Konig and Konig
[2008] FMCAfam 213
•14 March 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KONIG & KONIG | [2008] FMCAfam 213 |
| FAMILY LAW – Property – valuation of property – parties contributions – section 75(2) factors – just and equitable. |
| Family Law Act 1975 (Cth) ss.72, 74, 75(2), 79(4)(a)-(c) |
| In the Marriage of Omacini (2005) 33 FamLR 134; [2005] FamCA 195 OS v PS [2007] FamCA 1180 |
| Applicant: | MS KONIG |
| Respondent: | MR KONIG |
| File Number: | DNM 484 of 2006 |
| Judgment of: | Lucev FM |
| Hearing dates: | 29 & 30 October 2007 |
| Date of Last Submission: | 30 October 2007 |
| Delivered at: | Sydney (by Scarlett FM by telephone link to Darwin) |
| Delivered on: | 14 March 2008 |
REPRESENTATION
| Counsel for the Applicant: | Ms J Holtham |
| Solicitors for the Applicant: | David Story |
| Respondent: | Self Represented |
ORDERS
(a)That the Husband, Mr Konig, have sole occupancy and exclusive possession of the property at Property H, and pay to the Wife, Ms Konig, the sum of $145,000.00 by 4.00 p.m. on 31 May 2008.
(b)The Wife and Husband do all acts and things required and sign all documents necessary to transfer the Wife’s interest in the property at Property H to the Husband with all expenses associated with the transfer be paid by the Husband and subject to the payment of the sum of $145,000.00 referred to in order 1(a).
If the sum referred to in order 1(a) is not paid by the time therein specified then the property at Property H be sold on the following conditions:
(a)that the property be listed for private sale and the Wife and Husband shall forthwith do all acts and things required and sign all documents necessary to effect a private sale of the property and by way of consequential agreement for the purpose of effecting a sale;
(b)the listing price of the property shall be as agreed between the parties and if there is no agreement then as advised by a valuer nominated by the Chief Executive Officer of the Real Estate Institute of the Northern Territory;
(c)that the property shall be listed for sale by private treaty with such an agent or on such terms as may be agreed between the parties and failing agreement as nominated by the Chief Executive Officer of the Real Estate Institute of the Northern Territory;
(d)
in the event that the property is not sold by or before a date
12 months from the date of this order then either party may give notice to the other in writing that he or she requires the property to be sold by public auction and in that event the property is to be sold by public auction at a reserve price to be agreed upon between the parties or failing agreement as determined by a valuer as agreed between the parties. If the parties cannot agree to a valuer then as appointed by the Chief Executive Officer of The Real Estate Institute of the Northern Territory, and upon the terms and conditions set out in the following paragraphs hereto;
(e)the following terms and conditions apply to the sale by public auction:
(i)The parties shall employ a listing agent for such sale and agree upon a reserve price but failing agreement as determined by a valuer. If the parties cannot agree to a valuer then the valuer shall be as appointed by the Chief Executive Officer of the Real Estate Institute of the Northern Territory.
(ii)The public auction will take place no later than 8 weeks after the notice referred to in subparagraph (d) above.
(iii)Following the first auction sale of the property, if the property does not reach the reserve price and the parties are subsequently unable to agree to the sale of the property it shall be offered again for sale by public auction with no reserve and in default of agreement between the parties in relation hereto, at a date and time agreed between the parties but no more than 6 weeks after the first auction;
(iv)both parties are at liberty to attend the auction and bid in relation to the property; and
(v)payment shall be made from the gross proceeds in the following order:
1. all costs associated with the conduct of the sale, shall be taken as first payment;
2. the sum of $145,000.00 shall be taken as a second payment and paid to the Wife, Ms Konig; and
3. the balance of the proceeds of the sale shall be paid to the Husband, Mr Konig.
That the Husband transfer to the Wife all his right, title and interest in the 2000 Mitsubishi Magna motor vehicle, and that all expenses associated with that transfer be paid by the Husband.
That the Husband is declared the owner of the:
(a)2005 Toyota Landcruiser;
(b)ski boat and equipment;
(c)1995 Mitsubishi Triton;
(d)quadbikes and motorcross trailers,
and the Wife shall forthwith sign all documents necessary in order to transfer to the Husband all her right, title and interest in them and that all expenses associated with any transfer be paid by the Husband.
The Husband is declared the owner of the Business trading as IK, and the Wife is hereby declared to have no interest, either at law or in equity, in that Business.
