KERRIGAN & NOTT

[2017] FCCA 709

FEDERAL CIRCUIT COURT OF AUSTRALIA

KERRIGAN & NOTT [2017] FCCA 709

Catchwords:
FAMILY LAW – Property settlement – de facto relationship – no substantial dispute as to the facts – dispute as to whether former family home should be sold forthwith or in five years’ time.

Legislation:

Family Law Act 1975, ss.79, 81, 90RD, 90RG, 90SB, 90SF, 90SM

Cases cited:
In the Marriage of Hickey, Re (2003) 30 Fam LR 355; (2003) FLC 93-143; [2003] FamCA 395
Stanford v Stanford (2012) 247 CLR 108; (2012) 293 ALR 70; (2012) 87 ALJR 74; (2012) 47 Fam LR 481; (2012) FLC 93-518; [2012] HCA 52

Applicant: MR KERRIGAN

Respondent: MS NOTT

File Number: MLC 11378 of 2016

Judgment of: Judge Riley

Hearing date: 20 March 2017

Date of last submission: 20 March 2017

Delivered at: Melbourne

Delivered on: 12 April 2017

REPRESENTATION

Counsel for the applicant: Ms Goldsworthy

Solicitors for the applicant: Forster & Associates Lawyers

Advocate for the respondent: In person

Solicitors for the respondent: None

DECLARATION

1. The husband and wife were in a de facto relationship from no later than 1998 until March 2015.

ORDERS BY CONSENT

1. By 5pm on 21 March 2017, the husband provide to the wife a list of the tools that he wishes to collect from the shed.

2. By 5pm on 25 March 2017, the husband collect his paintings and the tools in the list from the shed, and the wife permit him to do so at any reasonable time by written agreement.

3. The husband be solely entitled to the exclusion of the wife to the tools collected by him.

4. Within four weeks of a written request from the wife, the husband deliver to the wife the (omitted) motorcycle and its parts on a date and at a place within the Melbourne metropolitan area to be agreed in writing.

5. The wife be solely entitled to the exclusion of the husband to the (omitted) motorcycle and its parts.

6. Within eight weeks, the husband collect from the wife the three other motorcycles.

7. The husband be entitled solely to the three other motorcycles and their parts.

ORDERS BY THE COURT

1. Within seven days, each party take all necessary steps and execute all necessary documents to cause the former family home at Property W certificate of title volume (omitted) folio (omitted) (“the property”) to be sold by public auction on the following conditions:   

   (a)the auction be listed no later than six weeks from the date of these orders;

   (b)Mr J, of (omitted) Real Estate, (omitted) be appointed as the selling agent;

   (c)Mr A, of (omitted) Conveyancing Services, be appointed as the conveyancer for the sale on behalf of both parties and his costs of and incidental to the sale be borne equally by the parties as and when they fall due;

   (d)the parties be equally responsible for any other amounts that may be required to prepare the property for sale on the recommendation of the selling agent, and co-operate with all reasonable requests of the selling agent with respect to marketing, presentation and availability for inspection of the property;

   (e)the parties execute a contract (“the contract”) for sale in the form prepared by the conveyancer at the sale price;

   (f)the reserve price for the sale of the property be set at $1,100,000 or such other price as may be agreed upon in consultation with the selling agent four days prior to the auction date, and failing agreement, be as determined by the President of the Real Estate Institute of Victoria or his or her delegate;

   (g)within 14 days of the date of sale, the parties do all things necessary to secure an early release of deposit monies and the deposit monies, net of payment of the agent’s commission, advertising expenses and legal expenses of the sale, be divided between the parties as to 55% to the wife and 45% to the husband;

   (h)the balance of proceeds of sale be applied as follows:

   (i)firstly, to pay all costs and commissions of the sale;

   (ii)secondly, to discharge the mortgage to the (omitted) Bank;

   (iii)thirdly, the sum of $40,000 to Mr K and Ms B;

   (iv)fourthly, the sum of $35,000 to Mr J; and

   (v)fifthly, of the balance 55% to the wife and 45% to the husband save that, from the wife’s 55%:

   A.$2,255 (being one half of the mediation costs) be paid to the husband; and

   B.the outstanding council rates, water rates, insurance premiums and utility accounts in respect of the property.

