Judd & Judd
[2008] FMCAfam 929
•24 October 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| JUDD & JUDD | [2008] FMCAfam 929 |
| FAMILY LAW – Property – difference in two main assets being immediate capital asset (real property) vs significant and growing financial asset (superannuation) – alleged “agreement” to transfer property to Wife – “just and equitable” order. |
| Family Law Act 1975, ss.75 (2), 79, 79 (2), (4)(a) – (g) |
| In the Marriage of Hickey (2003) 30 Fam LR 355 Judd & Judd [2006] Fam CA 618 Moreton & Moreton [2006] FMCAfam 449 Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar The Diocesan Bishop of The Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42 (4 September 2008) Mallet v Mallet (1984) 156 CLR 605 Noetel and Quealey (2005) FLC ¶93-230 AJO & GRO (2005) 33 Fam LR 134; FLC ¶93-218 Russell v Russell (1999) FLC ¶92-877 DW & GT (2005) 33 Fam LR 177 |
| Applicant: | MS JUDD |
| Respondent: | MR JUDD |
| File Number: | CAC 458 of 2007 |
| Judgment of: | Neville FM |
| Hearing dates: | 11 & 17 March, 26 May 2008 |
| Date of Last Submission: | 10 June 2008 |
| Delivered at: | Canberra |
| Delivered on: | 24 October 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr Arthur |
| Solicitors for the Applicant: | Baker Deane and Nutt (Queanbeyan) |
| Counsel for the Respondent: | Mr Kelly |
| Solicitors for the Respondent: | Jennifer Blundell & Associates (Newcastle) |
ORDERS
Within 28 days of the making of these Orders the Husband do all acts and sign all documents as necessary to transfer to the Wife, his interest in the unit owned as joint tenants by the parties being the property comprised in Certificate of Title Folio Identifier [3] situated and known as Property E, Western Australia (the “property”).
Within 28 days of the making of these Orders the Husband do all acts and sign all documents necessary to discharge the present mortgage to the Commonwealth Bank in respect of the property known as Property E, Western Australia and the Wife indemnify the Husband in respect of any mortgage on the property.
Within 28 days of the making of these Orders the Wife do all acts and sign all documents as necessary to transfer to the Husband, her interest in the Telstra shares held in joint names by the parties.
Within 45 days of the making of these Orders, the Wife is to pay the Husband the sum of $20,000.
(a)In the event that the Wife is unable to raise the funds above to pay the Husband and chooses to source the amount from her superannuation to transfer to the Husband, liberty is granted to approach the Court to seek consequential orders to this effect.
Within 28 days of the making of these Orders the Husband do all acts and sign all documents as necessary to transfer to the Wife, the 1996 Suzuki GSX 250cc motorbike.
Subject to the above each party shall otherwise retain any motor vehicles, chattels, bank accounts, personal property and superannuation in their possession or control.
If either party refuses or neglects to sign within 14 days of a written request to do so any documents necessary to effect the terms of these orders the Registrar of the Family Court of Australia at Canberra is hereby appointed pursuant to the provisions of section 106A of the Family Law Act1975 to execute such documents on behalf of such party.
Each party pay their own costs.
IT IS NOTED that publication of this judgment under the pseudonym Judd & Judd is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT CANBERRA |
CAC 458 of 2007
| MS JUDD |
Applicant
And
| MR JUDD |
Respondent
REASONS FOR JUDGMENT
Introduction & Procedural History
In a recent [non-family law] case, the High Court described a particular piece of litigation as “the parties' fascinated obsession with the minutiae of their innumerable litigious battles.”[1] It aptly describes this property case.[2] It was a needlessly protracted piece of litigation. The reasons for this, in part, obviously rest with the parties themselves who have been involved in legal contests for quite a number of years.
[1] Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar The Diocesan Bishop of The Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42 (4 September 2008) at [9].
[2] Proceedings involving the children have been just as protracted but were finally settled prior to the trial of the property matters.
For example, Stevenson J of the Family Court, sitting in Newcastle, delivered judgment on 28th June 2006 in relation to the two children of the relationship.[3] But her Honour’s judgment did not prevent the parties filing yet another application in this Court involving both children and property matters.
[3] Judd & Judd [2006] FamCA 618
Perhaps most curiously, after years of litigation, Mr Judd changed solicitors a number of months after the final hearing before me concluded. Why he would do so has not been, and need not be, explained.
