Kirby and Kirby
[2009] FMCAfam 162
•30 January 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KIRBY & KIRBY | [2009] FMCAfam 162 |
| FAMILY LAW – Property – non-disclosure of financial information – financial and non-financial contributions to the marriage. |
| Family Law Act 1975, ss.79, 75(2) |
| Kowaliw v Kowaliw (1981) FLC 91–092 |
| Applicant: | MS KIRBY |
| Respondent: | MR KIRBY |
| File Number: | DGC 4647 of 2007 |
| Judgment of: | Connolly FM |
| Hearing dates: | 15 September, 1 & 29 October & 1 December 2008 |
| Date of Last Submission: | 1 December 2008 |
| Delivered at: | Melbourne |
| Delivered on: | 30 January 2009 |
REPRESENTATION
| Counsel for the Applicant: | Ms. MacMillan |
| Solicitors for the Applicant: | Belleli King & Associates |
| Counsel for the Respondent: | In Person |
ORDERS
That the child [X] born in 1996 spend time and communicate with the Husband as agreed between the parties.
That on or before the 28th February 2009 (“the date”), the Husband pay to the Wife the sum of $238,056 (“the payment”) as follows:
(a)That the Husband forthwith do all acts and things and sign all documents to authorise payment to the Wife of the proceeds of sale of shares in the sum of $134,277 (“part payment”);
(b)That in the event the whole of the payment has not been made by the date, the Husband do all acts and sign all documents necessary to forthwith place the property known as and situate at Property E in the State of Victoria (“the real property”) on the market for sale and the said property be forthwith sold altogether out of Court and upon completion of the sale, the proceeds of sale be applied as follows:
(i)firstly, to pay all costs, commissions and expenses of the sale;
(ii)secondly, to discharge the mortgage or any other encumbrance affecting the real property;
(iii)thirdly, so much of the payment as is then outstanding, together with interest therein at the rate of 11.75% per annum, adjusted monthly from the date, to the Wife;
(iv)fourthly, the balance to the Husband.
That pending the payment or completion of the sale of the real property:
(a)The Husband have the sole right to occupy the real property and during such right of occupation, the Husband pay all instalments pursuant to the mortgage and all rates and taxes and like apportionable outgoings of the real property as they fall due;
(b)The parties hold their respective interests in the real property upon trust pursuant to these Orders; and
(c)Neither party encumber, dispose of or otherwise deal with the real property without the consent in writing or the other party.
That unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or any subsequent Orders:
(a)Each party be solely entitled, to the exclusion of the other to all other property (including choses in action) in the possession of each party (the fixtures, personal possessions and like chattels in the real property be deemed to be in the possession of the Husband);
(b)Each party forego any claims to any superannuation benefits belonging to or earned by the other.
That in the event that the Husband fails to do all acts or things or execute any document required to give effect to these Orders within
7 days of a request in writing to do so, the Registrar of the Federal Magistrates Court of Australia at Melbourne be authorised to execute all such documents and do all things necessary to give effect to these Orders.
That otherwise all extant Applications be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Kirby & Kirby is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
DGC 4647 of 2007
| MS KIRBY |
Applicant
And
| MR KIRBY |
Respondent
REASONS FOR JUDGMENT
The proceedings
This judgment arises from the parties competing property applications. The Wife initially instituted these proceedings in the Court at Dandenong on the 16th November 2007 seeking as an Order that the child, [X], born in 1996 live with the Wife and that there be a property settlement in such terms that the Court deems appropriate. She also sought an Order that she be excused from further particularising her claim pending discovery. The Respondent Husband filed a Response on the 23rd January 2008 seeking Orders that the child spend time with and communicate with the Husband as agreed between the parties and otherwise that the Wife’s Application for property settlement be dismissed. By the time the trial commenced on the 15th September 2008, the Wife, through her Counsel, indicated that she was seeking a payment of $227,500 which represented a 70/30 split in her favour. The Husband’s position was that he was prepared to pay the Wife $137,500 which represented 50% of the net equity in the matrimonial home after deducting the mortgage. The parties agreed that the only Order that should be made with respect to the child was that he spend time and communicate with the Husband as agreed between the parties. There was already an Order in existence that the child live with the Wife.
The parties further amended their oral applications with respect to property in final addresses. The Wife sought an Order that the Husband pay her the sum of $274,733 being 75% of the net proceeds of the parties’ assets. The Husband said $183,000 approximately was the appropriate amount, being half of the agreed pool.
