Kahlon & Ryman
[2021] FedCFamC2F 417
•11 November 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Kahlon & Ryman [2021] FedCFamC2F 417
File number(s): DGC 3788 of 2019 Judgment of: JUDGE BURCHARDT Date of judgment: 11 November 2021 Catchwords: FAMILY LAW - Property dispute after 10 year marriage – mother having primary care of 12 and 10 year old autistic children – mother unlikely to gain employment for many years- father contributing deposit for matrimonial home from superannuation funds earned in the USA - slightly greater overall contributions by the father – father seeking payment of debts if the relationship and mother opposing – clearly appropriate to pay out debts on sale of matrimonial home – also clearly appropriate that there be a superannuation split – net proceeds of home to be divided 70/30 in favour of mother Legislation: Family Law Act 1975 (Cth) Cases cited: Dickons & Dickons [2012] FamCAFC 154
Mallet v Mallet [1984] HCA 21
Stanford v Stanford [2012] HCA 52
Division: Division 2 Family Law Number of paragraphs: 28 Date of last submission/s: 11 November 2021 Date of hearing: 10-11 November 2021 Place: Dandenong Solicitor for the Applicant: Pentana Stanton Lawyers Counsel for the Applicant: Ms Jardine Solicitor for the Respondent: Vernon Da Gama and Associates Counsel for the Respondent Ms Teicher ORDERS
DGC3788 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR KAHLON
ApplicantAND: MS RYMAN
Respondent
ORDER MADE BY:
JUDGE BURCHARDT
DATE OF ORDER:
11 NOVEMBER 2021
THE COURT ORDERS THAT:
Sale of the Matrimonial Home
1.Forthwith the parties shall do all acts and things and sign all necessary documents to effect the sale (“the sale”) of the property situate at B Street, Suburb C (“the property”) in the State of Victoria.
2.For the purpose of the sale, the following shall apply:
2.1.Within 3 days of these orders, the Applicant shall provide to the Respondent a list of three proposed Real Estate Agents (“the list of Agents”), and should the Applicant fail to provide a list of three proposed agents within 3 days, the Respondent shall nominate an agent;
2.2.Within 3 days of receiving the list of Agents, Respondent shall nominate one of the proposed Real Estate Agents to act as Agent for the sale of the property (“the Real Estate Agent”), and should the Respondent fail to nominate an Agent within 3 days, the Applicant shall nominate an Agent.
2.3.Within 14 days of these orders the parties shall do all things and sign all documents to authorize the Real Estate Agent to list the property for sale.
2.4.The reserve price be $730,000.
2.5.The manner of sale (private sale or auction) shall be in accordance with the recommendation of the Real Estate Agent, with the house to be listed for Auction if it has not sold within 30 days of being listed for sale, and the parties shall accept the highest bid at auction that is equal to or greater than the reserve price, except by mutual agreement in writing.
2.6.The parties will attend the auction with their respective solicitors available by telephone and will negotiate with the highest bidder in the event that the reserve price is not reached;
2.7.Conveyancing for the sale shall be done jointly by conveyancers appointed by each of the parties;
2.8.Settlement shall occur within 60 days of sale unless otherwise agreed in writing by the parties;
2.9.The proceeds of sale shall be applied as follows:
2.9.1.Firstly, to pay all costs, commissions and expenses of the sale;
2.9.2.Secondly, to discharge the mortgage and any other encumbrance secured against the B Street, Suburb C property, noting the following:
a)The Applicant will be solely responsible for all payments that are required to be made to Victoria Legal Aid to discharge the Caveat lodged by Victoria Legal Aid against the property inclusive of Caveat number …. The amount of these payments shall be deducted from the Applicant’s share of the balance once it is divided in accordance with clause 2.9.4 below and paid to the Respondent; and
b)The Respondent to be solely responsible for all payments that required to be made to AAB Lawyers Pty Ltd to discharge the Caveat lodged by AAB Lawyers Pty Ltd against the property being Caveat number …. The amount of these payments shall be deducted from the Respondent’s share of the balance once it is divided in accordance with clause 2.9.4 below, and paid to the Applicant.
