JOBBSIN & JOBBSIN
[2010] FMCAfam 330
•1 April 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| JOBBSIN & JOBBSIN | [2010] FMCAfam 330 |
| FAMILY LAW – Whether waste by gambling or extravagant spending – effect on contributions of payment to husband shortly before separation. |
| Family Law Act 1975 (Cth), s.72(2) |
| Hickey [2003] FLC 93-143 C & C [2005] FLC 93-220 |
| Applicant: | MS JOBBSIN |
| Respondent: | MR JOBBSIN |
| File Number: | MLC 8789 of 2008 |
| Judgment of: | Phipps FM |
| Hearing dates: | 29 & 30 July 2009 |
| Date of Last Submission: | 30 July 2009 |
| Delivered at: | Melbourne |
| Delivered on: | 1 April 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr Robinson |
| Solicitors for the Applicant: | Efron & Associates |
| Counsel for the Respondent: | Mr Weil |
| Solicitors for the Respondent: | Susan Snyder |
ORDERS
That the property situate at and known as Property G Victoria, (the property), be sold in a manner agreed and if not agreed by an agent and in a manner nominated by the President for the time being of the Real Estate Institute of Victoria or his or her nominee and the proceeds be applied:
(a)First in payment of the costs and expenses of the sale;
(b)Second in discharge of the mortgage and any other encumbrances over the property;
(c)Last by dividing the balance as follows;
(i)add the amount of $141,200 to the balance;
(ii)pay 60% less $3,000 of the amount calculated under (i) to the wife and the remainder to the husband.
That the wife transfer all her right title and interest in the property at Property N, Victoria to the husband.
The husband indemnify the wife against all liability in respect of the mortgage and other payments in respect of the said property at
Property N.
That:
(a)The wife forthwith resign as a director and office holder of [J] Pty Ltd and transfer any share in her name to the husband or at his direction;
(b)The husband and the wife do all things necessary to remove the wife as a beneficiary of the [Jobbsin] Family Trust;
(c)The husband indemnify the wife against all liability in respect of [J] Pty Ltd and the [Jobbsin] Family Trust.
The husband pay the wife spousal maintenance of $300 per week first payment 9 April 2010 and last payment 9 March 2011.
That the husband allocate 50% of frequent flyer points at the direction of the wife.
That the husband cause his solicitors to file minutes of proposed orders so that there is a splitting order of the husband’s main superannuation account in favour of the wife with a base amount of $50,000 and file evidence that the Trustee of the fund has been given procedural fairness.
Otherwise each party is declared to have no interest in the property including bank account and superannuation in the possession of the other party.
The application is otherwise adjourned for the making of superannuation orders and each party has liberty to apply.
IT IS NOTED that publication of this judgment under the pseudonym Jobbsin & Jobbsin is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 8789 of 2008
| MS JOBBSIN |
Applicant
And
| MR JOBBSIN |
Respondent
REASONS FOR JUDGMENT
Introduction
Ms Jobbsin, who for convenience I will call the wife, and Mr Jobbsin, who for convenience I will call the husband, disagree on the distribution of their property and whether the husband should pay the wife spousal maintenance.
The wife was born [in] 1952. The husband was born [in] 1955. They married [in] 1985 in Israel. They separated under the one roof on 2 September 2008. They have one child from the marriage, [X] born [in] 1986. The wife has one child from a previous marriage, [Y] born [in] 1977. Both children are over 18 and live independently.
The parties migrated to Australia in June 1986. [Y] was 8 and the wife was 7 months pregnant. [Y] was diagnosed with cancer in mid 1987 and could not attend school for 2 years. The wife stayed at home caring for the children and fulfilling the role of homemaker. The parties disagree in their affidavits about the capability of the wife as a homemaker, but ultimately the issue is not relevant because it is common ground that, subject to certain specific issues, contributions are equal.
At the time of the marriage the wife had US$26,000 settlement from her previous marriage. The husband had a similar amount. The money was used to migrate and establish in Australia.
About twelve months after coming to Australia the parties purchased an [omitted business] in Camberwell. They sold it after six months and the husband worked [in the transport industry] for two years. He then worked [in the real estate industry].
