Keedle & Keedle
[2021] FCCA 182
•5 February 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Keedle & Keedle [2021] FCCA 182
File number(s): NCC 3839 of 2018 Judgment of: JUDGE BETTS Date of judgment: 5 February 2021 Catchwords: FAMILY LAW – property settlement proceedings – lengthy marriage – husband holds most of the assets – section 75(2) considerations – just and equitable outcome. Legislation: Family Law Act 1975 (Cth), Pt VIII Cases cited: Biltoft (1995) FLC 92-614
Black & Kellner (1992) FLC 92-287
Hickey v Hickey & Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Mezzacappa (1987) FLC 91-853
Stanford v Stanford (2012) FLC 93-518
Number of paragraphs: 137 Date of last submission/s: 16 September 2020 Date of hearing: 29 and 30 July 2020 and 16 September 2020 Place: Newcastle Solicitors for the Applicant Byrnes Lawyers Counsel for the Respondent Mr Eardley Solicitors for the Respondent Russo & Partners ORDERS
NCC 3839 of 2018 BETWEEN: MS KEEDLE
Applicant
AND: MR KEEDLE
Respondent
ORDER MADE BY:
JUDGE BETTS
DATE OF ORDER:
5 FEBRUARY 2021
THE COURT ORDERS THAT:
1.Within 28 days the Husband do all acts and sign all documents necessary to transfer to the Wife all of his right, title and interest in the real property situated at and known as B Street, Suburb C.
2.Within 42 days the Husband shall pay to the Wife or as she otherwise directs the sum of $209,029.
3.As between the parties the Wife is declared to be the sole owner of, and the Husband relinquishes any claim on, the following:
(a)the Wife’s motor vehicle;
(b)all monies standing to the credit of the Wife in any bank, building society, credit union or other financial institution account/s;
(c)all items of personalty in the Wife’s possession as at the date of this order.
4.As between the parties the Husband is declared to be the sole owner of, and the Wife relinquishes any claim on, the following:
(a)the real property situated at and known as D Street, Town E;
(b)the real property situated at and known as F Street, Suburb G;
(c)the Motor Vehicle 1;
(d)the Motor Vehicle 2;
(e)the two caravans;
(f)the Motor Vehicle 3;
(g)the Motor Vehicle 4;
(h)the Motor Vehicle 5;
(i)the Motor Vehicle 6;
(j)the Truck 7;
(k)all other vehicles, plant, equipment and materials in the Husband’s possession as at the date of this order;
(l)all monies standing to the credit of the Husband in any bank, building society, credit union or other financial institution account/s;
(m)the Husband’s H Shares and J Shares;
(n)the monies standing to the credit of the Husband in the Super Fund K;
(o)all other items of personalty in the Husband’s possession as at the date of this order.
5.Each party be solely liable for, and indemnify the other party in respect of, any liability attaching to any item of property to which the first party is entitled pursuant to this order.
6.In the event that either party refuses or neglects to execute any document necessary to give effect to all or any of the Orders herein within seven (7) days of submission of such document to them or their respective solicitors, the Registrar of the Federal Circuit Court of Australia at Newcastle be appointed pursuant to section 106A of the Family Law Act 1975 to execute any such document in the name of the defaulting party and do all other acts and things necessary to give validity and operation to the said document or documents without further notice. The Registrar’s jurisdiction shall be enlivened by the filing of an affidavit by the solicitor for the party seeking such relief.
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 under the pseudonym Keedle & Keedle is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BETTS
INTRODUCTION:
These are property settlement proceedings arising out of the breakdown of the marriage between Ms Keedle (“the wife”) and Mr Keedle (“the husband”).
The parties commenced a relationship in mid-1999, marrying shortly afterwards in 1999. At the time the wife was a 35yo Country L lady working in Australia as a nanny. It was her first marriage. The husband was a 57yo Australian. He was a self-funded retiree, divorced with three (3) children.
The parties went on to have three (3) children of their own:
·Ms M born in 2000 (now an independent adult);
·Mr N born in 2001 (now an independent adult);
·X born in 2015 (presently aged 16). He lives with Ms M.
By April 2017 the marriage had finally broken down after close to 18 years.
The parties continued living in the former matrimonial home until May 2020 when the husband left, taking his caravan with him and moving to Queensland to live with his daughter and son-in-law, Ms O and Mr P. The wife remained living in the former matrimonial home.
The parties are litigating over approximately $2.5M in net assets. Practically all of it consists of, or derives from, to the husband’s pre-relationship assets.
DOCUMENTS RELIED UPON AT TRIAL:
The trial proceeded by videolink on 29 and 30 July 2020, with submissions on 16 September 2020. Mr Byrnes, solicitor, appeared for the wife. Mr Eardley of counsel appeared for the husband.
The wife relied upon her:
(a)Case Outline Document filed 27 July 2020;
(b)Amended Initiating Application filed 4 October 2019;
(c)Trial affidavit filed 27 July 2020;
(d)Financial Statement filed 27 July 2020.