2. In the event the wife fails within the seven days referred to in order 9 to sign any required document (including but not limited to any contract, transfer and discharge of mortgage), then, pursuant to s.106A of the Family Law Act 1975, a registrar of the Federal Circuit Court of Australia be and is hereby appointed to execute any such document and do all acts and things necessary in the name of the wife to complete the sale of the property.

3. Pending the settlement of the sale of the property:

   (a)the wife have the sole right to occupy the property;

   (b)the husband make payment of the (omitted) Bank mortgage loan in the sum of $300 per week;

   (c)the wife be responsible for payment of all outgoings relating to the property including but not limited to council rates, water rates, insurances and utilities; and

   (d)neither party further encumber the property

4. Pending the sale of the property:

   (a)the parties within seven days make application to the (omitted) Bank to reduce the mortgage loan repayments until settlement of the sale to either reduce or suspend the repayments, and the parties do all such acts and things and sign all such documents as are required to comply with this order; and

   (b)the wife keep the property in a clean and tidy condition.

5. In accordance with paragraph 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable to the husband from his interest in the (omitted) Superannuation Plan (member number (omitted)) (“the fund”), the trustee of the fund pay to the wife an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $57,756, and there be a corresponding reduction in the entitlement of the husband.

6. The husband be restrained by himself his servants or agents from making any binding death benefit nomination to the trustees of the fund in favour of any person or doing any act or thing which would render any part of his interest a “non-splittable payment” or in any way diminish the value to the wife of the splitting order made in order 13 hereof.

7. These orders are binding on the trustee of the fund, it having been accorded procedural fairness.

8. Order 13 has effect from the operative date.

9. The operative date for this order is four working days after the service of a sealed copy of these orders upon the trustee of the fund.

10. Each party and the trustee of the fund have liberty to apply in relation to the implementation of the orders affecting the superannuation interests of the parties.

11. Unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money due under these or any subsequent orders:

    (a)each party 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;

    (b)all the chattels in the former family home are considered to be in the possession of the wife save for the tools, paintings and the three motor cycles in the shed;

    (c)each party forego any claim he or she may have to any superannuation benefits belonging to or earned by the other;

    (d)all insurance policies become the sole property of the owner thereof;

    (e)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;

    (f)any joint tenancy of the parties in any real or personal estate is hereby expressly severed; and

    (g)the wife be solely responsible for the payment of her Centrelink debt of $2,000 and her debt to Mr F of $4,000.

AND THE COURT NOTES THAT:

Section 121 of the Family Law Act 1975 provides that it is an offence punishable by imprisonment for up to one year to publish or disseminate to the public any account of family law proceedings which identifies the parties, witnesses or other people concerned with the proceedings, unless specifically authorised by the court.

IT IS NOTED that publication of this judgment under the pseudonym Kerrigan & Nott is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 11378 of 2016

MR KERRIGAN

Applicant

And

MS NOTT

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an application under s.90SM of the Family Law Act 1975 (“the Act”) for a de facto property settlement.  The respondent wife was not represented. After some discussion, it became apparent that there were no relevant contested facts.

2. However, there was a significant issue. The applicant husband wanted the former family home to be sold forthwith and the proceeds of the home and the other assets to be divided equally between the parties.  After some discussion, he was agreeable to the former family home being divided 55:45 in the wife’s favour.

3. The wife was agreeable to that division, but wanted the sale to be delayed for five years. In the meantime, she wanted the husband to pay the mortgage on the former family home.  She wanted the children to continue to live in the former family home, with the husband and wife alternating through it on a week about basis.  She wanted the parties to buy a small investment property, in which they could each live in the alternate weeks when they were not living in the former family home. The wife was prepared to pay rent on the small investment property to the husband. The husband was not agreeable to that proposal.

4. The husband also proposed that his superannuation be split to effect an equalisation of superannuation.  The wife was not opposed to that proposal.  Procedural fairness has been afforded to the trustee of the husband’s superannuation fund.

5. From separation in March 2015 until August 2016, the three children of the relationship lived with the wife in the former family home.  Since August 2016, they have been living with the husband. That is about seven months. The children, who are aged 15, 13 and nine years old, have spent virtually no time with the wife from August 2016 until March 2017.  However, in the two weeks prior to trial, the wife began walking the youngest child to school.