The parties rented accommodation until in 1997 they purchased Property G for $271,000 borrowing $214,000. In 2001 they increased the mortgage by $100,000 and in 2005 by a further $200,000. They have paid interest only so that the mortgage is now about $500,000. The value of the property is not agreed but does not affect the resolution of the case because the parties agree that the property be sold and the proceeds divided. The husband obtained a appraisal of about $750,000 so that there is about $250,000 to be divided.
In 2004 the husband’s father died in Israel. The husband says that he and his brother became entitled to a 3/8 interest in his apartment, but subject to their mother’s right to remain in the property for the rest of her life. He says that he and his brother gave up their interest in favour of their mother. No claim is made that the husband has any interest in his father’s estate.
In 2005 the husband received an amount of $155,000 as a restitution payment from the German Government for property taken by the Nazi Government from the husband’s grandparents. He gave some money to [X] to purchase a car, paid a deposit on an investment property and set up a [G] business.
The [G] business was commenced in September 2006. The business is owned by [J] Pty Ltd as trustee for the [Jobbsin] Family Trust. The establishment cost was $80,000. Its value was an issue at the commencement of the hearing. During the hearing the valuer, Mr W, accepted that its value is its net asset value, $61,000, and its value ceased to be an issue. The business is not making a significant income. The parties agree that it will be retained by the husband.
The investment property was purchased with the parties friends
Ms & Mr Z. It is a property at Property N. It is near the [omitted] University and is rented to students. The rental covers the mortgage and expenses except that the parties owe Ms & Mr Z $4,800 to equalise expenses. The amount is not agreed but I accept the husband’s evidence about the items and amounts.
The parties agree that the husband retain their interest in the investment property, the net value of which is $75,000.
The matter commenced in the Family Court of Australia.
On 21 October 2008 (amended under the slip rule on 29 October 2008), Cronin J. ordered the husband pay interim spousal maintenance of $345 per week first-payment 31 October 2008, the parties draw down on the mortgage the sum of $10,000 to be paid to the wife to be taken into account by the trial judge and the final distribution of property and that the husband pay the wife’s costs of $7,000 to be paid from the husband’s entitlement in the property settlement.
On 5 May 2009 I ordered by consent that the husband draw down on a frozen bank account an amount of $465 then $165 per week to be taken into account as partial distribution of property, costs or maintenance as the Federal Magistrate hearing the case sees fit. The money in the bank account could only have come from the husband’s earnings and so the appropriate way to treat the payments is as payed under the interim maintenance order.
Specific issues are that the wife alleges that the husband gambled and the husband alleges that the wife was extravagant, and how $155,000 received by the husband from Germany effects contributions.
The issues must be placed in the context of the four step property consideration process.[1] The steps are:
[1] Hickey [2003] FLC 93-143. For superannuation C & C [2005] FLC 93-220
What are the assets and liabilities?
What are the parties’ contributions?
What are the parties future needs?
Is the order just and equitable?
Assets and Liabilities
Property G net $250,000 but not agreed. To be sold.
Property N net $75,000 less monies owed to Ms & Mr Z $4,800 and $70,200.
Jobbsin Family trust-[G] business $61,000.
Wife’s payment $10,000.
The husband has a leased motor vehicle and receives a car allowance as part of his remuneration. The wife has a motor vehicle. There are no formal valuations. They seem to be of about equal financial advantage to each party so I do not take them into account. The net assets are $141,200 plus the net value of the matrimonial home. To be taken into account is the $10,000 the wife has received and $7,000 the husband must pay.
The husband has about $100,000 in superannuation and the wife a little over $3,000. The parties agree that frequent flyer points be divided equally by the husband allotting half at the wife’s direction.
Contributions
Apart from specific issues raised contributions are equal. The husband’s greater financial contribution is matched by the wife’s care of children and homemaker role.
Husband’s gambling and wife’s extravagance
According to the wife, over a period of about seven and a half years the husband attended Crown Casino on a regular basis gambling. The wife submits that he lost, and so wasted a substantial amount of money, she says $200,000, and that should be taken into account in assessing contributions under the second stage of the four stages of the assessment process.