The husband relied upon his:
(a)Case Outline Document filed 27 July 2020;
(b)Further Amended Response filed 27 July 2020;
(c)Trial affidavit filed 27 July 2020;
(d)Financial Statement filed 27 July 2020;
In the course of the trial the parties tendered various documents. Their written submissions were also marked as exhibits for convenience. In closing submissions I was also provided with a transcript of the hearing on 30 July 2020 and taken to various references therein.
WITNESS OBSERVATIONS AND SOME RELEVANT FINDINGS:
I had the advantage of seeing each of the parties being cross-examined.
The wife’s evidence:
The husband’s counsel made various attacks on the wife’s evidence and credibility, particularly in respect of disclosure.
It was common ground that during the marriage the wife had transferred money to her family in the Country L without the husband’s knowledge or consent. In February 2020 the husband requested disclosure as to those money transfers as well as the wife’s cash withdrawals. The wife responded by collating a full ten (10) years’ worth of her bank account statements (being the period from January 2010 to May 2019) from which she was able to prepare detailed schedules disclosing $43,404 in overseas transfers. The schedules were annexed to her trial affidavit.
The wife’s transfers had been made through “Q Company”, an international money transfer company. The husband subpoenaed their records which went as far back as 2004. The total transfers amounted to $54,525 over that longer timeframe.
The wife properly conceded that higher figure at trial. I consider that she was being honest when she prepared her schedules; it was not suggested otherwise. The reality is that her schedules simply did not go back that far in time.
I accept the wife’s evidence that she paid the money to her family because she felt obligated; she comes from a large family who were living in relative poverty. While it is true that she did not consult the husband about the transfers, it was a distinct feature of this relationship that the parties always kept their finances separate. In the same way he did not consult her about financial matters either. I do not the wife’s transfers as a serious credibility issue per se.
Inferentially however the wife must have had enough leftover money in that timeframe to be able to assist her family overseas. So her finances may not have been quite as “tight” as she suggested.
That said, I do not accept the husband’s allegation that the wife regularly took significant amounts of cash from his wallet during the marriage. I do not think that the husband would have tolerated her doing so.
The wife was criticised for not producing her Centrelink records for trial. In early 2020 the husband’s solicitors had sent her a Centrelink authority to sign and return but she refused. Instead she indicated through her solicitor that she would obtain and produce the records herself. A month out from trial she then reneged - claiming the husband’s request for her Centrelink records was a “mere fishing expedition”. Though she did later sign an authority some two (2) weeks before the trial, it was too late for the Centrelink records to be produced.
To be fair, the wife had disclosed her bank statements over the period 2010 - 2019 into which all of her Centrelink income had been paid (referred to earlier) and in the end I do not think that her Centrelink records would have taken me very far. Nonetheless, the wife was obstructive. Having said she would obtain the records, she should have done so.
The wife was cross-examined about not disclosing her passbook in respect of her Country L bank account. But her evidence was that the account only had $1,600 in it at the time the relationship commenced and in cross-examination she said that the account had been closed down in 2003. She volunteered that she had the passbook with her in court, but the husband’s counsel did not call for it. He merely had her agree that she had never disclosed it. Nor did the wife produce it in re-examination. In any event I accept the wife’s evidence as to the balance and that the account was closed down in 2003; nothing turns on it.
The wife was cross-examined about a $20.00 transfer from a so-called “Account” into her account. I accept her evidence that the “Account” belonged to their son X. She explained that he could not access the moneys in his own bank account and so when he wanted cash he would ask her to transfer money from his account to her account and then give it to him. I accept that evidence; such modest transfers do not take me anywhere.
The wife was cross-examined about two (2) deposits to her account by “Employer R” – one being for $195 and the other for $59. Initially the husband’s counsel positively suggested to the wife that she had been working for them. The wife denied it, explaining that those deposits were a refund of some post-separation costs she had incurred in obtaining a driver’s licence. Following her evidence the husband’s legal representatives made some further investigations which corroborated the wife’s account. The husband promptly withdrew his allegation.
The wife was cross-examined about some more substantial deposits into her account in January and March of 2020 but I accept her evidence that this money came from friends and relatives. Notably, just prior to two (2) such deposits which totalled $620, her account balance had been a mere $2.67. I accept the wife’s evidence that these particular deposits were to help her pay her bills. Other deposits ($300 and $880) were utilised by the wife to travel back to the Country L so she could attend her brother’s funeral. Nothing turns on any of those deposits and I do not see how any relevant disclosure issue arises.
Save for the Country L money transfers, my overall impression was that the cross-examination of the wife as to financial matters reflected a “nickels and dimes” approach by the husband. That impression was strongly reinforced by the husband’s initial position at trial – namely that the whole $208,000 of the wife’s “cash” withdrawals from her account in the period January 2010 to May 2019 should be notionally added-back to the Balance Sheet on the basis that the wife could not fully account for them. The wife was a Centrelink recipient throughout that entire period, and her cash withdrawals averaged just $20,800 per annum in circumstances where she was responsible for buying the groceries for the family for most of that period.