2.9.3.Thirdly, to discharge the following debts of the relationship:
2.9.3.1.D Finance Loan for the Motor Vehicle 1, Acc no …00;
2.9.3.2.Bank E Account, Acc BSB … Acc No …87;
2.9.3.3.Westpac Credit Card Acc No …37 – (debt currently factored to Credit Corp Services Limited);
2.9.3.4.Bank E Credit Card, Acc no ..02, (debt currently factored to Credit Corp Services Limited);
2.9.3.5.American Express Credit Card, Acc no …07;
2.9.3.6.Latitude Finance Go Credit Card,2746 Acc no …86, (debt currently factored debt to Credit Corp Services Limited);
2.9.3.7.Red Energy Outstanding Account ref …43; and
2.9.3.8.Internal Revenue Service taxation liability, for Social Security No …16
2.9.4.Finally, the balance to be divided between the parties as follows:
2.9.4.1.30% to the Applicant through his Solicitors; and
2.9.4.2.70% to the Respondent through her Solicitors.
Vehicles and Other Property
3.The Applicant otherwise retain:
3.1.The Motor Vehicle 1 motor vehicle; and
3.2.The balance of any bank accounts held in his sole name.
3.3.Any other good and chattels in his possession.
4.The Respondent otherwise retain:
4.1.The Motor Vehicle 2; and
4.2.The balance of any bank accounts held in her sole name;
4.3.Any other goods and chattels in her possession.
Superannuation
5.That the solicitor for the Applicant forthwith seek procedural fairness from Super Fund F in the following terms:
5.1.In accordance with section 90XT(1)(a) of the Family Law Act 1975 (Cth), whenever a splittable payment becomes payable in respect of the Applicant’s interest (member number:…21) in the Super Fund F (“the superannuation fund”), the Respondent is entitled to be paid an amount calculated in accordance with Part 6 of the Family Law Superannuation Regulation 2001 (Cth), using the base amount of $26,300.95 and there be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for these orders;
5.2.That having been accorded procedural fairness in relation to the making of this order, this paragraph binds the trustee of the superannuation fund; and
5.3.The operative time for this paragraph is four (4) business days after the date of service of an original certified copy of the orders on the trustee of the superannuation fund.
6.The Applicant is hereby restrained from accessing or drawing down on his superannuation entitlements pending a superannuation split with the Respondent pursuant to Order 5 herein.
7.Each party shall do all acts and things reasonably required by the other including the signing or execution of all necessary documents to give effect to these orders within fourteen (14) days of receipt of a written request to do so.
8.If either party refuses or neglects to sign, execute or return a document within fourteen (14) days of receipt of a written request to do so, then the Registrar of the Dandenong Registry of the Federal Circuit Court is hereby appointed under section 106A of the Family Law Act 1975 (Cth) to sign or execute such document on behalf of that party upon lodgment of such document and the filing of an affidavit of a lawyer on behalf of the requesting party (or the requesting party themselves if self-represented) as to the said neglect or refusal.
9.That unless otherwise specified in these orders, except for the purpose of enforcing payment of any money due under these or subsequent orders:
9.1.Each party shall be solely entitled to the exclusion of the other to all property (including choses in action) in the possession of such party as at this date;
9.2.Money standing to the credit of either party in any bank, building society or investment account shall be the property of the account holder;
9.3.Each party foregoes any claim they may have to any superannuation benefits belonging to or earned by the other party;
9.4.All insurance policies shall be the sole property of the owner named thereunder;
9.5.Each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled to pursuant to these orders;
9.6.Each party shall be solely liable for and indemnify the other in respect of individual debts;
9.7.Each party is hereby restrained form further encumbering the B Street, Suburb C property save and except for in compliance with these orders; and
9.8.Any joint tenancy of the parties in any property, real or personal, is hereby severed.