That the Husband shall indemnify the Wife, and keep her indemnified, from any liability whatsoever or howsoever described or incurred in relation to:
(a)ANZ supplementary loan number 4495-23055;
(b)ANZ home loan; and
(c)the Esanda loan for the 2005 Toyota Landcruiser.
That otherwise each party is entitled to retain all other the property (including superannuation benefits and entitlements) in their possession or control and each party shall be responsible for all liabilities associated with the property they are entitled to retain pursuant to these orders, provided that the household contents (but not the Wife’s personal items such as clothes or jewellery) shall remain at the property at Property H and are hereby declared to be the property of the Husband.
In the event that either party fails or refuses to sign any document or paper necessary to give effect to these orders then pursuant to s.106A of the Family Law Act 1975 a Registrar of the Court is empowered to sign on behalf of the defaulting party upon written notice for the solicitor of the other party that the defaulting party has neglected or refused to sign such document or paper within 14 days of being requested to do so.
That by way of spousal maintenance the Husband pay to the Wife the sum of $150.00 per week for a period of 12 months from the date of this order, provided that such payment cease forthwith if the Wife obtains full time employment.
IT IS NOTED that publication of this judgment under the pseudonym Konig & Konig is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT DARWIN |
DNM 484 of 2006
| MS KONIG |
Applicant
And
| MR KONIG |
Respondent
REASONS FOR JUDGMENT
Introduction
The Applicant Wife was born in 1956. The Respondent was born in 1959.
The Wife and Husband commenced cohabitation in 1988.
The Wife and Husband were married in 1991.
There are 2 children of the marriage, R born in 1992 and J born in 1996.
The parties separated temporarily between March and June of 1996, and then on a final basis on 16 November 2006.
Application and orders sought
The application in this case was originally for orders with respect to parenting, property and spousal maintenance.
Almost 2 hours into the second day of hearing, and after the completion of all of the evidence, the parties reached agreement on parenting orders, and the Court made consent parenting orders.
The remaining orders sought relate to property and spousal maintenance.
The Wife makes application for the following property and spousal maintenance orders:
“(13) That within 28 days of the date hereof, the husband do all things required and sign all documents necessary to discharge all loans held with ANZ bank and Esanda which are held jointly by the parties.
(14) That within 28 days of the date hereof, the husband pay to the wife the necessary sum to ensure that she receives in total, 60% of the available property for distribution.
(15) Upon presentation to him, the husband forthwith sign all documents necessary in order to transfer to the wife all his right, title and interest in the 2000 Mitsubishi Magna motor vehicle.
(16) That otherwise each party is entitled to retain all other property (including superannuation benefits and entitlements) in their possession or control and each party shall be responsible for all liabilities associated with the property they are entitled to retain pursuant to these orders.
(17) In the event that either party fails or refuses to sign any document or paper necessary to give effect to these orders then pursuant to s.106A of the Family Law Act 1975 a Registrar of the Family Court of Australia is empowered to sign on behalf of the defaulting party upon written notice by the solicitor for the other party that the defaulting party has neglected or refused to sign such document or paper within 14 days of being requested to do so.
(18) That by way of spousal maintenance the husband pay to the wife the sum of $150.00 per week for a period of 12 months or until the wife obtains full-time employment, whichever occurs earlier.”[1]
[1] Orders Sought by the Applicant Wife, filed 26 October 2007.
The Husband’s response to the property orders sought is as follows:
“(4) That within 28 days of the date of these orders the husband shall pay the wife $120,000.00.
(5) That the husband is declared owner to the exclusion of the wife of the property situate at Property H and that wife remove any claim that she have at law or in Equity to an interest in the property.
(6) That the husband shall do all acts and things and sign all necessary documents to transfer to the wife at her expense the 2000 Magna Registration 5xxx.
(7) That the husband is declared the owner of the sole trader business IK and the wife remove any claim she may have at law or in Equity.
(8) That the husband is declared the owner of:
a)2005 Toyota Registration 7xxx
b)ski boat
c)1995 Mitsubishi Triton
(9) That the husband shall indemnify the wife and keep her indemnified for:
a)loan to Esanda for 2005 Toyota
b)loan to ANZ for tax
c)line of credit to ANZ
(10) That in the event that … either party refuses or neglects to comply with the provisions … of the order … the Registrar of the Family Court of Australia at Darwin is hereby appointed to execute all deeds and documents in the name of the defaulting party and do all acts and things necessary to give validity and operation to the said order and:
(i) the party in fault is ordered to pay all reasonable solicitor/client costs incurred by the other party for the purpose of enforcing this order.