While the husband sensibly withdrew from that position after the wife’s cross-examination was completed, it left a mendacious impression – particularly given that at all material times he himself had always had access to infinitely greater financial resources than the wife.
Overall, I consider that the wife was generally a satisfactory witness and who gave reliable evidence.
I had much greater concerns about the reliability of the husband’s evidence.
His trial affidavit contained numerous scandalous, insulting and irrelevant references towards the wife and her character. It set an unfortunate tone.
While much of the offensive material ended up being struck out in the course of objections, such matters should never have been included in the affidavit material to begin with. Not only was such material unnecessarily inflammatory and time-wasting, it also showed the husband’s animus towards the wife. (Some of that animus also appeared to come from his daughter Ms O.)
Like the wife, the husband had been obstructive. In early 2020 the wife’s solicitors wrote to the husband’s solicitors asking for details of the husband’s paid legal fees to date. The letter also sought a $50,000 interim distribution to the wife on account of her anticipated legal fees, which she was clearly unable to meet. The husband did not give her the courtesy of a response. (It later emerged that the husband was paying his legal fees as he went along; these amounts were substantial and are included in the Balance Sheet.)
But the husband’s most significant credibility issue arose in relation to four (4) substantial transfers from his bank account:
·$30,000 on 8 March 2017;
·$30,000 on 26 June 2017;
·$20,000 on 18 March 2019;
·$40,000 on 29 March 2019.
In relation to these transfers, the husband’s evidence, and his disclosure, were highly unsatisfactory.
As at the date of the Conciliation Conference in January 2020, the husband still had not made any proper disclosure about the transfers.
When the wife’s solicitors subsequently continued to press the husband for disclosure, she was initially met with the glib response that the wife had not provided her Centrelink documents (referred to earlier).
Evidence and disclosure in relation to the 2019 transfers:
On 26 March 2020 the husband’s solicitors belatedly wrote to the wife’s solicitors to explain that the 2019 transfers related to the building costs incurred by the husband for a liveable shed/unit that had been erected at Ms O and Mr P’s property for him to live in.
By way of corroboration/disclosure, the husband’s solicitors’ letter annexed copies of various invoices and quotes for the building and related work. Notably the husband’s solicitors had been given copies only of the documents, not the originals.
The copies appeared to have been whited-out in places. The wife was suspicious; she subpoenaed the records of the tradespeople/entities involved. The subpoenaed documents showed that the whited-out sections were in fact “alterations” from the original documents. In particular:
(a)a “Precision Concreting” Tax Invoice of 10 May 2019 ($550) originally addressed to “Mr P” was now addressed to the husband. The same change was made in respect of their Tax Invoice of 13 May 2019 ($11,611);
(b)a “S Company” Works Contract of 11 March 2019 originally addressed to “Mr P” was now addressed to the husband and included the husband’s contact details. The husband’s signature had also been added as though he had been the customer. Their subsequent Tax Invoice of 15 March 2019 ($34,835) originally addressed to Ms O and Mr P was now addressed to the husband;
(c)a quote from “T Building Approval” ($880) originally addressed to Ms O and Mr P was now addressed to the husband;
(d)a quote from the “U Company” of 11 March 2019 ($2,640) also had the customer’s name changed from Mr P to the husband, as well as having the husband’s signature added. Moreover, the subpoenaed records revealed that “U Company” did not even end up undertaking the work quoted.
The husband was cross-examined about these alterations. Partway through, the husband’s counsel urgently asked for the matter to be stood down, with a request that the parties be briefly excluded from the hearing in the meantime. The wife did not object and, though unusual, I acceded to that course.
When the matter came back on with both parties still out of hearing of the court, the husband’s counsel advised that he had just received instructions that someone sitting in court with them (presumably one of Ms O or Mr P) had made the alterations and that it was Ms O, not the husband, who had provided the documents to the husband’s solicitors.
Still in cross-examination, the husband had not been able to give instructions to his counsel on the issue. Upon being recalled to the witness box, his evidence was that he had received the original documents from the entities/tradespeople – which seems odd given that those documents were all addressed to Ms O and Mr P. He also said that he had signed them where his signature appeared and that he had delivered the documents to his solicitor.
Put shortly, his evidence was at odds with his counsel’s “concession”. I note that Ms O was not called as a witness; the only evidence on point was that of the husband. In the circumstances I find that the husband himself altered the documents. But even if I rejected that evidence and instead accepted his counsel’s “concession”, I would have to find that the husband at the very least acquiesced in it. After all, his signature does appear on some of the documents.