The husband in his affidavit says that the loss was about $50,000. He says that on many occasions the wife attended with him. It was part of their life together.
The husband says that he commenced on gambling machines and then moved to gambling tables. He says the wife attended with him. At first it was only occasionally and at the highest was two or three times a week.
There is some documentary evidence. The wife annexes to her affidavit bank statements for the party's joint account with withdrawals of about $50,000 from automatic teller machines over a total period 10 months. These are not continuous. They are various periods between June 2003 and February 2008.
The husband was cross-examined about the withdrawals between
16 June 2003 and 2 July 2003. The total amount of $6,000 in cash was withdrawn. The husband acknowledges that $3,500 was withdrawn from automatic teller machines at or near Crown Casino. He did not acknowledge that either $6,000 or $3,500 was lost in this time at the casino. He said some could have been used for expenses, and that the wife's calculation did not take into account deposits of winnings. He specifically mentioned $15,000, but did not identify this deposit on any bank statement.
In support of his statement that he gambled about $50,000 the husband made this calculation. He said that his income taken from his tax returns plus the $300,000 increase in the home mortgage and the $155,000 he received from Germany equals $925,000. Interest on the home mortgage was $250,000, $80,000 was spent purchasing the [G] business and $50,000 towards the investment property in Property N. That leaves $545,000 which is approximately $1,500 per week over
7 years. He said that if he had spent large amounts on gambling they could not have lived the way they did.
The husband kept a handwritten document showing total losses of $29,010. The husband says this is a piece of paper which he kept in the glove box of his car. The husband says that up to some time in 2007 each time he returned to his car in the casino car park he recorded the amount won or lost and a running total on the piece of paper. He recorded it in three columns, the first the amount won or lost, the second the running total and the third the visit number. The last running total is a $26,635 loss. There are then another seven amounts, all losses in the hundreds of dollars not added to the total. When they are added the total cost is $29,010. The total number of visits recorded, including the last seven, is 442.
At an average of three visits per week the husband's record sheet, if accurate, records losses of about three years. If it is consistent with the previous and subsequent period his total loss over seven and a half years is much closer to the husband's estimate of $50,000 than the wife's estimate of $200,000. If the loss is $70,000, that is about $10,000 per year.
This is a fairly high amount given that the husband's yearly income in the latter part of this time was around $100,000. Nonetheless, he was able to pay the interest on the home mortgage, admittedly substantially increased and have a reasonable standard of living.
The husband alleges that the wife spent extravagantly. Specifically he claimed it was up to $4,000 per month on clothing, cosmetics and similar discretionary spending. The wife acknowledges that in 2008, a particularly stressful year, she compensated by spending money. The husband says he got his estimate from analysing credit card statements.
Some of the credit card statements are in evidence. An analysis of several months in 2007 show spending by the wife on what might be called discretionary items of about $1500 per month. The husband's claim of $4000 per month over a long period of time is not established.
The husband draws attention to a holiday in Israel taken by the wife. She says it cost $14,000. The husband says it cost more. Given that Israel is both parties country of origin, a holiday by the wife after many years in Australia is not an extravagance.
A precise calculation of the husband’s gambling spending is not possible. If his handwritten record is accurate it is not consistent with the wife's claim of the total loss of $200,000. The level of losses in the handwritten document is not consistent with the aggregate 10 months of cash drawings the wife points to. However, these are snapshots. It seems that the wife says that these were the statements she could find. Nonetheless, they do not give a complete picture. The husband's assessment of the total funds available over 7 years is evidence that the amount of money going to gambling is closer to his estimate $50,000 than the wife's estimate of 200,000.
The evidence suggests that the wife spent about $1,500 per month on clothing cosmetics and similar items. Not all of it can be described as discretionary spending. Some is essential.