6. There are no court orders to the effect that the children live with the husband.  Neither party has filed a parenting application.  The court told the wife repeatedly during the hearing of the property application that there was no parenting application before the court and that neither party had indicated to the court that it was his or her intention to make a parenting application. Notwithstanding the court making those statements, the wife still did not indicate that she wished to make a parenting application.  The court indicated during the hearing that, in the circumstances, the court could only proceed on the basis that the children would continue to live with the husband, as they had over the last seven months, and spend virtually no time with the wife.  The wife did not dispute that approach.

The husband’s proposal

1. The husband proposed orders as follows:

   (1)Both parties forthwith and not later than seven days after the date of these orders take all     necessary steps and execute all necessary documents to cause the matrimonial home at Property W Certificate of Title Volume (omitted) Folio (omitted) (the “Real Property”) to be sold by public auction on the following conditions:   

   (a)the auction shall be listed no later than 6 weeks from the date of these Orders;

   (b)Mr J of (omitted) Real Estate (omitted), be appointed as the selling agent;

   (c)Mr A of Land & Property Transfers Conveyancing Services be appointed as the conveyancer to have the conduct of the sale on behalf of both parties and the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;

   (d)the parties be equally responsible for any other amounts that may be required to prepare the property for sale on the recommendation of the selling agent, and co-operate with all reasonable requests of the selling agent with respect to marketing, presentation and availability for inspection of the Real Property;

   (e)the parties shall execute a contract (“the contract”) for sale in the form prepared by the conveyancer having the conduct of the sale at the sale price;

   (f)the reserve price for the sale of the Real Property be set at $1,100,000 or such other price as may be agreed upon in consultation with the selling agent 4 days prior to the auction date, and  failing agreement, determined by a representative of the Real Estate Institute of Victoria;

   (g)within 14 days of the date of sale, the parties shall do all such things and acts necessary to secure an early release of  deposit monies and the deposit monies, net of payment of the agent’s commission, advertising expenses and legal expenses of the sale, shall be divided equally between the parties;

   (h)The balance of proceeds of sale be applied as follows:

   (i)          Firstly, to pay all costs and commissions of the sale;

   (ii)     Secondly, to discharge the mortgage to the (omitted) Bank;

   (iii)   Thirdly, the sum of $40,000 to Mr K and Ms B;

   (iv)    Fourthly, the sum of $35,000 to Mr J; and

   (v)     Fifth – the balance to be divided between the parties such as to effect a division of assets between them, as to the Applicant 45% and to the Respondent 55%; with a further adjustment of:

   A.the amount of $2,255 from the Respondent’s share to the Applicant  (being one half of the mediation costs); and

   B.payment of any outstanding council rates, water rates, insurance and utilities from the Respondent’s share.

   (2)In the event the respondent fails within the seven days referred to in paragraph 1 (including but not limited to preliminary contract, transfer, discharge or mortgage or final contract of sale) pursuant to Section 106A of the Family Law Act 1975 the Registrar of the Federal Circuit Court of Australia be and is hereby appointed to execute any deed or instrument and do all acts and things necessary in the name of the Respondent to give effect to the completion of Contract of Sale of the property known as Property W Victoria (omitted) and more particularly described in Certificate of Title Volume (omitted) Folio (omitted), and any other Order made this day.

   (3)     Pending the settlement of the sale of the property:

   (a)The Respondent have the sole right to occupy the Real Property;

   (b)The Applicant make payment of the (omitted) Bank mortgage loan in the sum of $300 per week;

   (c)The Respondent be responsible for payment of all outgoings relating to that property including but not limited to Council rates, Water rates, insurances and utilities; and

   (d)neither party shall further encumber the Real Property

   (4)In accordance with paragraph 90MT(1)(a) of the Family Law Act 1975 (as amended) whenever a splittable payment becomes payable to the Applicant from his interest in the (omitted) Superannuation Plan (Member number (omitted)), the Respondent is entitled to be paid into a fund of her choice an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $57,756, and there be a corresponding reduction in the entitlement of the Applicant to whom a payment would have been made but for these orders.

   (5)That the Applicant be restrained by himself his servants or agents from making any binding death benefit nomination to the trustees of the (omitted) Superannuation Plan in favour of any person or doing any act or thing which would render any part of his interest a “non-splittable payment” or in any way diminish the value to the Respondent of the splitting order made herein.