(11) 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 at this date.
b)each party hereby forgoes any claim that they may have to any superannuation benefit belonging to or owned by the other.
c)all insurance policies to become the sole property of the beneficiary named thereunder.
d)each party be solely liable and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.”[2]
[2] Husband’s Response, filed 18 January 2007.
Principles
In determining a property dispute it is necessary for the Court to:
a)identify and value the net property of the parties (usually at the date of the hearing);
b)consider the contributions of the parties within paragraphs (a)-(c) of s.79(4) of the FL Act;
c)consider the factors under s.75(2) of the FL Act;
d)consider whether the order proposed is just and equitable.[3]
[3] In the Marriage of Omacini (2005) 33 FamLR 134 at 147 per Holden, Warnick and Le Poer Trench JJ; [2005] FamCA 195 at para. 46 per Holden, Warnick and Le Poer Trench.
Valuation of property
The value of assets and liabilities was largely agreed, as follows:
| Property | Ownership | Husband’s Value | Wife’s Value |
| Property H | Husband | $540,000 | $540,000 |
| 2000 Mitsubishi Magna | Joint | $5,000 | $3,000 |
| Quad, ski boat & equipment, motorcross trailers, Triton | Joint | $13,200 | $13,200 |
| Household contents | Joint | $5,000 | $5,000 |
| ANZ bank account | Wife | $7 | $7 |
| ANZ bank account | Husband | $4,000 | $4,000 |
| 800 Telstra T1 shares | Husband | $3,752 | $3,752 |
| 2005 Toyota LC motor vehicle | Husband | $50,000 | $50,000 |
| IK | Husband | $10,000 | $10,000 |
| IPAC All Financial Services (superannuation) | Husband | $16,000 | $16,000 |
| N (superannuation) | Wife | $13,000 | $13,000 |
| TOTAL | $660,259 | $658,259 |
| Liabilities | Ownership | Husband’s Value | Wife’s Value |
| ANZ supplementary loan – No. 4495-23055 | Joint | $66,490 | $66,490 |
| ANZ Home Loan | Joint | $49,637 | $49,637 |
| Esanda (Toyota loan) | Joint | $68,797 | $68,797 |
| Income Tax | Wife | $10,130 | $10,130 |
| GO Mastercard | Wife | $7,000 | $7,000 |
| ANZ Mastercard | Husband | $9,000 | $9,000 |
| Aussie Mastercard | Husband | $10,000 | $10,000 |
| ANZ Visa | Husband | $750 | $750 |
| TOTAL | $221,804 | $221,804 |
NET PROPERTY $438,455 $436,455
| Financial Resources | Ownership | Husband’s Value | Wife’s Value |
| K Family Trust | Husband | UNKNOWN | UNKNOWN |
The parties are only $2,000.00 apart on the value of the net property. That difference is because of the difference in valuation of a 2000 Mitsubishi Magna, which the Husband values at $5,000.00 and the Wife value at $3,000.00. In the absence of evidence of a proper valuation of the 2000 Mitsubishi Magna the Court will ascribe it a value of $4,000.00. On that basis there are assets of $659,259.00, liabilities of $221,804.00, and a net property value of $437,455.00.
Parties contributions under s.79(4)(a) – (c)
The Wife acknowledges that the Husband brought an initial contribution to the relationship by way of his interest in Property H. It seems that there was some equity in the property, however there is no particular evidence about how much equity, or the valuation of Property H at any time prior be to the agreed valuation at hearing. Ultimately the only affidavit relied on by the Husband was his affidavit sworn 11 October 2007 which contains no evidence of the value of Property H at relevant times. The Wife says that if there is to an adjustment in the Husband’s favour for the initial contribution it should be a small adjustment of about two per cent.
The relationship was a longish one: the Wife and Husband were married for 15 years, and had three prior years of cohabitation. Shortly after the parties began to cohabit, they pooled their incomes into a joint account from which all expenses were paid.
The Wife worked until the children were born. Thereafter the Wife was the primary carer for the Children, although the Husband also contributed to the care of the children, but patently to a lesser extent than the Wife. The Wife was throughout the primary performer of domestic tasks, but again the Husband contributed, but again to a lesser extent.