NOTATION
A.Procedural fairness having been confirmed pursuant to order 5 herein, the parties shall forthwith forward a joint minute of orders by consent to effect a superannuation split according to His Honour’s Judgment this day.
B.Should Super Fund F require orders to effect a superannuation split to be made in particular terms, the parties will amend the orders according to those requirements to effect a superannuation split according to His Honour’s judgment this day.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Kahlon & Ryman has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BURCHARDT
Could I say it by way of starting, that this was a 10 or so year relationship between the de facto husband and wife. It commenced in the context of parenting disputes and so ordinarily one might refer to them as mother and father, as the case might be. But I know from experience that in property cases the mind subconsciously invariably moves to the phraseology of husband and wife, whether the parties were married or not. So if I use those phrases, please do not understand me to seek in any way to misrepresent the circumstances in which you were. It is just, that is where one always ends up in property matters.
The way I am going to deal with this matter is to set out some of the facts which are not really disputed, from the parties’ affidavit materials. I will then move to the question of consideration of the High Court’s indicated approach in Stanford v Stanford [2012] HCA 52. I will then deal with what seemed to me to be the three issues between the parties. First, whether debts of the parties should be included in the pool and paid out from the sale of the matrimonial home; second, whether superannuation should be the subject of a splitting order; and third, what the split of the remains of the parties’ property should be, most particularly the net proceeds of the matrimonial home, noting that the husband’s position is 67.5 % ;32.5 % in the wife’s favour, that the debt is paid and no super split. So the wife’s current position is an 80% division in her favour, with the debts to stand where they are, and a superannuation split.
From the parties’ materials it is apparent that the father was born in 1969 and the mother in 1978. They commenced cohabitation in the United States in 2008. The husband has said separation was in April 2018 under one roof, with final separation in July 2018. Whereas the wife says separation was in August 2017. I note, however, in passing that she told the family report writer that it was a 10 year relationship which would tend to suggest separation in 2018.
Their children, X born in 2009 and Y born in 2011 followed. The parties lived in America until 2013 when they returned to Australia. I note the husband has said he had lived there for 14 years at that time, so he must have gone there in 1999. They lived with the parental grandparents for the first couple of years or thereabouts, but little has been made of that. And I note that that wife was critical of the quality of the accommodation provided in any event. An intervention order taken out on the 13th of June 2019 for two years appears to have expired.
The wife has a teenage daughter who lives in the United States, and a son G who lives in Australia. And I note that, most unfortunately, X and Y were diagnosed with autism in 2014. That of course, for Y, was a relatively early diagnosis and only goes to support the proposition that both these children, unfortunately, face considerable challenges. That conclusion is only reinforced by the fact that they are in receipt of NDIS funding. It does not, of course, give either of the parents any actual money to spend, but does denote that they are facing considerable difficulties.
In July 2015 the parties bought the matrimonial home in B Street, Suburb C. It seems to be relatively uncontroversial that $30,000 of the deposit came from what is described as the husband’s 401K account in America, which appears to have some analogy to what we would describe as superannuation. I note that the withdrawal of that sum has triggered a tax liability of some USD12,000. I note also that, as is said by the husband that there were $10,000 of savings he had saved. It appears of course that this had been engendered during the relationship.
The husband had been in employment in America, as had the wife from time to time; his earnings being somewhat greater. I note that in Australia he obtained well-paid employment but was made redundant in October 2015 and was unemployed for seven months. Between May 2016 and May 2017 he again obtained good employment but was then made redundant again. And in April 2018 he had lost a further job through redundancy. These would have all been salaries in the six figures. The wife has not worked since coming to Australia. And although the husband is critical of her for that, I point out that a person coping with the demands of two children facing the sort of difficulties these children obviously do face, cannot, in my view, properly be criticised for that.