In the course of the hearing I referred on numerous occasions to the “glacial speed” with which cross-examination of Ms Judd proceeded, the needless repetition of questions put to her, and that her cross-examination was like “teeth-pulling.” In answer to my on-going pleas, Mr Judd's Counsel even commented at one point: “I know the strangeness of what I am doing.”[4] Alas, it was not immediately apparent, at least to me, that this was so.[5]
[4] Transcript (17th March 2008) p.85.
[5] In his written submissions, Counsel for Mr Judd said: “Despite the parties having children’s proceedings on foot in the Family Court at Newcastle from November 2004 until June 2006 and both parties being legally represented throughout this time, the wife did not tender any documents evidencing confirmation of any alleged agreement [in relation to the transfer of the Property E unit].” Again, it is not immediately apparent how or why someone would tender documents in relation to property in children’s proceedings.
Another obvious cause for the slowness of the trial was the somewhat regular objection by Ms Judd directly, rather than by her Counsel, to questions and other things in the course of her cross-examination. It appeared that Counsel for Mr Judd had, for quite a long time, practised as a solicitor in Newcastle and in that capacity had acted for Mr Judd. In the course of acting for her former husband, [now] Counsel obviously had had regular dealings with Ms Judd. To put it another way: there was obviously quite some history, and a pained one at that, between Ms Judd and Counsel for Mr Judd, formerly his solicitor. Ms Judd clearly brought that history with her to the hearing and obviously continued to cause her chagrin and hindered, from time to time, her ability to answer questions simply and directly.
In any event, whatever of the travails of the trial, but for one issue relating to `alleged fraud’ concerning documents and a home unit in Property E in Western Australia, the issues in dispute were relatively modest and the asset pool similar. Counsel for Ms Judd put it simply and not inaccurately at the conclusion of his oral submissions: “realistically, we’re talking about a townhouse and some superannuation and Telstra shares.”[6] In my view, the various contributions claimed by the parties might similarly be regarded as relatively straight-forward.
[6] Transcript (26th May 2008) p.40. He had put a not dissimilar proposition on the first day of the trial: “… realistically in relation to the property the ambit of the dispute is who gets the Property E … townhouse, and how much of the husband’s superannuation the wife gets, that really is it in a nutshell.” Transcript (11th March 2008) p.18.
I proceed in four stages: (a) I set out the respective orders sought by the parties, (b) the legal principles to be applied in property proceedings, (c) the evidence of the parties (in this section I will also deal with the contested issues regarding the alleged `documentary fraud’ in relation to the Property E home unit), and (d) the application of the “four steps” previously canvassed in section (b) “legal principles.”
A. Orders Sought
An examination of the respective `Orders Sought’ by each of the parties suggests that there is not as great a divergence between them as the contest at the hearing indicated. The orders sought by each party are as follows.
Orders sought by the applicant Wife:
a)The Husband transfer to the Wife his interest in the unit identified in Certificate of Title Folio Identifier [3] situate and known as Property E, Western Australia.
b)The Husband sign any documents necessary to discharge the present mortgage to the Commonwealth Bank in respect of the property known as Property E, Western Australia and the Wife indemnify the husband in respect of any mortgage on the property.
c)The 1000 Telstra shares owned by the parties be divided equally between the Husband and the Wife.
d)The Husband's MSBS superannuation be split with a base amount to the Wife in the sum of $60,000.
e)Otherwise, each party retain any motor vehicles, chattels, bank accounts, personal property and superannuation in their possession or control.
Orders sought by the respondent Husband:
a)That within 28 days of the making of these Orders the Husband do all acts and sign all documents as necessary to transfer to the Wife, his interest in the unit owned as joint tenants by the parties being the property comprised in Certificate of Title Folio Identifier [3] situate and known as Property E, Western Australia (the “property”).
b)That within 28 days of the making of these Orders the Husband do all acts and sign all documents as necessary to transfer to the Wife, his interest in the Telstra shares held in joint names by the parties.
c)That within 28 days of the making of these Orders the Husband do all acts and sign all documents as necessary to transfer to the Wife, the 1996 Suzuki GSX 250cc motorbike.
d)THAT contemporaneously with the aforesaid transfers:
i)The Wife pay to the Husband the sum of EIGHTY THOUSAND DOLLARS ($80,000.00); and
ii)The Wife do all things necessary to cause the discharge of the Husband’s liability under the mortgage on the title to the aforesaid property in favour of the Commonwealth Bank of Australia loan account no. [6].
e)That subject to the above each party shall be solely entitled, to the exclusion of the other, all property and chattels of whatsoever nature and kind, in the possession of such party as at the date of these Orders, and that for such purposes bank accounts are deemed to be in the possession of the person whose name appears on the bank record thereof, insurance policies are deemed to be in the possession of the beneficiary thereof and the superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements.
f)That if either party refuses or neglects to sign within 14 days of a written request to do so any documents necessary to effect the terms of these orders the Registrar of the Family Court of Australia at Canberra is hereby appointed pursuant to the provisions of section 106A of the Family Law Act to execute such documents on behalf of such party.