The husband’s counsel urged me not to take an adverse view of the husband’s credit on account of these alterations, submitting that the husband’s transfers nonetheless related to the shed building work. He essentially submitted that the alterations were an act of foolishness, rather than dishonesty. I respectfully disagree; there was a deliberate alteration of relevant disclosure documents so as to convey a knowingly false impression. This reflects adversely on his credibility. I do not accept the husband’s evidence as to how he applied the $60,000 – particularly where he had ample time to make full and frank disclosure prior to delivering the altered documents. I cannot make a finding as to what the husband did with those moneys.
The 2017 transfers:
Only on 23 July 2020, the week before trial, did the husband finally disclose that the original $30,000 transfer on 8 March 2017 was to his daughter, Ms P, on account of his anticipated funeral expenses. The letter admitted that she was still holding that money on trust for him.
The existence of such moneys as an asset had never previously been disclosed.
As to the June 2017 transfer of $30,000 the husband said in the witness box that this related to the cost of materials and improvements for the D Street, Town E property. He thought that he had probably transferred that money to Ms O as she was helping him meet those costs. None of that evidence was in his affidavit. No corroborating documents were provided. His trial affidavit had merely said that he had spent $70,000 on the building costs for the shed. I accept that the husband transferred the $30,000 to Ms O but am unable to make any positive finding as to how that money was spent (if it has been).
The husband’s evidence as to the date of separation was also inconsistent and unsatisfactory. I will deal with that specific issue later.
Overall, I generally preferred the wife’s evidence over the husband’s evidence to the extent that they conflicted.
THE LAW:
These proceedings are governed by the provisions of Part VIII of the Family LawAct1975 (“the Act”).
In these Reasons, I will adopt the following approach:
(a)Firstly, I will identify and value the property, liabilities and financial resources of the parties (the “Balance Sheet”);
(b)Secondly, I will consider whether it is “just and equitable” to make a property settlement order;
(c)Thirdly, I will identify and assess the respective contributions made by each of the parties towards the net assets pursuant to s 79 of the Act. For convenience, each party’s respective contributions–based entitlement will be expressed in percentage terms;
(d)Fourthly, I will identify and assess the relevant “future factors” set out in s 75(2) of the Act. I will also consider any relevant matters pursuant to s 79(4)(d), s 79(4)(f) and s 79(4)(g). Having done so, I will then determine what (if any) adjustment ought to be made to each party’s respective contributions-based entitlement;
(e)Lastly, I will consider the effect of my findings and proposed orders so as to satisfy myself that any proposed property settlement order I am contemplating is “just and equitable”.
This pathway is derived from the Full Court’s decision in Hickey v Hickey & Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143, adapted to take into account the High Court’s decision in Stanford v Stanford (2012) FLC 93-518.
STEP 1 – THE BALANCE SHEET:
The parties were ultimately able to agree upon a Joint Balance Sheet which narrowed the dispute (ex 18). That Balance Sheet has been reproduced below, save that I am ignoring cents as de minimis. The disputed items have been asterisked.
JOINT BALANCE SHEET
Ownership
Description
Value
ASSETS
1.
H
B Street, Suburb C
$ 600,000
2.
H
Motor Vehicle 1
$ 2,750
3.
H
Motor Vehicle 2
$ 6,500
4.
H
F Street, Suburb G
$ 555,000
5.
H
D Street, Town E
$ 155,000
6.
H
Caravan
$ 1,000
7.
H
Backhoe
$ 1,000
8.
H
V Bank (Account ...50)
$ 246,219
9.
H
W Bank (Account ...78)
$ 6
10.
H
Y Shares (share value $3.405 as at 22 July 2020)
$ 2,128
11.
H
Z Shares (share value $5.675 as at 22 July 2020)
$ 9,308
12.
H
K Shares (share value $1.730 as at 22 July 2020)
$ 1,421
13.
H
14’ x 8’ Box Trailer
$ 700
14.
H
Motor Vehicle 3
$ 24,810
15.
H
Motor Vehicle 4
$ 23,180
16.
H
Motor Vehicle 5
$ 7,051
17.
H
Motor Vehicle 6
$ 5,865
18.
H
Truck 7
$ 6,519
19.
H
Truck 8
$ 5,000
20.
H
Tractor
$ 1,300
21
H
Caterpillar
$ NK *
22
H
Quad Bike
$ 250
23
H
Caravan
$ NK *
24
H
Tractor
$ NK *
25
H
Ride-on Lawnmower
$ NK *
26
H
Ride-on Lawnmower
$ NK *
27
H
Truck
$ NK *
28
H
Truck
$ NK *
29
H
Truck
$ NK *
30
H
Backhoe
$ NK *
31
W
Westpac Bank Account
$ 800
32
W
Motor vehicle
$ 5,000
TOTAL
$1,660,807 (+ unknown values)
ADDBACKS
33.
W
Funds transferred to the Country L
$ Nil *
34.
H
Funds transferred to Daughter (for Shed and Estate Expenses)
$ Nil *
35.
H
Legal Fees
$ 136,253
36.
H
Funds withdrawn for the purchase of material to be applied to D Street, Town E
$ Nil *
37.