The Husband was the primary earner throughout. The Wife also worked, both externally and latterly in the family business.
The Husband worked in communications and electronics at N until May 1993, and after short stints of unemployment and other employment, he commenced, together with the Wife, a business called K Electronics. The Husband also operated a small radio infrastructure rental business called “C” from about 1996. Until their “closure” in January 2006, the Husband worked at K Electronics and C. Thereafter, he worked at other businesses he had established, and, in particular the business which trades as “IK”.
The Wife worked at N until early in 1994, leaving because of a perceived conflict of interest with the K Electronics business. From the time that the business was established she had “done the books”, principally at night time. Until the mid 1990s the Wife continued to do the bookwork for K Electronics while working elsewhere. The Wife worked at K Electronics for 3 days a week for 5 ½ hours each day from the mid 1990s until its closure in January 2006.
The Husband and the Wife jointly borrowed to raise money to facilitate the running and expansion of the K Electronics business, with significant re-financings in 1993 and 2000.
The Wife appears to have made a contribution to the development and maintenance of Property H, in particular, she seems to have done most of the gardening and mowing work, although the Husband has assisted with this from time to time.
The businesses appear to have made reasonable profits in recent years:
a)K Electronics made a profit of:
i)$70,702.46 in the 2004 financial year; and
ii)$116,486.23 in the 2005 financial year;
b)C made profits of around $8,000.00 each year.
Post separation the Children have been living with the Husband, and he has supported them, while the Wife has paid a nominal amount of child support.
Overall, the Court considers that the parties contributions ought to be assessed as equal during the marriage, but that there ought to be a small adjustment in favour of the Husband for the contribution by way of initial property and for his post separation care of the Children. That adjustment ought to be two and one half percent.
S.75(2) factors
The s.75(2) factors relevant to these parties are set out and discussed below.
Age and health
The Wife is aged 52. She has a psychiatric depressive illness.
The Husband is now aged 48. He is in good health.
Income, property and financial resources and employment capacity
The Wife presently does not work. She is on welfare benefits of approximately $220.00 per week. The medical evidence indicates that the Wife may be able to resume employment by about October 2008.
The Wife was most recently employed between May and September of 2006 working in the Tourism Industry, earning between $550.00 and $660.00 a week gross. The Wife had previously worked as set out above.
The Court notes that the Wife’s illness (which is, on the medical evidence, at least partly attributable to the interaction of the parties during the marriage) will preclude her from working for some time. She will however be paid spousal maintenance of $150.00 per week for 12 months or until she obtains full time employment, and the spousal maintenance payment will supplement her present income, and also allow her some time and some monetary capacity to undertake education or re-training or establish herself in a business. This may ultimately offset, to some degree, any diminution in earning capacity suffered by the wife as a consequence of de-skilling arising from being employed part-time in a family business for the years immediately prior to January 2006.
The Husband continues to run an electronics and communications business. He says that he earns about $1,000.00 a week. Although the precise nature of the arrangements is unclear it is apparent that the Husband has reasonably ready access to money from savings or by way of directors loans from the business, as evidenced by the recent purchase of motorbikes to a value of $10,000.00 for the Children.
The Husband also has an interest as a trustee in a residential unit property in the suburbs of Darwin. That property is not the subject of any application in these proceedings. The extent of the Husband’s interest in the property is in dispute. It appears that $5,000.00 of the joint funds of the Husband and Wife were used by the Husband (without the Wife’s knowledge) to assist a trust, the K Family Trust, to pay a deposit on the unit, which was purchased for $160,000.00 in January 2006. The unit is mortgaged. The Husband’s mother lives in the unit. The Children are the beneficiaries of the Family Trust. The precise extent of the Family Trust’s interest (and hence the Husband’s interest) in the unit was not firmly established in evidence, but it appears to be at least a two-ninths interest. The interest in the property will be treated as a Husband’s financial resource for the purposes of this hearing.
Children
There are 2 children of dependent age. The eldest child is however of an age where she is able to live with each of her parents as she desires, and an order to that effect was made by this Court on 30 October 2007. The younger child is now 12 years of age and lives with his father, except for alternate weekends when he lives with his mother.
Commitments, support responsibilities and standard of living
The Husband has the greater commitments and support responsibilities as the youngest child lives with him apart from alternate weekends with the mother. The eldest child lives with both the father and mother, at the eldest child’s discretion.