Curiously, in the formal orders sought by Mr Judd, there is no detailed reference to superannuation. Even more curiously, in written submissions, Counsel for Mr Judd stated: “… no superannuation splitting order should be made.” Counsel continued: “The wife should receive an amount of $39,999.73 as her portion of the husband’s superannuation at separation.”[7] Counsel for Mr Judd also submitted: “… the wife should retain all of her own superannuation contributed to MSBS post separation.” Counsel then reasonably submitted that all of Ms Judd’s superannuation accumulated after separation should not form part of the asset pool.[8]
[7] Counsel submitted that he arrived at the figure of Mr Judd’s superannuation to be paid to Ms Judd on the basis of the decision of FM Coker in Moreton & Moreton [2006] FMCAfam 449.
[8] Mr Judd's Counsel’s written submissions were filed on 5th June. Paragraphs 84-95 deal with superannuation.
Counsel, however, then went further in his written submissions (which were entitled “Husbands Submission in relation to Property Issues”, and added a range of orders in relation to superannuation, which are not in the document entitled “Property Orders Sought by the Father.” Nothing of course turns on the difference in style – “Husband” in one submission, and “Father” in the property orders sought.
B. Legal Principles
The Full Court of the Family Court (Nicholson CJ, Ellis & O’Ryan JJ) In the Marriage of Hickey[9] prescribed the process by which courts should proceed in determining applications under s.79 of the Family Law Act1975 (“the Act”). The Full Court said:[10] “First, the court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, the court should identify and assess the contributions of the parties within the meaning of s.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, the court should identify and assess the relevant matters referred to in s.79(4)(d), (e), (f) and (g), (the other factors) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, the court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances.”
[9] (2003) 30 Fam LR 355. See also the briefer statement of the same principles in AJO & GRO (2005) 33 Fam LR 134; FLC ¶93-218, at p.79,619: “(a) To identify and value the net property of the parties (usually at the date of trial); (b) to consider the contributions of the parties within paragraphs (a) – (c) of s.79(4); (c) to consider the s.75(2) factors; and (d) to consider whether the order proposed is just and equitable.”
[10] (2003) 30 Fam LR at p.370 [39].
C. Evidence of the Parties & Factual Background
The parties are similarly aged: wife (34 years), husband (33 years). Their relationship commenced in November 1992 (according to
Ms Judd) or early 1993 (according to Mr Judd). They agree that they were married in January 1995. There are two children of the marriage, aged 15 and 11 years. Pursuant to terms of settlement, both of them now reside with their Father and his partner in [W] and spend defined time with their Mother.
The parties separated in September 2002 (says Mr Judd), or July 2003 (says Ms Judd). They agree that they divorced in June 2007. Whether separation is taken as at the earlier or later date, the duration of the relationship is either 11 or 9 years. In my view, little turns on the difference. It will suffice for these reasons to speak of the length of the marriage as approximately 10 years.
Since September 2002, Mr Judd's Counsel submits that his client had the care of the children for 1 year and 5 months, and Ms Judd had their care for 4 years and 3½ months.
Mr Judd joined the RAAF in 1994. Ms Judd is also a member of the RAAF but did not join until 2002. Not surprisingly, there have been quite a few and varied postings for both parties, during the marriage and post separation. I do not think it is necessary to detail those postings and the effect each of them had on, for example, the care of the children. It is sufficient for these proceedings that appropriate account be taken of the family responsibilities – then and now – that flowed from those postings. The time in which the children were in the care of each parent since separation was noted in the previous paragraph.
In April 2002, the parties purchased a home unit in Property E in Western Australia. There is an agreed value, as at the date of the hearing, for the unit of $335,000. It seems agreed that the amount outstanding under the mortgage at the date of the hearing is $116,742.30, thus leaving equity in the unit of just over $218,000.