H
Monies withdrawn by the husband for his own benefit
$120,000*
TOTAL
$ 256,253
LIABILITIES
37.
H
AA Bank Credit Card
$ 1,310
38.
W
Car debt to daughter
$ 3,700
39.
W
Legal Fees
$ Not included
(undisclosed)
TOTAL
$ 5,010
SUPERANNUATION
40.
H
Super Fund K
Retirement Saving Account
$545,917
TOTAL
$545,917
Husband’s vehicles and equipment (items 21, 23 – 30):
The items in question were acquired by the husband (some post-separation) and are stored on the D Street, Town E property. The husband’s affidavit values them at nil, explaining in his trial affidavit that:
Some of the assets are worth only scrap value. Some of the assets are not registered. Some of the assets do not work and have not worked for years. I am an avid collector of cars and have owned many over the years. I have been a member of various car clubs on and off for a period of 40 years. It is on this basis that I value these vehicles.
While it is undisputed that the husband has been a long-term collector of vehicles and equipment, the wife does not accept his nil “valuation”. She contends that the only way to find out their value is to sell them and divide the proceeds in whatever proportion the court ultimately considers just and equitable.
In July 2020, the wife travelled to the D Street, Town E property to photograph all of the plant and equipment located there; these photographs became exhibit 5. The photographs depict various old vehicles, equipment, materials and some shipping containers. It is not possible for me to attempt to reconcile the photographs with the items in the Balance Sheet. Moreover, the contents of the shipping containers (if any) have not been photographed as the wife did not have access to the insides.
The husband contends that the photographs are not evidence of value and I agree with that. The husband also contends that the photographs are not evidence of ownership of the items depicted. While that is strictly correct, it is equally true that there is no evidence from the husband that any other person stores plant or equipment on the D Street, Town E property. The husband had the opportunity to give such evidence and did not do so. In the circumstances I consider that, on balance, the items depicted in the photographs do belong to him.
In relation to the shipping containers, the husband deposes that they form part of the roofed structure at D Street, Town E; that they are effectively fixtures which cannot be removed and that their value forms part of the value of the land. I am sceptical of the husband’s evidence when it comes to matters of disclosure and in my view his evidence as to value is either inadmissible as he is not a properly qualified expert, or at best if such evidence is admissible then it must carry little or no weight, particularly given my concerns about his credibility.
Ultimately I am unable to accept the husband’s nil value, but there seems to be no proper basis for me to resolve the disputed values apart from ordering a sale. Such a process is unattractive given the absence of an itemised inventory; the wife proposes that she provide the husband a list of the items at D Street, Town E that she wants sold (save for the items agreed will be retained by the husband). This proposal is fraught with difficulty given that the husband, not the wife, is much more familiar with what is on the site. There would also likely be real practical issues in respect of the mechanics of any sale.
For Balance Sheet purposes I have treated the value of the disputed items as “unknown”. But there are also likely to be other items of property at D Street, Town E of unknown value which are not included in the Balance Sheet.
Funds transferred to the Country L:
The husband contended that the full amount of $54,525 transferred by the wife to her family in the Country L in the period 2004 – 2019 should be notionally added back as an asset on the wife’s side of the ledger.
The payments were made by way of lump sums. The wife admitted that she used Centrelink monies including baby bonus monies, as well as some of the husband’s tax rebate money for this purpose. But while the total is significant, the amounts average out at $70.00 per week over that timeframe.
In my view this money is much more appropriately dealt with in the context of contributions, particularly given the timeframe over which the payments were made.
Accordingly I have assigned those moneys a nil value in the Balance Sheet.
Husband’s funds transferred to daughter / used to purchase materials / withdrawn for his own benefit (Items 34, 36 & 37):
These are the transfers totalling $120,000 referred to earlier.
The husband and wife both agreed that this figure be added back. The only point of difference was that the husband sought a finding that $90,000 was transferred to his daughter and $30,000 was applied towards materials at D Street, Town E. The wife simply sought that $120,000 be treated as moneys withdrawn by the husband for his own benefit. I adopt the wife’s approach given my earlier findings.
Wife’s car loan debt to their daughter Ms M:
The wife’s evidence is that she purchased a Motor Vehicle 9 from her daughter Ms M for $5,000; that she borrowed the full amount from Ms M; the loan agreement was oral; and that the wife has since re-paid $1,300 such that the present debt is $3,700.
The husband does not accept this as a legitimate debt. He contends that I should not accept the wife’s evidence given that the wife did not call Ms M as a witness. The wife explained in the witness box that she was originally going to call Ms M but ultimately decided not to.
In Biltoft (1995) FLC 92-614 the Full Court held that it was open to a court not to take into account, or to discount, the value of an unsecured liability in certain circumstances. This includes, but is not limited to, a liability which is vague or uncertain, unlikely to be enforced or not reasonably incurred.
I am aware from the evidence that Ms M is a young woman; she works at Employer BB. There is no evidence that she has any significant assets. I accept the wife’s evidence that she intends to repay Ms M and her evidence as to the amount currently owing. The wife will have ample capacity to fully pay out the loan once she recovers her property entitlements in this case.