What has happened in this case is that the husband has spent more than perhaps desirable on gambling and the wife similarly on discretionary spending. This is the way they lived their lives. It is not a case where either party has “acted recklessly, negligently or wantonly with matrimonial assets the overall effect of which has reduced or minimised their value”[2]
[2] Kowaliw (1981) FLC at 76,644
Husband’s $155,000 from Germany
The husband received the $155,000 in 2005, 20 years into the 23 year relationship. The value of the non superannuation property is about $490,000. $155,000 is about 40% of this.
Apart from this amount the parties’ contributions are equal. The money from Germany was used for the purchase of the [G] business and the investment property. Some of the money went to the parties’ son [X], some were spent on a holiday in Vietnam and some of it on general expenses, including perhaps gambling. An asset by asset approach is not appropriate. Apart from other considerations the [G] business has a lower value than the initial expenditure, but in the meantime it has contributed some although not much, income.
The $155,000 is a contribution by the husband three years before the relationship ends. The appropriate adjustment from equal contributions is 10% in favour of the husband so that contributions are 60% by the husband and 40% by the wife.
Future needs - section 75(2)
The relevant considerations are the age and health of the parties and their income and property. The parties’ standard of living has been similar and they have similar expectations.
The first of these considerations is the age and the state of health of the parties. The wife is 58 and the husband is 54. Both have some health problems.
The second consideration is income and property. The husband’s income and his earning ability are higher than the wife’s. The husband is employed [in the real estate industry]. The wife works part-time [in the education industry] between 3.00 pm and 5.30 pm twice a week. She puts her income at $155 per week. She was cross-examined about her ability to attain more employment. She has tried to obtain other types of employment but she says her English language skills are a disadvantage. She did an [omitted] course but has not obtained employment in that field.
Dr E, a psychiatrist, saw the wife and prepared a report on her mental condition. His specific findings about her mental condition do not need to be repeated. What is relevant is that he considers she has a work capacity for her current duties and could increase those hours and duties if afforded the opportunity.
The wife was out of the workforce for many years caring for the children and the home. Her ability to find employment is limited to the type of work she now performs. She would work longer hours if the work was available and has in the past. Her ability to earn income is limited to what she is now doing.
The husband is employed [in the real estate industry]. He receives a retainer commission and car allowance, the retainer being deducted from the commission as commission is paid. His income in 2008 was $200,000. He says that was an exceptional year and says that his average is about $110,000 - $120,000 a year. His earnings depend on the state of the real estate market. His estimate is realistic but at the lower range end of his likely earnings.
The wife is about 3½ years older than the husband. Both are towards the end of their working lives. However the husband will be able to work for a longer time than the wife, earning a significantly higher income. The adjustments for these matters is 20%.
Superannuation
The husband's receipt of money from Germany does not affect contributions towards superannuation. The s.75(2) matters referred to above are not relevant to adjustment of superannuation. Superannuation is to be adjusted so that each party receives half.
Spousal Maintenance
The wife applies for a continuation of the current order that the husband pay spousal maintenance. She cannot support herself adequately on an income of $155. I am satisfied that that is an adequate reason within the meaning of s.72(2) of the Family Law Act1975 (Cth) to make an order for spousal maintenance.
The parties currently live in the matrimonial home. Their circumstances will change once the home is sold. Their living expenses will be roughly equal. Therefore assessment of the amount is to be made based principally on their potential incomes.
I take into account the fact that the wife will have a capital amount and the husband will have less. I consider that an appropriate assessment is $300 per week for 1 year.
Conclusion
The husband receives the investment property $70,200 and the [G] business $61,000, total $131,200. The wife has received $10,000. The husband must pay costs of $7,000. The property pool is the net proceeds of the sale of the Property G home plus $141,200. The wife is to receive 60% of that amount less $3,000.
The material does not have the name of the husband’s superannuation account nor evidence that the trustee has received procedural fairness. I will order that the husband cause his solicitors to file minutes of proposed orders so the there is a splitting order of the husband’s main superannuation account in favour of the wife with a base amount of $50,000. The amount of the husband’s superannuation was stated at approximately $100,000. I will not adjust for the wife’s small amount of superannuation. I consider that is the just and equitable way to adjust superannuation. Overall the orders I propose are just and equitable.
I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Phipps FM
Associate: Jan Smith
Date: 31 March 2010
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