There is a dispute over the original purchase price because of
Ms Judd’s evidence that her parents paid a sum additional to the listed price of $153,500. Ms Judd said that the purchase price of the unit was $172,000. According to her evidence, her parents paid a deposit of $10,000 to a Mr W, plus an extra $20,000. The “deposit” of $10,000 was supported by a receipt (Exhibit C). Unfortunately, there was little by way of supporting documentation to substantiate the latter, larger figure.[11]
[11] Much of the discussion about the purchase price of the Property E unit is in Ms Judd’s cross-examination. See Transcript (17th March 2008) pp.72-76. Ms Judd confirmed that the parties took out a mortgage jointly in the sum of $120,000.
Counsel for Mr Judd submitted that the $10,000 was in fact a gift to both parties by Ms Judd’s parents. The evidence of Ms Judd was somewhat equivocal on this, although it could be read as supporting “the gift” submission. Again, in the wider scheme of things, I do not think that it makes all that much difference to the ultimate orders.
I may note here that there was also agreement in relation to the respective superannuation interests. Thus: Mr Judd’s MSBS superannuation amounts to $128,252; Ms Judd has two parcels of superannuation: HESTA $3434 & MSBS $45,481, which total $48,915.
One other matter to note is a small parcel of 1000 Telstra shares, which have a value (as at March 2008) of $4240.[12]
[12] There is a 1996 Suzuki GSX 250cc motorbike in relation to which there was little if any dispute that it should go to Ms Judd. I have no difficulty making such an order. It would seem however that the whereabouts of the bike are unknown. It does seem a little curious to be asked to make an order for something that may or may not still exist. The order sought was not contested.
I should also mention that there was something of a contest also over rent paid on the Property E property. Mr Judd in effect asserted that there was rent from the property that was unaccounted. Ms Judd contended that all rent went into the mortgage and that she was required to make up the shortfall in relation to mortgage payments. In the absence of relevant evidence to substantiate his claim, and in the light of the ultimate submissions adopted by the parties, I incline more readily to accept the position advanced by Ms Judd. And as with a number of other matters, in the result, I do not think that the ultimate result is greatly affected by the divergent contentions in relation to this matter in any event.
As well, Counsel for Mr Judd conceded that the wife paid $19,875 more towards the maintenance of the unit than the husband and that this amount should be repaid to the wife “as an add-back.” Further, Counsel for Mr Judd confirmed that the expenditure on the unit exceeded the income of the unit by $32,893. Accepting that Ms Judd had redrawn $11,650 under the mortgage, the shortfall is $21,243.70, of which Mr Judd paid only $1368.
Property E
The issue here to address is less to do with contributions or “gifts” from Ms Judd’s parents (to which I have already adverted) but what, if anything, turns on an alleged “agreement” by Mr Judd to transfer the property to Ms Judd, and what, if anything, I am to do with the competing claims over documents that are alleged to have been signed by Mr Judd evidencing this transfer? Mr Judd denies that (a) there ever was such an agreement, and (b) he signed any transfer.[13] A third and ultimate question is, in any event, what should be done in relation to the Property E unit and whether any of the matters just referred to in (a) and (b) make any relevant difference to that `ultimate question’? To some degree both Counsel relied on the Full Court decision in DW & GT,[14] but with slightly different emphases, to support their respective positions.
[13] See his cross-examination at Transcript (26th May 2008) pp.19-28.
[14] (2005) 33 Fam LR 177 (Finn, May & O’Reilly JJ).
In large measure I accept the submission that that judgment is relevant to the determination of the issues in dispute in these proceedings. In particular, I note the following statements of principle from the Full Court, which in large measure govern my approach in this matter:
Where parties enter into an agreement concerning property, other than an agreement approved under the provisions of the Act or embodied in consent orders, and one party subsequently commences proceedings under s 79 for an alteration of property interests, the Court must determine the application on its merits having regard to the factors as set out in s 79(4) as they exist at the time of the hearing of the application under s 79 and according to the law in force at that time and not, as to either of those two matters, at the time the agreement was made. There is no threshold test, before embarking upon the s 79 exercise, to determine whether the earlier agreement was just and equitable at the time it was made according to the facts as they then existed and the law then in force. The earlier agreement should be considered (as an indication of what the parties may have regarded as just and equitable at the time), but its provisions only given effect if they coincide with an order which is just and equitable according to s 79 at the time of the hearing.
In determining s 79 applications in circumstances where there has been an earlier agreement, it will often be necessary to consider what was the value of the parties’ assets at the time of the agreement, what their various contributions were to that time, and what might have been an appropriate s 75(2) adjustment. A consideration of these matters might well be necessary in order to provide a background to the parties’ understanding of what was a just and equitable settlement at the time. However, and perhaps more significantly, it would generally be necessary for the Court to acquaint itself with changes in the composition and value of the property pool, so that post-separation contributions can be assessed.[15]
[15] (2005) 33 Fam LR at pp.184–185, [38] – [39].