   (6)These orders are binding on the trustees of the (omitted) Superannuation Plan the fund having been accorded procedural fairness in relation to this order and the fund will observe the requirements of the Family Law Act 1975 (as amended) and the Family Law (Superannuation) Regulations 2001.

   (7)That order 4 has effect from the operative date.

   (8)The operative date for this order is 4 working days after the service of a sealed copy of these orders upon the trustee.

   (9)Each party and the trustee have liberty to apply in relation to the implementation of the orders affecting the superannuation interest.

   (10)The member spouse is the Applicant.

   (11)The non- member spouse is the Respondent.

   (12)That unless otherwise specified in these Orders and except for the purposes of enforcing the payment of any money due under these or any subsequent Orders:

   (a)each party 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.  All the chattels in the matrimonial home are considered to be in the possession of the Respondent save for the tools and 3 motor cycles in the shed;

   (b)money standing to the credit of the parties in any joint bank account is to be shared equally between the parties and all joint bank accounts be forthwith closed;

   (c)each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other;

   (d)all insurance policies to become the sole property of the owner thereof;

   (e)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders;

   (f)any joint tenancy of the parties in any real or personal estate is hereby expressly severed; and

   (g)The Respondent be solely responsible for payment of her Centrelink debt of $2000 and her debt to MR F of $4,000.

   (13)That pending the sale of the Real Property:

   (a)the parties within 7 days make application to the (omitted) Bank to reduce the mortgage loan repayment until settlement of the sale to either reduce the payments, or to suspend the payments, and the Respondent do all such acts and things and sign all such documents to comply with this Order; and

   (b)the Respondent keep the Real Property in a clean and tidy condition.

The wife’s proposal

1. The wife proposed that:

   1.[The] division of property and assets is assessed without judicial process other than the requirement of a fair distribution of superannuation amounts.

   2.A small investment property is purchased [by the husband] and [the wife] on which “rent” is paid and tenanted either by [the wife] or [the husband].

   3.[The husband] be responsible for the mortgage amounts on the house and [the wife] take responsibility for “rent” on the above property.

Orders by consent or without opposition

1. The parties agreed to orders on 20 March 2017 as follows:

   1.By 5pm on 21 March 2017, the husband provide to the wife a list of the tools that he wishes to collect from the shed.

   2.By 5pm on 25 March 2017, the husband collect his paintings and the tools in the list from the shed, and the wife permit him to do so at any reasonable time by written agreement.

   3.The husband be solely entitled to the exclusion of the wife to the tools collected by him.

   4.Within four weeks of a written request from the wife, the husband deliver to the wife the (omitted) motorcycle and its parts on a date and at a place within the Melbourne metropolitan area to be agreed in writing.

   5.The wife be solely entitled to the exclusion of the husband the (omitted) motorcycle and its parts.

   6.Within eight weeks, the husband collect from the wife the three other motorcycles.

   7.The husband be entitled solely to the three other motorcycles and their parts.

1. The parties had not obtained any sworn valuations of the tools, motorcycles, or paintings.  They did not wish to sell them.  It was, in effect, agreed that the tools, motorcycles and paintings should be divided and treated as having a neutral value.  The parties each wished to keep their own car.

2. In addition, the wife did not express any disagreement with the husband’s proposal for an equalisation of superannuation.  The wife had some reservations about Mr J being the real estate agent, because he is an associate of the husband’s but did not propose anyone else. 

3. There was some discussion about the mortgage repayments pending the sale of the property.  The husband initially proposed that the husband and wife each pay $300 per week on the mortgage, as they had done immediately after separation.  However, the wife said that she was having difficulty paying the $300 per week.  Consequently, the husband agreed to continue paying $300 per week, and agreed to an application being made to the bank to reduce the mortgage repayments pending the sale of the property.

4. Otherwise, the wife’s only issue with the husband’s proposal was that she wanted the sale of the former family home to be delayed by five years.

The legislation

1. Section 90RD of the Act permits the court to make a declaration that a de facto relationship existed between two persons. Under s.90RG of the Act, the court is only permitted to make such a declaration if it is satisfied that one or both of the persons were ordinarily resident in a participating jurisdiction when the primary proceedings commenced. There was no dispute about this issue. On the material before the court, I am satisfied that the applicant and the respondent were both ordinarily resident in a participating jurisdiction when the primary proceedings commenced.