I further note that both parties were assessed by Dr H albeit very much in the context of their next parenting dispute. Dr H, who is a very experienced practitioner, assessed that the husband had an adjustment disorder with depressed mood and anxiety, and noted that psychological treatment would be necessary on an ongoing basis. He described the mother as having a dysthymic disorder with some borderline personality traits. He did not confirm an earlier alleged diagnosis of ADHD on the mother’s part, but if I understand the matter correctly it is a fact that the mother has high functioning autism. Against that, in my view, relatively uncontroversial fact background, I will say a few very brief words about the witnesses.
In my view, both were good witnesses. They were direct, generally, in their answers. Like many witnesses they, to an extent, wanted to answer the question they wished had been put rather than the one that was actually put. But that was not excessive, and that is very understandable under the pressure of cross-examination. The wife’s credit has not been attacked, and nor could it be. The husband’s credit has been attacked, but I do not accept the criticisms. His evidence about the Centrelink payments was, in my view, both given with conviction and entirely plausible. It may indeed be the case that he is not entitled to the carer’s allowance that he has been receiving, but I fully accept he has done all that he has been required to do to inform Centrelink of his circumstances.
And I point out that if it turns out that he has been mistaken and that there is a shortfall to be repaid, this would only, in the context of this case, stand to his favour because it would be an ongoing liability he would have to meet in the future. However, there is no evidence that convinces me of that one way or the other at the moment. All I do say is, I have no hesitation in finding that the husband has nothing culpable or wrong. Similarly, although he has a LinkedIn if a post is slightly exaggerated or at least potentially somewhat misleading, in my view that is a matter of little importance. He is trying to get a job, like many a person before and since, he has put in as good a gloss on himself as he can.
That then brings us to the question of the debts. At paragraph 111 of the husband’s trial affidavit he details the debts at the end of the relationship. These assertions were not challenged and are clearly correct when one looks at the annexures to the affidavit. In evidence, the wife said that the majority of the matters the subject of debt were – and I think I have a note of it “spent for his own gain”. I note that this was not put in terms, or even generally, to the husband in cross-examination. There is no convincing evidence in the wife’s affidavits of wastage on the husband’s part. The closest I have been able to find is paragraph 62 of her trial affidavit where she complains that, when given a redundancy payment, he bought a coffee machine, some expensive reading glasses and a laser printer for $400. These are not, in the scheme of things, anything like sufficient to make out the overarching criticism. And I point out that counsel for the wife was no doubt well aware of the general maxim in these matters, that you take in the good in the relationship with the bad, and any omission to put to those matters was doubtless a sensible forensic decision. The debts are plainly debts of the relationship and should be paid out as is from the proceeds of the sale of the matrimonial home. The amounts each party has paid off is a matter I will turn to when considering the questions of contributions.
So far as the inclusion or otherwise of superannuation is concerned, the husband was in the United States from 1999 to 2013. Since his return to Australia he has generally earned what one would describe as good money. If one looks at his salary and the amount of times that superannuation has had to accrue between 2013 and now, it is immediately apparent that all, or if not all almost certainly almost all, of the approximately $50,000 now has been amassed during that time. There are certainly no figures to suggest otherwise.
In these circumstances, the superannuation having been clearly engendered during the current relationship, it is clear that superannuation should be considered part of the pool. Although it puts the matter shortly, I accept the wife’s proposal there should be a superannuation split. And I note that the one view of the matter that might be said to be slightly generous, perhaps, to the husband, although of course he is much older and has less time to generate superannuation. That brings us to the next question, which is the division itself.
I think I may have failed, through the haste with which one prepares these matters, not to deal, as I should have dealt, with the question of Stanford v Stanford which is, of course, an antecedent consideration. In that case, the High Court said that the way this Court should proceed is to determine the parties’ legal and equitable interests and determine whether there should be a property adjustment as just and equitable between them. However, in this case, as in so many cases, and as was indeed envisaged in Stanford v Stanford itself, the basis upon which the parties organised their finances as a couple has radically altered since separation, and each of them seeks a property adjustment. It is plain that it is just and equitable that there should be one.