In the light of these comments, I will deal firstly with the alleged agreement of Mr Judd to transfer the property to his then wife. The evidence is quite clear that Mr Judd contributed only two mortgage payments, which totalled $1368. That contribution was at the request of Ms Judd. About that amount, and that contribution, there is no dispute.
It will also be readily apparent that the unit was purchased shortly before the parties separated. It may reasonably be inferred that the relationship was under strain and, to put it colloquially, `on its last legs.’ Without putting it too highly, in such circumstances it may be inferred that it is more probable than not that while the parties may have intended to purchase the property jointly, as a matter of law, for all practical purposes it was and became Ms Judd’s responsibility. Given that Mr Judd paid only two mortgage instalments, and seemingly did so readily at Ms Judd’s request, certainly in terms of contribution, that side is preponderantly in favour of Ms Judd.
Moreover, Mr Judd’s evidence, which I took to be forthright and truthful, was, in a number of other respects, somewhat surprising. For example, he acknowledged that $10,000 came from Ms Judd’s parents in relation to the purchase price of the Property E home unit.[16] He acknowledged that his signature was on the contract of sale. However, he said that he thought that the balance of the purchase price, that is the amount in excess of the mortgage of $122,000, came from Ms Judd’s bank account.[17] He never checked such details. In any event, this could also suggest a certain disinterest in the unit. That said, his apparently ready contribution of two mortgage payments, well after the parties had separated, could be taken as an interest to preserve an asset of the relationship pending the Court’s determination of the s.79 property application.
[16] In her oral evidence, Ms Judd said that her parents had sworn affidavits, which set out confirmatory evidence about the original purchase of the home unit. Transcript (17th March 2008) p.22. Those affidavits were not provided to the Court in these proceedings.
[17] See transcript (26th May 2008) p.13.
Although I will come back to it, in my view, and in accordance with the decision of the Full Court in DW and GT to which I have referred, the issue of the Property E property is best dealt with on the basis of the respective contributions of the parties and formally considered under s.79(4). This applies also in the light of the contentions regarding the contentious documentation to transfer the property to
Ms Judd. I will consider that aspect now for the sake of completeness.
The disputed circumstances and documents regarding the transfer of the Property E unit may be summarised – and I stress that it is but a summary - this way.
Ms Judd’s position is that in order for the home unit to be transferred to her, following the separation from Mr Judd, [P] Conveyancing was retained to prepare the necessary documentation. She said that she received documents from [P] Conveyancing. She also said that she misplaced the documents, which she received under cover of a letter from [P] Conveyancing dated 11th June 2004. She rediscovered them in a filing cabinet in August 2006. She confirmed that the transfer had on it Mr Judd’s signature.
Ms Judd also said that Mr Judd had refused to sign another transfer, after the original one had been `misplaced’, because, she said that he said that he had already signed it and would not sign another transfer.
She strongly denied that she had (a) forged Mr Judd’s signature, and (b) arranged for the witness, whose signature appears on the document, to sign it in 2004. She said that she did not meet the witness (Mr S) until 2005.[18] Moreover, it was not disputed that at all relevant times between 2003 and 2006, Ms Judd never lived anywhere near Darwin. Indeed, Ms Judd’s signature was witnessed by Mr S in [J] (just outside of Canberra) and, according to Ms Judd, that occurred in September or October 2006. How she could have manufactured, so to speak, either or both Mr Judd’s signature and the Darwin-based witness to it, is very hard to conceive. Such a proposition was put to her by Counsel for
Mr Judd. She denied it strongly.[19]
[18] All of these matters and more were traversed at length in cross-examination. See Transcript (17th March 2008) pp.14-45. Copies of the contested documents are annexed to Ms Judd’s affidavit sworn 13th March 2008. The originals of most of them became exhibits: Exhibits B & C.
[19] Transcript (17th March 2008) pp.21-24. Mr Kelly actually put to Ms Judd that she signed the transfer, that is, forged, Mr Judd’s signature.
I found Ms Judd’s evidence credible. Her account of events, as it were, “fits” and there are few gaps in it. It also “fits” more readily with the evidence of Ms O, from [P] Conveyancing, which I consider shortly. And while Mr Judd’s evidence also is credible, he has no explanation about how a signature that looks very much like his appears on the transfer document.