2. Under s.90SB of the Act, the court may only make an order under s.90SM if the court is satisfied that:

   a)the period or the total periods of the de facto relationship were at least two years; or

   b)there is a child of the de facto relationship; or

   c)the applicant made substantial contributions of the kind mentioned in s.90SM(4)(a), (b) or (c) and a failure to make an order under s.90SM would result in serious injustice to the applicant; or

   d)the relationship is or was registered under a prescribed law of a State or Territory.

3. In the present case, the husband and wife agree that they were in a de facto relationship for more than two years. In fact, on the wife’s case they commenced cohabitation in 1993 and on the husband’s case they commenced cohabitation in 1998. The husband and wife agreed that they separated in March 2015. That means that the relationship lasted either 22 years or 17 years. The husband and wife also agree that there are three children of the relationship. Consequently, the court is able to make orders under s.90SM of the act.

4. Section 90SM of the Act gives the court power to alter the interests of the parties to a de facto relationship in the property of those parties following the breakdown of their relationship. Sub-section 90SM(3) of the Act provides that:

   The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

5. Section 90SM(4) of the Act sets out the matters the court must take into account when considering what orders, if any, should be made for the alteration of the interests of the parties in property. Those matters are:

   (a)the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:

   (i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or

   (ii)otherwise in relation to any of that last-mentioned property;

   whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and

   (b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:

   (i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or

   (ii)otherwise in relation to any of that last-mentioned property;

   whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and

   (c)the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and

   (d)the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and

   (e)the matters referred to in subsection 90SF(3) so far as they are relevant; and

   (f)any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and

   (g)any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.

6. The matters to be taken into account under s.90SF(3) of the Act are:

   (a)the age and state of health of each of the parties to the de facto relationship …; and

   (b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and

   (c)whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and

   (d)commitments of each of the parties that are necessary to enable the party to support:

   (i)himself or herself; and

   (ii)a child or another person that the party has a duty to maintain; and

   (e)the responsibilities of either party to support any other person; and

   (f)subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:

   (i)any law of the Commonwealth, of a State or Territory or of another country; or

   (ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

   and the rate of any such pension, allowance or benefit being paid to either party; and

   (g)a standard of living that in all the circumstances is reasonable; and

   (h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and

   (i)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and

   (j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and

   (k)the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and

   (l)the need to protect a party who wishes to continue that party's role as a parent; and

   (m)if either party is cohabiting with another person – the financial circumstances relating to the cohabitation; and

   (n)the terms of any order made or proposed to be made under section 90SM in relation to:

   (i)the property of the parties; or

   (ii)vested bankruptcy property in relation to a bankrupt party; and

   (o)the terms of any order or declaration made, or proposed to be made, under this Part in relation to:

   (i)a party to the subject de facto relationship (in relation to another de facto relationship); or

   (ii)a person who is a party to another de facto relationship with a party to the subject de facto relationship; or

   (iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or

   (iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and

   (p)the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:

   (i)a party to the subject de facto relationship; or

   (ii)a person who is a party to a marriage with a party to the subject de facto relationship; or

   (iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or

   (iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and

   (q)any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and

   (r)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and

   (s)the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and

   (t)the terms of any financial agreement that is binding on a party to the subject de facto relationship.

The approach to applications under s.90SM

1. In Stanford v Stanford (2012) 247 CLR 108; (2012) 293 ALR 70; (2012) 87 ALJR 74; (2012) 47 Fam LR 481; (2012) FLC 93-518; [2012] HCA 52, the High Court explained the proper approach to an application under s.79 of the Act. Section 90SM mirrors s.79, except that it applies to de facto relationships. Accordingly, Stanford is applicable to the present proceedings. In Stanford, the High Court said the following:

   37.First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. … The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.