The documents
a)The documents relied upon by the wife are as follows:
i)her Application filed on the 16th November 2007;
ii)her Affidavit sworn on the 15th November 2007 and filed on the 16th November 2007;
iii)her Financial Statement sworn on the 3rd April 2008 and filed on the 8th April 2008;
iv)her Further Affidavit sworn on the 10th September 2008 and filed on the 11th September 2008;
v)the Affidavit of Mr B sworn on the 28th October 2008 and filed in Court on the 29th October 2008;
vi)the Affidavit of Ms W sworn on the 1st December 2008 and filed on the 1st December 2008.
b)The documents relied upon by the Husband are as follows:
i)his Response filed the 23rd January 2008;
ii)his Affidavit sworn on the 18th January 2008 and filed on the 23rd January 2008;
iii)his Financial Statement sworn on the 28th February 2008 and filed on the 28th February 2008.
c)Each party also gave oral evidence and there were a number of values of specific assets that the parties agreed upon.
The history
The Husband was born in 1955 and is now 54 years of age. He is a [occupation omitted] and lives at Property E a property registered in his name in which the parties lived during the marriage. He is employed at [S] Pty Ltd where he earns $856.00 per week gross, according to his Statement of Financial Circumstances. The Wife was born in 1960 and is now 48 years of age. She lives with the child of the marriage, [X], aged 12, at Property P which is rental accommodation. She works part time with [W] Pty Ltd and earns $150 per week in wages and receives $358 from the single parents’ payment, according to her Financial Statement.
The parties first cohabitated, according to the Wife, in about May 1992 and on the Husband’s account, the Wife moved into his house in 1994, but at that time there was no romantic association. “She simply needed a place to stay.” The parties married in October 1995 and have one child, [X], born in 1996. The Wife says that she separated in April 1999 when she obtained a Child Support Assessment and Interim Orders for residence and a Watch List Order on the 25th May 1999. After that, she says there were a number of reconciliations before they finally separated in early 2001. The Husband says that the relationship was only about two years and that the Wife left the relationship in 1997 or 1998. He says that she lived in the back room for some time and he made this available to her to provide some protection for her and the child. The Wife says that she gave birth to a second child who was still born at the [omitted] Hospital in March 2002. The Husband denied that this child was his and denied the Wife’s allegation that he was abusive when he visited the hospital.
The Wife says that she was employed at the commencement of the relationship [in the beauty industry]. The Husband says she was unemployed at the commencement of the relationship and only obtained work [in the beauty industry] after the marriage. He was employed as a [occupation omitted] when they married, in a similar position in which he now works, but with a different company. The Husband says the Wife came into the marriage with a number of debts arising from a gambling addiction. The Wife denied the gambling addiction and the debts but does not claim to have brought any assets into the marriage. The Husband owned two properties prior to cohabitation; the vacant land at Property E and the house in which the parties then lived at Property R. There were monies owing on a mortgage. The Husband also had a superannuation entitlement from the job he was then employed in, although there is no evidence as to how much the entitlement amounted to.
During the time the parties lived together the Husband continued in the same employment at a similar rate of earnings. The Wife was employed, for at least some of the time, [in the beauty industry], although there is no evidence of her rate of earnings during this time. She says that she was responsible for the parties living expenses and the Husband’s funds were used to reduce the mortgage. The Husband denies that the Wife made any financial contribution until after they were married when she worked [in the beauty industry]. What is not in issue is that the Wife was the primary caretaker of the child and was responsible for the domestic chores whilst the Husband was working long hours, up to 7 days a week.
The Husband’s property at Property E was used to construct a house on in 1996. The agreed value of the property as a vacant lot in 1993 was $40,000. It is now valued at $325,000. The house at Property R was sold in December 1998 and the Husband received $13,026.15 after payment of the mortgage of $80,623.65 and various costs. There is no evidence as to the cost of the construction of the new home nor which property was used as security for the funding of the construction. The Husband also received the deposit of $10,500 less whatever agent’s commission was payable. The Husband also loaned $20,000 to a friend of the Wife’s who was the best man at their wedding. At least $11,000 of those funds were repaid to the Wife and she is silent as to what she did with that amount.