As I have said, Mr Judd’s evidence was quite credible.[20] He maintained that he still had the original documents that he received from
[P] Conveyancing and that (a) he never signed a transfer of the home unit to Ms Judd and (b) he had the original, unsigned transfer in his file. He acknowledged, however, that the signature on the transfer document looked like his, but maintained that it was not his signature.
[20] I simply note that in the proceedings before Stevenson J in Newcastle, to which I have previously referred, her Honour found that she could accept Ms Judd’s evidence in those proceedings. At [25] of her judgment, Stevenson J said: “It seemed to me that Mr and Mrs Judd had different perceptions of various incidents which had occurred since their separation….” To some degree, I share those same sentiments in these proceedings.
Turning then to the evidence of Ms O, who gave evidence from Property E by telephone, she said that (a) she had a transfer signed by Mr Judd, (b) had no record of a telephone call from him (which he maintained he made to her office) questioning details about the transfer, (c) she recalled that there was a transfer with two signatures on it, and (d) Ms Judd’s Mother had paid the stamp duty on the transfer.[21] Her evidence, as a relatively independent third party although called by Ms Judd, was clear, straight-forward and convincing.
[21] Ms O also provided an affidavit, sworn 12th March 2008.
Ms Judd gave evidence that she did not seek stamp duty advice from [P] Conveyancing. Ms O confirmed that it was not uncommon in family law matters for a party nonetheless to pay stamp duty.
In Ms O’s affidavit she said (par.7): “On 11 May 2004 I sent to
Mr Judd at RAAF Base, [address omitted] Darwin WA 0820 a letter enclosing an Authority to Act, Certificate of Title, Transfer of land, Settlement Statement and State Revenue Department Assessment Form, copies of which are annexed hereto and marked with letter “D”.”
In par.8 of the same affidavit, Ms O said: “On 11 June 2004 we received the original returned Appointment to Act and transfer of Land documents, correctly signed by Mr Judd and independently witnessed. There was no covering letter from Mr Judd copies of the signed Appointment to Act and transfer are annexed hereto and marked with the letter “E.”” The independent signature is from Ms H, a “postal service officer” at [address omitted]. Mr Judd confirmed that this is the post office nearest to his residence, where he was then living, in Darwin.[22]
[22] See Transcript (26th May 2008) pp.19-21.
Having regard to the orders I will make in these proceedings, and having regard to the instruction in DW and GT, I need make no formal findings about the transfer of the Property E property and will simply consider it in the course of the deliberations concerning s.79(4).
Summary of Property
WIFE HUSBAND
AssetsAssets
Car: 9000 Car: 1500
Bank a/c:700 Bank a/c: 1009
Telstra:2400 Telstra: 2400
House contents: 80,000 House contents: 30,000
Super:Super:
HESTA:3424
MSBS: 45,481 MSBS: 128,252
Esperance Unit
Net ½ share 109,000 Net ½ share 109,000
LIABILITIES
Car Loan 7400
Loan (Parents) 25,000 Loan (Parents) 34,000
Legal Fees 35,000
[Mortgage
½ share 58,371 ½ share 58,371]
No valuations or other supporting material was provided in relation to the house contents by either party. Nor, so far as I can see, was there supporting documentation/evidence in relation to (a) the car values or (car) loan, (b) the respective loans from the “parents”, or (c) legal fees for Ms Judd. For all practical purposes, I do not consider that the exclusion of these items, which is the course I propose to take, will significantly impact on the final orders in these proceedings. As well, no submissions were made, by either Counsel, in relation to these items.
D. The Application of the `Four Steps’
The pool of assets, as at the date of the trial, in summary comprised (a) the Property E property (net value $218,000), (b) wife’s superannuation ($49,905), (c) husband’s superannuation ($128,252), and (d) Telstra shares ($4800). Thus the net asset pool is approximately $400,000.
In submissions, Counsel for Ms Judd stated that it was agreed that the value of the husband’s superannuation as at 15th September 2002 was $48,944, and as at 30th June 2003 it was $54,944. He submitted that as at the date of the end of the relationship, in January 2003, the estimated value of the husband’s superannuation was approximately $50,000.[23] In the same place, Mr Arthur submitted that at the end of the relationship the wife’s superannuation was “pretty minimal.”
[23] Transcript (26th May 2008) p.32.
Section 79(4) Factors
I have already noted the extent to which each parent has had responsibility for the care of the children, and that they now reside with Mr Judd in [W]. I accept the submission on behalf of
Mr Judd that in the ordinary scheme of things the youngest child [name omitted] will be with him until she turns 18, which will not be for another six plus years.