   38.Secondly, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed that a power to make such order with respect to property and costs “as [the judge] thinks fit”, in any question between husband and wife as to the title to or possession of property, is a power which “rests upon the law and not upon judicial discretion”. …(footnotes omitted)

   39.Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is “just and equitable” to make the order is not to be answered by assuming that the parties' rights to or interests in marital property are or should be different from those that then exist. All the more is that so when it is recognised that s 79 of the Act must be applied keeping in mind that “[c]ommunity of ownership arising from marriage has no place in the common law”. Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be “decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses”. The question presented by s 79 is whether those rights and interests should be altered. (footnotes omitted)

   40.Thirdly, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable" only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act. (footnotes omitted)

   …

   42.In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4). (footnotes omitted)

The four step approach

1. In In the Marriage of Hickey, Re (2003) 30 Fam LR 355; (2003) FLC 93-143; [2003] FamCA 395 at [39], the Full Court of the Family Court described the preferred four step approach in property matters as follows:

   The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. 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 of the case ….

2. In the light of the High Court’s decision in Stanford, it seems that the basic steps stated in Hickey remain correct.  That is, the court is required to:

   a)identify the assets owned by the parties, jointly or separately, and the liabilities to which the parties are subject, jointly or separately;

   b)take into account the contributions made by each party;

   c)take into account the so called “future factors”; and then

   d)determine what order, if any, is just and equitable.

STEP 1: The assets and liabilities

1. The parties agreed that their only joint asset at the time of trial was the former family home with a valuation as follows: 

Joint Assets	Value
Property W Victoria	$1,150,000
Total joint assets	$1,150,000

1. The parties agreed that their joint liabilities the time of trial were as follows:

Joint Liabilities	Value
(omitted) Bank Mortgage	$390,000
Personal loan to the husband’s parents, Ms B and Mr K	$40,000
Personal loan to Mr J	$35,000
Arrears of rates	$800
Total joint liabilities	$465,800
Joint total assets less liabilities	$684,200

1. The parties agreed that the wife’s individual assets at the time of trial were as follows: 

Wife’s Assets	Value
Nissan (omitted)	$15,000
Household contents	Minimal
Wife’s savings	Minimal
Wife’s total assets	$15,000

1. The parties agreed that the wife’s superannuation was as follows:

Wife’s superannuation	Value
Wife’s superannuation with (omitted)	$8,000
Wife’s total assets plus superannuation	$23,000

1. The parties agreed that the wife’s individual liabilities at the time of trial were as follows: 

Wife’s liabilities	Value
HECS loan	$9,000
Centrelink debt	$2,000
Loan from son Mr F	$4,000
Wife’s total liabilities	$15,000
Wife’s total assets plus superannuation less liabilities	$8,000

1. The parties agreed that the husband’s individual assets at the time of trial were as follows: 

Husband’s Assets	Value
Toyota (omitted)	$2,000
Savings	Minimal
Husband’s total assets	$2,000

1. The parties agreed that the husband’s superannuation at the time of trial was as follows:

Husband’s superannuation	Value
Husband’s superannuation with (omitted)	$20,545.83
Husband’s superannuation with (omitted) Super	$102,968.30
Husband’s total assets plus superannuation	$125,514.13

1. The parties agreed that the husband had no individual liabilities at the time of trial.

Husband’s total assets plus superannuation less liabilities $125,514.13

1. The wife’s assets plus superannuation less liabilities have an agreed value of $8,000.  The husband’s assets plus superannuation less liabilities have an agreed value of $125,514.13. The parties’ joint assets less liabilities have an agreed value of $684,200. The combined total of their assets, including joint assets and liabilities, is therefore $817,714.13. 

Contributions

1. The parties agreed that, overall, their contributions were equal, although at different times the husband or the wife contributed more financially. The parties were in agreement that the wife was the primary carer of the children until August 2016. There was some disagreement about the details, but, as I have said, the parties agreed that overall their contributions were equal. Consequently, it is unnecessary for the court to determine the details.

a.         Initial contributions

1. The parties agreed that they had no substantial contributions at the commencement of cohabitation, whether it was in 1993 or 1998.  However, the wife maintained that she and the husband commenced cohabitation in 1993 in her accommodation and that she supported the husband for the following two years. She said that the husband was in jail from 1995 until 1998 following a conviction for culpable driving. She said that, while the husband was in jail, she went overseas for part of the time but otherwise emotionally supported the husband in jail.

b.         Contributions during the relationship:

1. The wife said that, when husband was released from prison, she assisted him financially to become a partner in a (business omitted). The husband conducted that business for a couple of years without any great financial success. His share was sold to the other partner for $15,000 in about the year 2000.  The husband later obtained regular employment.  He now earns about $140,000 per year.