To move then to the question of the parties’ legal and equitable interests or what might otherwise be described as the pool. There is the matrimonial home which, as both parties agreed, should be sold; neither has the funds to pay the other out. It has a valuation of $730,000 some little time ago and is likely to sell, one would hope for the parties, for somewhat more. But it will sell for what it sells for. The mortgage is approximately $372,000 at the present time. Each of the parties have a car but, in my view, they are of no meaningful value. If they were to be sold, each of these parties would simply need another one. And I note that that of the husband is still encumbered to some degree in any event. It is not appropriate to allot a meaningful value in the pool at all.
So far, bank accounts are not pressed by either side, and appear to be trivial in any event. The only other two aspects of the parties’ possession that have been raised, the first of all the furniture and chattels, household chattels. The majority of those plainly are with the mother, but she has the children whom, I should say in passing of course, after pursuant to orders made by consent yesterday, are going to be living with the mother on an eleven/three basis albeit with school holidays shared. She needs those chattels, and further, in my view, unless there is a valuation these sort of materials are virtually valueless on resale. If sold, they would need to be replaced. There is no point in including any value for them. So far as the tools are concerned, there is no evidence as to their value. The husband has made a guestimate, I think, of $5000. The odd whipper snipper and electric drill are really not a sufficient moment, in my view, to be worthy of further attention. The pool is effectively, therefore: the home, the mortgage, and the debts, and of course the superannuation as I have indicated.
That brings us to the question of contribution. Both parties worked in the United States, and the husband has worked here. The wife has worked somewhat less but has been the homemaker. The husband made good money but was unlucky, albeit that he was sacked – unlucky to be made redundant, I should say – but was dismissed in his last job which will, as he points out, represent difficulty. The husband has paid more of the debt since separation but obviously had more income for at least part of the time. He paid off $22,000 off his car and she has paid of $16,451 off her car. The credit card with Citibank being item number 5 on page 19 of the husband’s affidavit, it is clear the husband negotiated the original debt of some $15,000 down somewhat, and paid nine or ten thousand dollars out to pay that off. Otherwise, the reductions are not really very significant. It’s important to remember that the husband is not entitled to a dollar for dollar accounting in relation to these matters, in any event. Countervailingly, there’s the question of the mortgage since separation. The wife says that separation was in August 2017, and she started paying mortgage at that time. The husband concedes she started to pay the mortgage, but says it was in April 2018 or thereabouts. I repeat, the wife told the family report writer it was a 10-year relationship, which tends to support the suggestion of separation as more likely to have been that asserted by the husband.
Exhibit R4 is the document which I am comfortably persuaded was actually filled out by the wife, and then signed rather insouciantly. The important of that matter, however, is at paragraph 28 of the document. This document purports to be written – even though it was not – by the husband, and paragraph 28, under “give details why you do not pay for your accommodation” it says, “I pay the mortgage”; “I,” at that time, being the husband. That tends, once again, to suggest to me that he paid, as he said he did, until about April 2018. But on any view of the matter, since then, or about then, the wife has paid the mortgage. A total, I think, was suggested of approximately $79,000 over the relevant period, which I would suppose was going back to August 2017, and may be therefore slightly inflated.
But if it is from April 2018 – some three and a half years – it would amount to some $22,500-odd per annum, or $434 per week. The wife’s financial statement makes an estimate payable each week to the Bank E of $324, and that is exactly consistent with exhibit A11. However, I repeat again, this is not an accounting exercise. In the well known case of Dickons & Dickons [2012] FamCAFC 154, the Full Court of the Family Court relevantly said, at [23] and [24], and I quote, first:
There is in our view little to be gained, and much to be said against, approaching the task of assessing contributions by attaching percentages to components of it. (The same, it might be said, applies to attributing a percentage to each of the relevant 75(2) factors).
Continuing on in the next paragraph, 24, the Full Court said – and this is a matter of more general guidance:
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.