It is also agreed that Mr Judd’s financial contribution to the purchase of the Property E property was (a) in `signing on’ for the joint mortgage, and (b) in making two mortgage payments which totalled $1368.00.
It also seemed somewhat readily accepted, although the actual amounts were not formally agreed, that Ms Judd’s parents contributed significantly to the purchase price of that property. The disputes in this regard, as already noted, related to whether $10,000 was a gift to both parties, and whether they had paid additional moneys to secure the property. Even if I accept that that $10,000 was treated as a gift to both parties, a proposition that seems eminently sensible, on any view of the matter it seems to me that Ms Judd’s parents have contributed significantly to either or both the purchase of the property and the stamp duty payable on its transfer.
Otherwise, it is the fact that both parties reside in RAAF accommodation. Their current weekly income is approximately equal; both parties are of equivalent rank in the RAAF.
Section 75(2) Factors
Both parties are of a similar, still relatively young age – in their early thirties. There are no health issues. Mr Judd has re-partnered; Ms Judd has not. Mr Judd’s partner is also in the RAAF, and at a similar rank as the parties to these proceedings. Thus his household enjoys two-incomes.
I have already noted on a number of occasions that pursuant to terms of settlement filed in these proceedings the children of the marriage now live with Mr Judd and his partner in [W]. Whereas Mr Judd once paid child-support, presumably there will be some assessment, now or in the near future, of Ms Judd in relation to the same matter. Ms Judd was, for all practical purposes (and with the exception of the period between 2002 and 2003) until April this year the primary carer of the children.
I accept that Ms Judd moved with Mr Judd when he received various postings during the time of the marriage. That necessarily led to her, at best, being able to obtain various part-time employment positions. This necessarily affected her capacity to accumulate superannuation at a time when Mr Judd was regularly doing so with his full-time employment.
Summary & Just & Equitable Considerations
Both Counsel essentially agreed that there were relatively few issues to be determined in these proceedings. Essentially, I agree with them. By way of summary, in determining what is the just and equitable order, the following are, in my view, the principal considerations.
First, the modest duration of the relationship – approximately 10 years.
Secondly, Ms Judd was the primary carer of the children, by and large for the duration of the marriage as well as up until April of this year, when they began to reside with their Father.
Thirdly, Mr Judd will have the care of the children at least until their majority, with the youngest child being just on twelve years of age. In this regard, Ms Judd will have responsibility for child support payment, just as he did when the children were living with their Mother.
Fourthly, because of her maternal responsibilities and consequential limited employment opportunities, Ms Judd was unable to accrue much superannuation until after the end of the relationship and she joined the RAAF. At the same time that she was attending to maternal responsibilities Mr Judd was accruing significant superannuation.
Fifthly, the parties purchased a unit in Property E. Its current value is significantly more than the purchase price. Although purchased in both names, it is conceded that the financial contribution from Mr Judd to it was very limited. Apart from the mortgage, the purchase price came from Ms Judd and her parents. In my view, the contention that $10,000 was a “gift” to both parties, in the larger scheme of the application is neither here nor there. And whether there was an agreement – informal or otherwise – to transfer the unit by Mr Judd to Ms Judd, in my view, as I have already mentioned, is more properly dealt with in the context of the overall “just and equitable” order rather than as a discrete issue.[24] Also in relation to the Property E unit, if it is ordered that it be transferred to Ms Judd, and that Mr Judd be released from any liability or responsibility for any sums outstanding in relation to it, Ms Judd will assume those responsibilities and liabilities. As indicated earlier in these reasons, as at the date of the hearing, the mortgage owing is $116,742.
[24] In this regard, I certainly agree with Counsel for Mr Judd that `the Property E-property-document’ issue took on a life of its own at the trial and occupied a disproportionate time of the hearing. See, for example, Transcript (26th May 2008) p.43.
Sixthly, both parties are members of the RAAF. They are of similar rank and earn almost identical income. Ms Judd’s is a single income family (she has not re-partnered). Mr Judd’s is a two income family (he has re-partnered, and his fiancé is also in the RAAF).
As was stated earlier in these reasons, quoting from submissions, “realistically, we’re talking about a townhouse and some superannuation and Telstra shares.” The shares are modest in volume and equally so in value.