Following separation the Husband remained living at the property at Property E and has continued to work at much the same level. The Wife has lived in various rented properties. There was a Child Support Assessment in April 1999. The payments were collected only for a very short time. The Wife says that she felt forced to tell the Child Support Agency that she received the payments direct to protect herself, her parents and the child because of the Husband’s threatening behaviour to her after his wage was garnished by the Agency. He says the suspension occurred because the Wife wanted to receive the payments direct. In 2002 she applied for and obtained an exemption from the requirement to obtain Child Support and was able to seek Centrelink payments in full. On the 22nd May 1999 in the Family Court, the Wife obtained Orders that the child live with her and that the Husband have such contact as is agreed. There was also an Airport Watch List Order. These Orders were made in the Husband’s absence and remain in full force and effect. Since the parties separated there is a dispute about the time the child has spent with his father, although it is clear that he has had no contact in recent years, probably since 2002, and the Wife has been solely responsible for the child during that time.
These proceedings were commenced by the Wife in November of 2007 although she filed a caveat in respect of the property in Property E many years earlier. Orders were made on the 29th January 2008 for a Conciliation Conference as well as certain Orders with respect to the child. Further Orders were then made on the 6th March 2008 following the Conciliation Conference for valuations and for each of the parties to provide certain documents. It would appear that neither party complied with these Orders in full by the time the trial commenced on the 15th September 2008. Ultimately, the matter was heard over a period of four (4) days, at least in part because further information needed to be provided and documents subpoenaed.
The law
The determination of an Application pursuant to section 79 of the Family Law Act 1975 involves firstly, identifying the property, liabilities and financial resources of the parties; secondly, evaluating the contributions made by the parties at the time of the hearing as defined in section 79(a), (b) and (c) of the Family Law Act 1975; thirdly, evaluating the matters in section 75(2) of the Family Law Act 1975 as far as they are relevant; and fourthly, in determining what Order should be made under section 79, the Court must be satisfied that it is just and equitable to do so.
Conclusions and findings
The parties agreed that the property, financial resources and superannuation entitlements are as follows:
Assets
Property E in the Husband’s name $325,000 2004 Holden car in the Husband’s name $9,000 Proceeds from the sale of shares $134,277 Husband’s superannuation $3,197 Total assets: $471,474
Liabilities
St George home loan in the Husband’s name $44,742 Credit Union Australia loan in the Wife’s name $500 The Husband’s tax liability $59,992 Total liabilities: $105,234
Net assets: $366,240 In determining the liabilities, I have included only the tax liability and not the interest and penalties that have been imposed for not lodging the returns, or lodging them very late. I agree with the submission of Counsel for the Wife, Ms MacMillan, that the Wife should not be responsible for what was the Husband’s decision.
Each of the parties have provided evidence that is conflicting, and at times clearly untruthful. The Husband displayed a marked lack of preparedness to provide information and documents, although that reluctance has not necessarily worked to his advantage. While some of the Wife’s testimony may be seen in light of her imperfect recall, given the fact that the events occurred some very significant time ago, there are, however, a number of matters that she deposes to that are in conflict. It is difficult in these circumstances to make factual findings with any degree of certainty.
With respect to the issues of when the parties first commenced cohabitation, the Wife says that occurred in May 1992. Yet in her first Affidavit she says they met during Christmas 1992 and in April or May 1992 they started living together after dating for some time. The Husband’s Affidavit states they met at Christmas in 1993 and she moved into his house about a year later. The Wife in her second Affidavit says that they met in Christmas 1991 and moved in together in 1992. The Husband’s evidence was that they met at a Christmas party held at his then girlfriend’s parents place. The Wife, in cross examination then said that they did meet at Ms G's parent’s Christmas party, but that was very much earlier and it was not the first time that she had met him. I found her evidence confusing and unhelpful. The Husband, on the other hand, who says they first lived together in 1994, when asked to put whatever questions he wanted to to the Wife about when they started dating or courting, said “We never dated, there is no courtship, there is no love” and then provided some implausible responses as to why they married. It seems to me most likely they met as the Wife initially says at Christmas in 1992 and started living together sometime in 1993.