1. After the first child was born in 2001, the wife did not work until 2011. Between 2011 and 2013, the wife worked as a casual at (employer omitted) earning about $400 per week. The wife is now on Newstart allowance.

2. The parties agreed that the husband’s parents gave them a loan of $40,000 to assist in the purchase of their first home. The parties agreed that a friend, Mr J, gave them a further loan of $35,000 to assist in the purchase of another home. The parties agreed that both of those loans remain outstanding.

c.         Contributions post separation

1. Following separation in March 2015, the wife has remained in the former matrimonial home. From March 2015 until August 2016, the children lived with the wife in the former family home.

2. From separation until about August 2016, the husband and wife each paid $300 per week for the mortgage over the former family home. The husband has continued to do that, however the wife has not.

3. Post-separation, the wife has borrowed $4,000 from the parties’ son, Mr F. He is still a child. However, the wife is the trustee of a trust account that she holds on behalf of Mr F. She has borrowed money from that trust account contrary to her obligations as a trustee.  The wife has also accrued a Centrelink debt of about $2,000 and has some outstanding bills in relation to the former family home.

The s.90SM(4)(d), (e), (f) and (g) and the s.90SF(3) factors

1. The husband is about 37 years old. The wife is about 45 years old. The husband earns about $140,000 per year.  The wife is currently unemployed and is receipt of Newstart allowance.  However, she considers that she could earn about $25,000 per year or perhaps $40,000 per year.

2. The children of the relationship have been in the care of the husband since August 2016.  As no parenting application has been filed, and as there was no indication given to the court that either party proposes to file a parenting application, the court must proceed on the basis that the children will remain in the husband’s care. The children are aged 15, 13 and nine years old.

3. Neither party has any particular commitments or other people to maintain. The wife is eligible for Newstart allowance. A modest standard of living for each party would be reasonable in all the circumstances of this case. There seems little likelihood that the wife will pay any significant amount of child support. The other matters under s.90SF(3) of the Act were not suggested to be relevant.

Whether it is just and equitable to alter the parties’ property interests

1. The parties agreed that it would be just and equitable to alter their property interests in this case.  In view of paragraph 42 of Stanford, the fact that the parties are no longer living in a de facto relationship and the various findings made above in relation to contributions and future needs, I also consider that it would be just and equitable to alter the parties’ property interests in this case. 

What order is just and equitable?

1. The only substantial issue in this case is whether the former family home should be sold immediately or in five years’ time. Pursuant to s.81 of the Act, the court is obliged to make orders that will:

   … finally determine the financial relationship between the parties to the marriage …

2. It is implicit in that requirement that the court make orders that will finally determine the financial relationship between the parties in a reasonable timeframe. The wife’s proposal is for an ongoing financial relationship between the parties for five years. In that time, the wife proposes that the husband and wife will share residence in the former family home and in a small investment property, with the husband paying the mortgage on the former family home and the wife paying the rent on the small investment property. That proposal is not consistent with the requirements of s.81 of the Act.

3. While the court does have power to adjourn proceedings in certain circumstances, there is nothing in the circumstances of this case that would warrant a lengthy adjournment.  Nor was an adjournment sought.

4. It seems to me, in all the circumstances of this case, that the husband’s proposal for an immediate sale should be accepted.  The wife was not opposed to the mechanics proposed by the husband.  There should be orders largely in the terms he has proposed.

5. In regards to the division of property, it seems to me that it is just and equitable that:

   a)there be an equalisation of superannuation;

   b)the former family home be sold and the proceeds be divided 55:45 in favour of the wife, after discharge of joint debts and expenses;

   c)each party keep the items that they have agreed to keep, as well as their cars; and

   d)the wife be responsible for her own debts. 

6. The adjustment in favour of the wife reflects an adjustment of 10% of the value of the former family home to her because of the earning differential between the parties, less an adjustment of 5% of the former family home to the husband because the children are in his care.

7. In all the circumstances of this case, it seems to me to be just and equitable that there be orders largely as the husband ultimately proposed.

I certify that the preceding fifty (50) paragraphs are a true copy of the reasons for judgment of Judge Riley

Date: 12 April 2017