STEP 2 – IS IT “JUST AND EQUITABLE” TO MAKE A PROPERTY SETTLEMENT ORDER?
A property settlement order pursuant to Part VIII of the Act can only be made where the court is satisfied that it would be “just and equitable” to make such order.
While the parties did keep ownership of their assets strictly separate during the marriage, each now contends that it would be just and equitable for the court make a property settlement order.
I accept that contention and note that the parties are unable to continue to mutually enjoy the use of the assets. For example, the wife presently lives in the former matrimonial home in the husband’s name at B Street, Suburb C - but does not have legal title. The husband has legal title but does not live there.
In my view it would be “just and equitable” to make a property settlement order in this case.
STEP 3 – ASSESSING AND WEIGHING THE RESPECTIVE CONTRIBUTIONS OF THE PARTIES:
Both parties submitted that contributions should be assessed on a “global” basis. I consider that to be appropriate.
Initial contributions:
When they married, the wife had nominal assets.
The husband was a self-funded retiree with substantial assets. He already owned the two (2) real properties at B Street, Suburb C and F Street, Suburb G, both of which were unencumbered. He had $285,023 in superannuation, owned shares in CC Shares and K Shares, as well as various vintage motor vehicles and equipment. (Though it makes no practical difference, I do however prefer the wife’s evidence that one specific vintage car, the Motor Vehicle 10, was purchased after the relationship commenced (for $7,000).)
On any view, the husband’s initial contributions are overwhelming and for all intents and purposes comprised the whole of the matrimonial property.
Contributions during the relationship:
Initially the parties lived in the F Street, Suburb G property. The wife ceased working a few months later after discovering she was pregnant. Apart from doing some cleaning work in mid-2000, the wife was not otherwise employed outside the home.
The relationship dynamics were established early on. The husband made clear that the wife was expected to look after the home, cook the meals and care for him and the children. The wife was content with that. She carried out virtually all of the day-to-day household chores without much involvement or assistance from the husband, including making meals, making the bed, doing the washing and ironing, cleaning up after meals, and generally keeping the house clean and tidy.
The husband briefly returned to work in the lead-up to the Sydney Olympics but soon returned to his self-funded retiree lifestyle. The husband invested his superannuation wisely; its value significantly increased during the relationship. He also rented out the F Street, Suburb G property after the parties moved out. That said, the husband’s overall income was fairly modest in that the family qualified for Centrelink benefits. (By way of example his taxable income ranged between $9,500 and $15,000 in FY 2016 – 2018.)
The husband continued to live something of a “bachelor’s life”, socialising with his friends usually without the wife being present. Although the husband paid the rates, insurances, vehicle registration, utility bills and other “big ticket” items, his money was otherwise his to spend. Initially the wife had no income at all; the husband would give her money for the groceries each week.
The wife was also dependent upon the husband for transport as she did not have a driver’s licence. I accept her evidence that the husband was unwilling to teach her to drive and that he generally discouraged her from getting a licence.
In 2001 the parties moved to the B Street, Suburb C property. It provided a fairly basic living standard. There was no hot water in the kitchen, which made preparing meals very difficult. When the stove broke down, the husband replaced it with a portable stove which the wife then used to cook. The home could be very cold in winter and the parties only had a small portable heater. I accept the wife’s evidence that the husband was reluctant to spend money upgrading the home. I do not accept the husband’s evidence that the wife – seemingly frivolously or carelessly - broke numerous electrical and other household items which he then had to replace.
The property was also somewhat isolated as its location at the Region DD and was residential only. Shops, schools, extra-curricular activities and the like were all on the other side of the river. This meant catching a ferry across the river (which transported cars and people); there were limited bus services available which the wife used when the husband was away.
In 2001 the husband purchased the D Street, Town E property, approximately 50 acres. He told the wife he was going to build a shed there to store his vintage cars and equipment. The husband went on to purchase various vehicles, plant and equipment which he stored there and worked on. He visited the property regularly. I accept the wife’s evidence that he initially went there one (1) to two (2) days per week and that by around 2002 he was going there two (2) to three (3) days per week.
While the husband was at D Street, Town E working on his old vehicles and machinery, the wife was at B Street, Suburb C looking after the children and attending to the necessary domestic tasks. She and the children sometimes went to D Street, Town E with him, particularly during school holiday periods.
Around 2002, the wife separated from the husband. She moved into a women’s refuge with Ms M and Mr N who were both still infants.
A few weeks later the parties reconciled and the wife and children moved back into the B Street, Suburb C home. The wife then instigated a significant change to their financial situation, by re-directing the family’s Centrelink benefits to herself so that she had access to her “own” income. The husband then ceased paying for the groceries; the wife was now expected to pay for them.
While the wife began paying for the day-to-day expenses at home, the husband continued to pay for the “big ticket” items.