As the children live, principally, with the Husband, it is appropriate and in the best interest of the children, that the Husband have sole occupancy and exclusive possession of Property H, which has been the children’s home, subject to an appropriate payment to the Wife based on a final assessment of the respective parties interest in their overall property. Given the amount of the Wife’s likely interest in the parties overall property any such payment is likely to be sufficient to enable her to, at least, meet existing commitments and support responsibilities and maintain an adequate standard of living, both for herself and for the children when they live with her. The Court also notes in this regard the amount of spousal maintenance to be ordered to be paid to the Wife, that is, $150.00 per week, for a period of 12 months from the date of the order, or until she obtains full-time employment.
Superannuation and pension entitlements
Both parties have very small superannuation pools. The Husband’s superannuation is slightly more ($16,000.00) than the Wife’s superannuation ($13,300.00), and the business owes the Husband outstanding superannuation entitlements of about $2,300.00. As it appears that the Husband has greater earning capacity than the Wife, and that the Husband (by virtue of being younger than the Wife) will probably work for a greater period of years, the Husband is likely to accumulate a greater superannuation pool over time.
Assessment
It is the Court’s view having considered the relevant s.75(2) factors that there ought to be an adjustment of seven and one half percent to the Wife for the s.75(2) factors.
Overall, this results in an adjustment of five percent to the Wife. Given a net property value of $437,455.00 the Wife’s fifty-five per cent share is $240,600.25.
Further consideration
To facilitate the Husband living with the children in Property H, and having sole occupancy and exclusive possession of that property, and to otherwise relieve the Wife from any liability for debt under the major property, business and tax related bank loans, the Court will order that the Husband:
a)have sole occupancy and exclusive possession of Property H; and
b)indemnify, and keep indemnified, the Wife, from liability under the major property, business and tax related bank loans for which they are otherwise jointly liable.
The joint loans value as liabilities is $184,924.00. The Wife’s share, for which the Husband will now indemnify her is $92,462.00. The Court notes that under the orders proposed the Wife will receive the 2000 Magna Mitsubishi, while the Husband will receive the 2005 Toyota Landcruiser, ski boat and equipment, 1995 Mitsubishi Triton, quadbikes and motocross trailers, and the household contents. The Husband however is to bear all of the expense of any necessary transfer of the property, including Property H. Whilst it is not possible to assess the precise amount of those transfer costs they will be considerable. Allowing for all of those matters as best the Court can the Court will order that the Husband pay the Wife the sum of $145,000.00 by 4.00 p.m. on 31 May 2008. If that sum is not paid Property H is to be sold or auctioned (and the orders in that respect are in usual terms).
Whether the orders proposed are just and equitable
Taking into account all of the circumstances, and considering, as a whole, the orders that the Court proposes to make the Court considers that the orders proposed are just and equitable.[4]
[4] Russell v Russell (1999) FLC 92-877
Spousal maintenance
The Wife claimed $150.00 per week for a period of 12 months or until she commences full-time employment, which ever is the sooner. The Husband does not dispute the quantum of spousal maintenance, but says that it ought, if granted, be taken into account in relation to the property distribution (as to which see above).
The obligation of the Court when determining spousal maintenance is “to give consideration to whether the wife was able to establish that she was unable to support herself adequately, and then if that was shown, to give consideration to the extent to which the husband was reasonably able to contribute towards the wife’s support.”[5]
[5] OS v PS [2007] FamCA 1180 at para 20 per Kay J: see also para 25 and ss.72, 74 and 75 of the Family Law Act.
In this case the evidence established that the Wife had weekly living expenses of about $367.00, and income of $220.00 from Centrelink. On that basis the Court is satisfied that the Wife needs spousal maintenance to support herself adequately, and (and this is not disputed) that the Husband has the means to pay an appropriate amount, namely $150.00 a week.
Although the medical evidence indicates that the Wife may be fit within 12 months of the date of hearing, which is by October 2008, the Court will order that spousal maintenance be paid for a period of
12 months from the date of the Court’s order. This is because, in addition to her medical condition, the Wife may require some additional time for retraining and re-establishing herself in the workforce. If full-time employment is obtained then the spousal maintenance should cease forthwith.
Conclusion and orders
For the reasons set out above there will be orders as set out in the orders immediately preceding these Reasons for Judgment.
I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate: Rachel Peattie
Date: 14 March 2008
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