purchase price for some years.
Subsequent to the “under the one roof” separation, the wife’s contributions to the home in terms of her financial support for the children, payment of mortgage payments and her primary parenting role are readily seen as greater than that of the husband. After final physical separation in 2006 the wife’s contributions continued as to parenting in relation to the youngest child still under 18 for about two years. She did not receive any financial support from the husband.
She expended money in and about the maintenance and repair of the home albeit in circumstances where she had exclusive occupation. Otherwise, she has had occupation of the parties’ significant asset now for many years such that the husband has been deprived of his equity and the wife has thus benefited from her ongoing occupation.
The property itself has simply increased in value over time since purchase, an increase not attributable to either party. The delay in proceedings being commenced means that any adjustive order will in today’s terms be much more significant. One can only ask why there was such inordinate delay.
Overall, it is to be considered that contributions favour the wife as to 60 per cent and the husband 40 per cent.
Orders to be made have no impact on the earning capacity of either party.
Section 75(2) factors
The Court is required to consider such factors as may be relevant.
The wife is aged 58 with some health issues. It is not suggested that her health impacts on her earning capacity. The husband is 55 and in fair health. He does not assert any issues as to his ongoing earning capacity.
The wife is in a far superior income position to that of the husband but such is by reason of her ongoing employment for many years after separation in 2000. The husband’s income is modest at $47,000.00 per annum but his work history since separation is mostly unclear. There is no evidence of the husband seeking to improve his employment circumstances by retraining or further education. At separation he was only 37 years of age. Otherwise the wife has two investment properties subject to a significant mortgage.
Both parties have no other person to support.
Both have superannuation as discussed below.
Neither party is cohabiting with another person.
The husband failed to provide child support for the children from separation under one roof in 2000.
A consideration of these factors leads to the conclusion that now, many years after separation, there should be no further adjustment to the contribution based entitlements of the parties.
Overall there will be an adjustment as to home as to 60 per cent to the wife and 40 per cent to the husband. This will result in a disparity of about $280,000.00 between them. Such is just and equitable in the circumstance of this matter as discussed above.
The wife will be required to pay the husband $560,000.00 to acquire his interest in the property. In default the property is to be sold.
Superannuation Pool
The superannuation pool is significant solely by reason of the accumulation of the wife’s super entitlement since separation. Indeed, the husband has dipped into his super to the extent of $22,000.00 some years after separation.
The disparity of the parties’ super is significant but solely by reason of the wife’s salary sacrifice contributions and her ongoing employer contributions over 18 years since separation.
There is no evidence as to any superannuation at the time of cohabitation commencing. By 2008 the husband was able to withdraw $22,000.00 from his fund and at present has about $38,500.00. No documents regarding his superannuation at various relevant dates are in evidence.
The wife at about the time of separation had super of about $34,000.00.
Doing the best on the evidence, or lack of it, it is perhaps likely that the parties’ super at separation was roughly approximate. Thereafter the accrual of super has been by reason of their respective work endeavours without contribution from the other.
It is appropriate that contributions be regarded such that the parties retain their respective present entitlements without adjustment. Indeed, the husband sought no superannuation splitting order.
Section 75(2) factors
These have been considered above.
Both parties will continue to accrue superannuation by reason of continuing employment. It is trite to say that the wife will accrue superannuation at a greater rate by reason of her own salary sacrifice contributions and her higher income.
The husband will receive a significant capital sum by way of adjustment of the non-super property pool.
This is not a circumstance where the Court should embark on “social engineering” and simply by reason of disparity adjust the non-super property pool further to the husband. There will be no further adjustment.
It is considered that orders reflecting the above discussion in all the circumstance will be just and equitable.
Orders will be made accordingly.
I certify that the preceding eighty-six (86) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 16 November 2018.
Associate:
Date: 16 November 2018
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