The evidence about when they separated is also unconvincing. The Wife, in her first Affidavit says that she and the child left the former matrimonial home in 1999, and then in her second Affidavit she says that she left in approximately December 1998 when she went to live with Mrs M and this was the first time she and the Husband separated. In her oral evidence in chief she says that was a mistake and that she left in April 1999. She provided no reason for the discrepancy or the conflicting evidence. It is however clear that she obtained a Child Support assessment in April 1999 and Orders in the Family Court at Dandenong in May of 1999. The Husband says in his Affidavit that they separated in late 1997, although his oral evidence about the length of the marriage is quite extraordinary when he says that there was no relationship. The Wife gave further confusing evidence about the reconciliations that took place after the initial separation. She said that the first reconciliation was from the end of 1999 until early 2001. In other evidence she says that the first reconciliation lasted 10 months. Her evidence of the second reconciliation is that it was from the end of 2001 until January of 2002. None of that evidence is consistent with the fact that she says she gave birth to a child of their relationship in March of 2002. Her evidence about the nature of the relationship with the Father following the initial separation is also difficult to understand. In paragraphs 30, 31 and 32 of her first Affidavit, she says as follows:
a.I therefore advised the CSA and tell them that I was in fact receiving payments direct from the Respondent Father. This was an avenue that I thought would ensure that my parents were safe and that the Respondent Father would leave us in peace.
31.The threats of violence that were made towards me and the child by the Respondent Father forced me to move from house to house over the next two years in an effort to avoid the Respondent Father. I was not receiving any financial support and I was too afraid to ask anyone for assistance.
32.My depression deteriorated, life was very difficult and the child and I would move from one place to another and each time we were placed in dangerous situations by the Respondent Father. The last house that we had was so bad that on one occasion the child and I were taken hostage and knifepoint and were held for 18 hours. This was the turning point because it was then that I realised I could not handle the situation by myself.”
Yet that document, marked “LK 2” and attached to her second Affidavit, makes it abundantly clear that the hostage situation which occurred in January 2001, when she and the child were held at knifepoint, had absolutely nothing to do with the Husband.
Indeed, when questioned about returning to live with the Husband because she had no place to live, or, the places she lived in had a lot of violence, she responded
“That was only on the absolute last reconciliation attempt”
and then
“There was an incident that we were involved in, my son and I”
and when asked
“Is this the incident you refer to as being held hostage?”
“Yes sir, and it was only during the time when my son came out of hospital and we just needed a place to stay for a few days.”
She was further asked
“Are you saying that this was the last reconciliation?”
“Yes.”
In my view, this evidence supports what the Husband says about permitting the Wife to have somewhere to live for her protection and for that of the child, rather than supporting the Wife’s contention that there was a reconciliation or reconciliations. The evidence is at odds with the proposition that the Wife was fearful of the Husband, and indeed, in her Affidavit evidence, provides no detail of any allegation of violence towards her during their relationship. Further, I am satisfied that the parties separated in late 1998, or in the first half of 1999 and that there was no attempt at reconciliations that followed, albeit that the Wife and child lived at the Husband’s back room on a number of occasions. The relationship lasted between 5 and 6 years. Further, I accept the Husband’s evidence that she moved from house to house as a result of violent behaviour and because of several debt collectors who were chasing her for payments.
It is also very difficult to determine who is telling the truth about the issue of child support and its payment. The assessment was made in April 1999 and according to both parties was only paid to the agency for a short period of time. As I have already indicated, I am not satisfied that the Wife had any real fear of the Husband, it may well be she initially arranged for the suspension of payments because the Husband was paying her direct, or providing her with accommodation and support. She certainly told the Child Support Agency that she was receiving the payments direct. However, the evidence is sufficiently convincing to establish that by 2002 at the latest, the Husband was no longer providing any support and it is at that stage that she applied for an exemption from the requirement to pursue her Child Support. I am satisfied that it is highly unlikely that the Husband provided any support or direct financial payments in the last 6 years. I am also satisfied that the Husband has had little or no contact with his son for over 4 years. The Husband concedes this in his Affidavit. He says:
“I regret not playing a major part in my child’s life, however circumstances have made it difficult for me.”
The Wife says that during the time they lived together she paid for their living expenses and the Husband was able to direct his income to reducing the mortgage. The Wife’s lack of detailed evidence about her earnings during this time does nothing to support the contention that she made any substantial financial contribution during the period of time they lived together. She had not acquired any assets prior to cohabitation, nor since separation. These factors are far more supportive of what the Husband says about her unemployment at the time they were married, her indebtedness and gambling addiction. Finally, it is of some note that the Wife has not complied with the Order of the 6th March 2008 which required the Wife to provide to the Husband records relating to Centrelink benefits and the years in which she received them, or indeed other financial documentation which might have thrown some light on her financial position at relevant times.