In my view, what one can take from all the materials is that the wife has paid the mortgage at least since mid-2018, but by the same token, has not had to pay rent. It should be remembered that there is no presumption of equality as a starting point. It is a matter of calibrating all the relevant factors. It is also important to remember, as the High Court pointed out in the case of Mallet v Mallet [1984] HCA 21, that the wife’s contribution as a homemaker must not be approached in a tokenistic way. In my view, both of these parties did their best, both before and after separation. One would holistically assess that as being very close to equal. There is, however, one matter which also requires consideration in this holistic exercise.
The parties were only able to buy the house in 2015 because the husband had superannuation, as I will describe it, in the United States. This must have been made – at least, as to the majority, one would assume – earned before the relationship, because he was there from 1999 till 2008, whereas the relationship only obtained from 2008 to 2013 in the United States. But, equally, it cannot be doubted that some of this superannuation was earned during the relationship. It is not possible to say how much. I note, as I have said earlier, that the husband said he had contributed savings of $10,000, but the wife clearly made a contribution as a homemaker during the period in which these sums were saved.
It is not possible to be precise and, indeed, as the Full Court make plain in Dickons, over-precision may be in error, but to the extent that it is necessary, I would describe the husband’s contribution as slightly greater, assessing all these matters together, and if one was putting a percentage on it, it would produce a result of 52.5% in his favour in respect of contributions even factoring in, as I do, the wife’s care, which must be very stressful, of children presenting considerable and difficult demands.
When one turns to the question of future needs, both parties have some psychological deficits according to Dr H, and the wife slightly more so. They are both in receipt of the statutory benefits. Even if the husband is not entitled to carer’s allowance, he would presumably be entitled to some form of Newstart. I note that he has the good fortune to live with his parents. The wife is nine or so years younger, will ultimately have more time to work, but is there is one thing that is clear, it is that she cannot work now. She is committed to the care of troubled and needy children. Her work as a volunteer at convenient times is simply not the same as work. She simply cannot be expected to obtain any sort of significantly remunerative work for many years to come. Even if she does in the fullness of time, her pay is likely to be relatively poor as it was in the United States. There is no or very little child support likely in the near future, so her financial circumstances are difficult as, indeed, are the emotional burdens of the care of these children, whom, I have no doubt, both parents love very dearly.
The husband himself faces difficulties. He is not that well qualified, if at all. I note that the first really good job he obtained in the United States really seems to have emerged because he had a fortunate contact who was able to get him into the stream, if I can so describe it. He has been trying hard to get work for two years. He has deposed, without challenge, that he has lowered his sights to jobs in the $70,000 range and he has not been successful. Now, that has, of course, been during the COVID emergency, when as we all know, jobs have been contracting all over the place rather than the opposite. If he is very lucky, he will get a very well-paid job, but I have no doubt that, at some point, he will obtain employment. He presented as a thoughtful and considered personality and given his work experience, to the extent that one is able to make these sort of prognostications, I think he will, indeed, obtain employment even if less well-paid, one way or the other.
The pool is a small one and the mother’s needs are considerable. Despite the slightly greater contributions of the husband and, once again, emphasising this is part of the overall holistic outcome that the Full Court makes appropriate, I think an outcome that gives a seventy-thirty final split to the wife, but including the debts of the parties, as the husband seeks, is just and equitable and taken in conjunction with the superannuation split, the overall outcome, as I have described is that which is just and equitable in all these relevant circumstances.
So in case I have not made myself sufficiently clear, the property will be sold. Debts of the relationship asserted by the husband will be paid out of the sale proceeds after the mortgage and costs of sale, and so on, are paid. The resultant figure will be divided as to 70 to 30 to the wife and the superannuation will be split evenly.
I request counsel to draft a set of minutes, if not this afternoon, overnight, and forward it to my chambers. If there is any difficulty or disputation about it, let my associate know and I will hear the parties if it is necessary to do so.
I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Burchardt. Associate:
Dated: 22 November 2021
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