As well as doing the housework, the wife also worked in the yard and gardens. Her use of “blood ’n bone” fertiliser in the garden upset the husband’s sensibilities and was his stated reason for vacating the bedroom in 2007 and moving into the garage to sleep. The husband’s complaint is that the wife did not properly wash the fertiliser off herself before coming to bed; she vehemently disagrees. There is no need for me to make any finding.
I accept that the husband did do some of the mowing.
There is a factual dispute as to whether in 2005 the husband gave away six (6) of his vehicles and a caravan to his children Mr EE, Ms O, Ms FF and Mr N. He deposes that he did; the wife disputes it. She contends that one of the vehicles allegedly given away in 2005 – a Motor Vehicle 11– was not even purchased until 2007. I also note that in 2005 Mr N would only have been four (4) years of age.
I am unable to accept the husband’s evidence. I do not know what, if any, of those vehicles he still owns and where they might be. I have not included them in the Balance Sheet.
In 2006 the husband purchased a property at Town GG for $220,000 without consulting the wife.
At trial the evidence was that between 2010 and 2020 the wife received approximately $240,000 in Centrelink benefits and family tax benefits - at an average of $24,000 per annum. On this basis the husband contends that her money transfers to the Country L ($54,525) assume real significance in a contributions sense.
But each party spent money for their own purposes during the marriage. The husband took numerous overseas trips on his own, including trips to Country HH for 2 ½ weeks in 2002 and for approximately 2 weeks each in 2008, 2009, 2010 and 2017. (He also went overseas for 2 weeks after separation in 2018). While he was overseas the wife had to rely on taxis, buses or neighbours to transport her and/or the children. The husband did not leave any additional money behind to assist the wife.
I accept that during the marriage the parties travelled on a few occasions to the Country L as a family. On those occasions the husband paid for the flights and the parties stayed with the wife’s family. The husband paid most of the expenses, as well as providing some money to the wife’s family. But staying with the wife’s family did defray some of the travel costs for the parties.
By around 2011 onwards the husband was going to D Street, Town E approximately three (3) to four (4) days per week; the wife and children generally stayed behind.
I do accept that the husband was involved in the children’s upbringing - teaching them how to ride bikes, taking them to the park, making sure that their hygiene had been attended to, that they had eaten dinner etc. He was also involved to some extent in their extra-curricular activities and in particular he and Mr N had some common interests. He also had to drive them places. I do not dismiss or discount the husband’s parenting contributions but I am satisfied that the wife was their primary carer, particularly given the roles each adopted during the relationship, and the husband’s absences overseas and at D Street, Town E.
In late 2016 Ms M moved out of the home. The wife remained primary carer for Mr N and X.
Post-separation contributions:
The separation date was disputed; I will deal with that first.
The husband’s evidence is that the marriage broke down around the time that he purchased a caravan in 2013 and started sleeping in it. However, in an earlier affidavit he had deposed that separation was in 2017. When this earlier affidavit was put to him in the witness box, he said the 2017 date was an “error”. I do not accept that.
I accept the wife’s evidence the parties maintained some form of intimate relationship until late 2016.
In early 2017, the wife was continuing to do the usual household chores. But in the first quarter of 2017, the husband’s brother died and he himself had a cancer scare. Ms O assisted the husband by taking him to medical appointments; she also arranged a meeting with a solicitor for the husband to change his Will and get his affairs in order. Around that time (March 2017) the husband transferred $30,000 to Ms O on account of his anticipated funeral costs. I accept the wife’s evidence that around this time she and the husband had a verbal altercation with Ms O present in which the wife threatened to divorce the husband; he responded with verbal abuse.
Shortly after, the husband travelled overseas on his own to Country HH. Upon his return the wife told him she was no longer going to wash his clothes anymore.
The wife still cooked meals for the husband until November 2017 and she fixes that as the separation date.
On the evidence I am satisfied that the marriage had in fact broken down by April 2017.
The wife has obviously had the significant benefit of living in the unencumbered home ever since. The husband lived there until May 2020.
In 2017 the husband sold the Town GG property and retained the sale proceeds. The wife had no involvement or knowledge. She later ascertained that the sale price had been $260,000 after having her solicitor undertake a title search of the property.
Post-separation the husband continued paying the rates and utility expenses for the B Street, Suburb C home although the wife did pay three (3) electricity bills. The husband continued to receive the rental income, and meet the expenses for, the F Street, Suburb G property.
The husband continued to spend regular, significant amounts of time at D Street, Town E as well as visiting his adult children, particularly Ms O in Queensland.
Mr N moved in with his girlfriend.
In late 2019, X moved out of the B Street, Suburb C home to go and live with Ms M. The wife however continued to do X’s shopping, washing and generally assisted him by cooking meals, taking him to work and cleaning up he and Ms M’s home.
At the time of trial, X was attending JJ School.