Conclusion
In Russell v Russell, the Full Court of the Family Court said:
… under s.79(2) of the Act, the Court is required to be satisfied that it is the order to be made which is just and equitable, not just the underlying percentage division of the net value of the parties’ assets. Indeed we take the opportunity to emphasise that in what his Honour has termed “the fourth stage”, that is the consideration of whether the result is just and equitable, it is the justice and equity of the actual orders not of the percentage distribution which must be considered.[25]
[25] Russell v Russell (1999) FLC ¶92-877 at p.86,438. Emphasis in original. Comments to similar effect can be found also in the more recent decision of the Full Court in Noetel and Quealey (2005) FLC ¶93-230 at p.79,805.
Were I to venture a comment in percentage terms, and without putting a precise figure on it, I am of the view that an adjustment under s.75(2) would favour Ms Judd.
The High Court emphasised some time ago the importance of judicial discretion, the corollary of which is the Court not being bound by any formulaic approach. Gibbs CJ said:
The Act does not indicate the relative weight that should be given to different circumstances, or how a conflict between opposing considerations should be resolved – those things are left to the court’s discretion, which must, of course, be exercised judicially.
Decisions in particular cases … can … do no more than provide a guide; they cannot put fetters on the discretionary power which the Parliament has left largely unfettered. It is necessary for the court, in each case, after having had regard to the matters which the Act requires it to consider, to do what is just and equitable in all the circumstances of the particular case.[26]
[26] Mallet v Mallet (1984) 156 CLR 605 at pp.608 & 609. See also similar comments by Wilson J in the same case, at p.636, especially regarding the Court’s assessment of the respective contributions of the parties, with “equality” often (but not always) being but a useful starting point.
Also in Mallet v Mallet, Wilson J said that the object of s.79 “is not to equalize the financial strengths of the parties. It is to empower the court … to effect a redistribution of the property of the parties if it be just and equitable to do so having regard, inter alia, to the respective contributions of the parties.”[27] I emphasise his Honour’s point about not seeking to achieve some form of financial equality, at the same time having due regard to the requirements of the Act.
[27] Ibid., p.638.
A particular difficulty in this matter is the nature of the main assets involved – superannuation and the home unit. As well, the parties have identical remuneration but different superannuation entitlements for reasons already explained. In Mr Judd’s case, he has the greater amount of superannuation. To speak generally, this is a significant and growing financial resource but which he will not be able to access for many years. On the other hand, the Property E property is an immediate capital asset with a significant mortgage. Its value is immediately ascertainable and, if necessary, it could be sold and the proceeds immediately made available. As well, Ms Judd will have a child support responsibility/liability at an amount to be determined. All things being equal, that will be for at least seven or so years.
I will order that Ms Judd keep the Property E property, together with its sizeable mortgage. However, absent any payment from her to Mr Judd, he will not have immediate access to a realisable asset, and certainly not of the kind or size available to Ms Judd. Plus, he now has the care and responsibility of the children for some years to come, with
Ms Judd’s contribution and responsibility being in the form of child support. In such circumstances, in my view it is just and equitable that Ms Judd pay Mr Judd $20,000, as well as transferring to him all of the Telstra shares. Apart from anything else, Ms Judd has the option, should she wish to take it, of selling the Property E property. If she did so, she would have a significant cash fund available to her that she could use to more than equalise her superannuation pool to that which currently stands to Mr Judd’s credit.
I will leave it to Ms Judd as to how she makes the designated sum of $20,000 available to Mr Judd. She may of course wish to take it from her currently modest superannuation fund. If so I am more than content to make a splitting order for that to occur. Indeed, as a precaution, the orders will include provision for a splitting order in the event that she wishes to draw funds from that source for the payment to Mr Judd.
Taking into account all of the above, not least that percentage appraisals can be somewhat misleading, in my view a just and equitable order in these proceedings is as follows:
a)Ms Judd keep the Property E unit and release Mr Judd from any responsibility or liability in relation to it. [She will of course have to assume full responsibility for the mortgage over the unit.]
b)Ms Judd is to pay Mr Judd $20,000.
c)
Otherwise, both parties should keep their respective superannuation entitlements intact, subject to the option that
Ms Judd may access her superannuation, pursuant to a splitting order, so that she may make the payment to Mr Judd referred to in the previous paragraph.
d)Ms Judd should transfer her interest in the parcel of Telstra shares to Mr Judd.
e)Otherwise, and in the absence of written agreement regarding any particular item, all goods and chattels currently in a particular person’s possession should remain as is.
f)The [mystery] Suzuki motor cycle referred to in these reasons, once found, should formally be transferred to Ms Judd.
I certify that the preceding sixty-eight (68) paragraphs are a true copy of the reasons for judgment of Neville FM
Associate: R. Davidson
Date: 24 October 2008
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