Counsel for the Wife quite properly was critical of the Husband’s reluctance to disclose financial information. Despite the March Orders and a number of requests from the Wife’s practitioners, the Husband was less than forthcoming about providing the required financial documentation. However, I am not satisfied that these non-disclosures were necessarily to his advantage. The fact that he had failed to file tax returns for a number of years and failed initially to disclose that fact to the Court, could well have left the Court in the dark about what is substantial tax liability on the part of the Husband. The lack of detail about his superannuation entitlements and when it was accumulated means it is impossible to make an assessment of exactly how much was accumulated during the course of the marriage, and how much was accumulated outside of the marriage. The lack of information with respect to the mortgage and construction of the house, again, has not been helpful to the Husband’s cause. It is not clear what monies were used to construct the new dwelling at Property E and what amount was borrowed against which property. If funds were borrowed against the Property R property for the construction of Property E, the Husband may well have had a greater equity in that property than the $20,000 suggested. Certainly, if monies had been borrowed for the construction of the Property E property using the Property R property as security, then it would have provided an alternative explanation for the fact that at the time of separation there was almost nothing owing on the mortgage on Property E. Further, the Husband did not provide the Court with any details of the monies used to fund the share acquisition apart from those funds of approximately $60,000 which came from his rolled over superannuation entitlement. Whether other finds were used during the course of the marriage to fund share acquisitions, I am unable to say. The reality is that the Husband brought into the marriage a vacant block of land at Property E valued at $40,000, approximately $20,000 being the proceeds of the sale of the Property R property; some superannuation and a sum of $20,000 which was loaned to the best man and which $11,000 was repaid to the Wife and for which she fails to account. Further, I am satisfied, as I have already indicated, that the Husband was primarily responsible for the support of the Wife and child during the time that they resided with him, and I am not satisfied that any substantial financial contribution was made by the Wife during that period of time, for the reasons I have already indicated.
On the other hand, it is equally clear that the wife was primarily responsible during the marriage for the domestic chores and the care of [X], given the Husband’s own evidence that he was working 7 days per week, up to 12 hours a day. I am also satisfied that apart from the first couple of years following separation when the Husband provided some accommodation and some direct financial contribution to the Wife and child, that the Wife has been almost entirely responsible for the financial well being of the child, and certainly has also been responsible for his care and wellbeing given that the Husband has had no contact for the last 4 years and only limited contact prior to then. In all of the circumstances I am satisfied that the parties contributions to the marriage are approximately equal. The Husband has contributed directly to the financial acquisition of assets and the Wife by way of homemaker and parent.
Wife’s Counsel argued that I should find that the Husband’s behaviour is selling the shares in breach of the Order on the 1st October 2008 was conduct that was reckless and or wanton and the overall effect has reduced or minimised their value (see Kowaliw v Kowaliw (1981) FLC 91-092). I do not accept that argument. It is clear that the market was fluctuating and the shares had been worth considerably more prior to the sale. The evidence before the Court was that the Husband was not required to sell all of the shares and at least some were sold in breach of the Order. There is no evidence, however, that the sale of the shares at that price caused a loss, nor is there any evidence of the value of the Commonwealth Bank or Westpac shares following the sale. The Wife could have sought to have the shares sold at an earlier time but did not do so. While the Husband breached the Court Order, there is no evidence that he did so with any other purpose in mind than retrieving what he could from an unfortunate situation. I am satisfied that there should be no adjustment with respect to the parties contribution. In my view, the contributions when considered during the marriage and since separation are equal.
With respect to the section 75(2) factors, I agree with Counsel for the Wife’s submission that there should be an adjustment of 15% in the Wife’s favour given the modest size of the pool, the parties respective ages, the fact the Husband is in employment and has a good history as an income earner, and the Wife has limited income earning capacity.
I am satisfied that such an adjustment is appropriate, particularly having regard to the fact that the Wife will be responsible for the ongoing care of [X], with little assistance at all from the Husband, financially or otherwise.
Accordingly, from the pool of assets, the Wife should receive the sum of $238,056 and the Husband the balance. I propose to Order accordingly. I had considered ordering repayment of the funds owing to the tax commissioner, but it may be that the Husband is able to negotiate some reduction in the penalties and interest, and for this reason I do not propose to make such an Order.
In my view, it is just and equitable to make the proposed Order. It provides each party with a modest amount from which to start again and it has regard to the Wife’s lesser income earning capacity and the responsibility that she has for [X]’s care. At the same time, it places the Husband in a position where he has a very modest amount to start again.
Accordingly, I Order as per the terms of the Orders set out herein.
I certify that the preceding twenty four (24) paragraphs are a true copy of the reasons for judgment of Connolly FM
Associate: April Grenquist
Date: 30 January 2009
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