Overall assessment of contributions:
This was a relationship of approximately eighteen (18) years in which the husband contributed all of the capital. He invested his superannuation wisely. He also deployed some of his income for the benefit of the family. He transported the wife and children, and he made parenting contributions. His overall contributions are substantial and need to be given real weight and recognition.
The wife was a homemaker and parent throughout, which at times would have been challenging - particularly living in the somewhat basic property at B Street, Suburb C and not having a licence. Her contributions were also significant and need to be given proper weight and recognition.
In the overall analysis, contributions must favour the husband by reason of his initial financial contribution. It is not a question of that contribution being “eroded” over time but rather a question of what weight should now attach to it given the myriad of other contributions in the intervening 18 years.
In the exercise of my discretion I would assess contributions as 67% to the husband and 33% to the wife.
STEP 4 – IDENTIFYING AND ASSESSING THE “FUTURE FACTORS”:
I have found that the total net assets are $2,457,967.
On a contributions basis, the wife is entitled to 33% of the net assets and the husband 67%. The wife presently holds $2,100 in assets and the husband holds $2,455,867. The husband is required to transfer cash or other assets to the wife totalling $809,029. The husband would still retain net assets of $1,646,838 even after paying the wife her contributions-based entitlement albeit that this amount includes legal fees that have been spent.
This is the starting point when considering the future factors.
The wife was born in 1964 and is presently fifty-six (56). She has out of the workforce since not long after the marriage - some twenty (20) years or so now - and has been in continuous receipt of Centrelink benefits since 2002. The wife’s income-earning capacity is nominal at best. In all likelihood she will continue to be a Centrelink recipient until in due course will transition to an aged pension.
The wife presently lives week-to-week. She would have a reasonable standard of living if she were to receive 33% of the net assets.
In terms of her health, the wife suffers depression but is otherwise well.
She continues to be an involved parent to Mr N. She has not re-partnered or cohabited with anyone else and she does not receive any formal child support payments from the husband.
The husband was born in 1942 and is presently seventy-eight (78). He can no longer work. He suffers from type 2 diabetes, hypertension, back and leg pain and has some mobility issues. Like the wife, he has not re-partnered or cohabited with anyone.
His weekly income consists of $230 rent from the F Street, Suburb G property, $50 interest on investments, $15 in dividends and a $7 Centrelink seniors payment, totalling $302. His weekly expenses are approximately $1,688 per week so he is effectively depleting his assets to meet his living costs. But with his assets he will maintain a reasonable standard of living.
Ultimately the husband contended that he ought to receive a modest section 75(2) adjustment in his favour on account of his more advanced age and associated healthcare needs. The wife contended that there be no adjustment, or perhaps a slight adjustment in her favour on the basis that, being younger, she has a longer life expectancy and so would have greater overall financial needs.
There are some “unknowns” which favour the wife: s 75(2)(o). In particular I do not know the true value of the husband’s vehicles and equipment at D Street, Town E, nor the value of any materials stored there as seemingly depicted in exhibit 5. Moreover I do not accept that the husband’s motor vehicles were given away in 2005 although I have no evidence as to their value. I am mindful of authorities such as Mezzacappa (1987) FLC 91-853 and Black & Kellner (1992) FLC 92-287.
In the overall analysis, I have decided that no s 75(2) adjustment is warranted for either party.
STEP 5 – ENSURING A “JUST AND EQUITABLE” OUTCOME:
The wife proposes that she retain the B Street, Suburb C property ($600,000) and receive a cash sum to make up the balance ($209,029). The husband seeks that the wife vacate the B Street, Suburb C property so that he can resume occupation, and his case is that he will then raise the necessary cash funds to pay out the wife. His position is that the court need not concern itself with how he will obtain the necessary cash / finance.
The husband has owned the B Street, Suburb C property for a long time, well prior to the wife’s entry into his life. He has a strong family connection to the property.
But the wife has been in continuous occupation of the property since 2001 including post-separation. It is common ground that she loves fishing from the private beach at the property. Moreover the husband has been living in a separate shed/granny flat on his daughter Ms O’s property since May 2020.
On the wife’s proposal, the husband has presently available cash resources to pay the additional $209,029 to her. If the wife’s property entitlement was to be wholly paid in cash as the husband seeks, then there are potential enforcement issues.
On balance it seems to me that it would be “just and equitable” for the wife to now retain the B Street, Suburb C property, with a cash payment of $209,029.
I do not propose to order that the husband sell the vehicles, equipment etc at the D Street, Town E property. The husband may retain those items. Likewise the vehicles he claims to have “given away”. I consider that forced sale orders will be cumbersome, difficult to enforce and likely lead to further litigation and dispute. This proceeding needs to be brought to an end. Moreover, to order their sale would result in a double-counting given that I have already taken these matters into consideration pursuant to s75(2)(o).
For these reasons I make the orders set out at the commencement of the judgment.
I certify that the preceding one hundred and thirty-seven (137) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Betts. Associate:
Dated: 4 February 2021
Key Legal Topics
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Family Law
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Property Law
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Appeal
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