Landon & Landon

Case [2021] FCCA 1192

FEDERAL CIRCUIT COURT OF AUSTRALIA

Landon & Landon [2021] FCCA 1192

File number(s): WOC 117 of 2019
Judgment of: JUDGE M NEVILLE
Date of judgment: 31 May 2021
Catchwords: FAMILY LAW – Final hearing – property – adjustment of parties’ interests in property - husband made greater contributions to purchase of former family home by way of funds advanced by his parents and by inheritance - husband’s income met most of parties’ living expenses through relationship - where wife received compensation payment 3 years post separation for motor vehicle accident that occurred during relationship - where husband has had benefit of funds post separation and whether such funds should be added back - whether husband considered to have made an contribution to wife’s award - where wife has re-partnered adequacy of disclosure about new partner’s financial circumstances and ability of the Court to assess circumstances of cohabitation - where compensation award applied by wife to purchase of residential accommodation - orders made for adjustment in favour of husband of 6%.   
Legislation: Family Law Act 1975 (Cth) ss 75, 79
Cases cited:

Aleksovski & Aleksovski [1996] FamCA 111

Bevan & Bevan [1993] FamCA 95

NHC & RCH [2004] FamCA 633

Gaspaldi & Gaspaldi [2008] FamCAFC 134

Griffiths v Kerkemeyer [1977] HCA 45

Kingston & Field (No 2) [2020] FamCAFC 235

Marker & Marker [1998] FamCA 2382

Norbis & Norbis [1986] HCA 17

AJO & GRO [2005] FamCA 195

Stanford v Stanford (2012) 247 CLR 108

Trevi & Trevi [2018] FamCAFC 173
Number of paragraphs: 361
Date of hearing: 21, 22 and 23 October 2020
Place: Sydney
Solicitor for the Applicant: Rossi Simicic Lawyers
Solicitor for the Respondent: Heard McEwan Lawyers
Counsel for the Applicant: Mr Dura
Counsel for the Respondent: Ms Eldershaw

ORDERS

WOC 117 of 2019
BETWEEN:

MS LANDON

Applicant
AND:

MR LANDON

Respondent

ORDER MADE BY:

JUDGE M NEVILLE

DATE OF ORDER:

27 NOVEMBER 2020

THE COURT ORDERS THAT:

1.In these Orders, the following definitions apply:

(a)"B Street, Suburb C Property" means the property situate at B Street, Suburb C in the State of New South Wales being the whole of the land contained within Folio Identifier ....

(b)“ANZ Joint Facility” means the overdraft facility in the names of Ms Landon and Mr Landon trading as Company D, Account Number ...65.

(c)“ATO Debt” means the Wife’s personal indebtedness to the Australian Taxation Office including all General Interest Charges, penalties, administration fees or other costs imposed by the Australian Taxation Office recoverable by that agency in relation to the wife’s Client Account (TFN ...; ABN ...) from time to time.

(d)“E Street, Suburb F Property” means the property at E Street, Suburb F in the State of New South Wales being the whole of the land contained in Folio Identifier....

(e)“Insurance Payment” means the money paid to the Wife by G Insurance pursuant to a General Assessment by the State Insurance Regulatory Authority in the matter of Landon v G Insurance dated 22 January 2020.

General provisions

2.Except as provided…

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Landon & Landon [2021] FCCA 1192
Case
[2021] FCCA 1192
Decision Date

CaseChat Overview and Summary

This matter concerned an application by Ms Landon (the applicant wife) against Mr Landon (the respondent husband) in relation to the division of their property interests. The dispute arose following the parties' separation after an 11-year relationship, during which they had no children together but each had children from previous relationships. The court was required to determine the parties' respective interests in various assets and liabilities, including properties, bank accounts, superannuation, vehicles, and business-related debts, with a view to making orders for the final adjustment of their financial relationship.

The primary legal issues before the court were the valuation and division of the parties' property pool. Specifically, the court needed to determine the value of the wife's interest in the B Street, Suburb C property, the value of household contents in the husband's possession, and whether any further amounts should be added back against the husband's contributions. The court also had to address the parties' joint liability for an ANZ overdraft facility and the wife's personal indebtedness to the Australian Taxation Office.

Justice M Neville applied principles of property adjustment under section 79 of the Family Law Act 1975 (Cth). The court found that the wife's interest in the B Street, Suburb C property was to be valued based on her financial contribution to the purchase price, which was $668,000. The court also adjusted the valuation of household contents in the husband's possession to $80,000. The court noted that, apart from the joint overdraft facility, the parties did not jointly own other assets or have joint liabilities. The net asset pool, excluding the overdraft, was divided with the wife receiving 42% and the husband 58%.

The court made orders that, except as otherwise provided, each party would retain their respective sole-owned assets and be solely liable for their personal debts, including the wife's ATO Debt. The husband was ordered to discharge the ANZ Joint Facility within 28 days, with the wife to cooperate in closing the account. Each party was to indemnify the other against any claims arising from their respective liabilities. The court also appointed the Registrar of the Federal Circuit Court of Australia to execute any necessary documents on behalf of a party who failed to do so, with the defaulting party to pay the other party's costs on a solicitor-client basis for obtaining the Registrar's signature.

Orders

Orders of the court

WOC 117 of 2019

BETWEEN:

MS LANDON

Applicant

AND:

MR LANDON

Respondent

ORDER MADE BY:

JUDGE M NEVILLE

DATE OF ORDER:

27 NOVEMBER 2020

THE COURT ORDERS THAT:

1. In these Orders, the following definitions apply:

(a) "B Street, Suburb C Property" means the property situate at B Street, Suburb C in the State of New South Wales being the whole of the land contained within Folio Identifier ....

(b) “ANZ Joint Facility” means the overdraft facility in the names of Ms Landon and Mr Landon trading as Company D, Account Number ...65.

(c) “ATO Debt” means the Wife’s personal indebtedness to the Australian Taxation Office including all General Interest Charges, penalties, administration fees or other costs imposed by the Australian Taxation Office recoverable by that agency in relation to the wife’s Client Account (TFN ...; ABN ...) from time to time.

(d) “E Street, Suburb F Property” means the property at E Street, Suburb F in the State of New South Wales being the whole of the land contained in Folio Identifier....

(e) “Insurance Payment” means the money paid to the Wife by G Insurance pursuant to a General Assessment by the State Insurance Regulatory Authority in the matter of Landon v G Insurance dated 22 January 2020.

General provisions

2. Except as provided by any order to the contrary in these Orders, the Wife shall retain all her right, title and interest in:

(a) The B Street, Suburb C Property;

(b) The Insurance Payment (to the extent it may not be incorporated into the value of the B Street, Suburb C Property);

(c) All monies held in any bank account standing in her name or held for her benefit;

(d) All superannuation interests standing in her name or to her benefit;

(e) Her H Motorcycle (NSW Registration ...);

(f) Her Motor Vehicle 1 (NSW Registration ...); and

(g) All furniture, household furnishings, or other chattels currently in her possession or control.

3. Except as provided by any order to the contrary in these Orders, the Husband shall retain all right, title and interest in and to the following property:

(a) The E Street, Suburb F Property;

(b) All monies held in any bank account standing in his own name or held for his benefit;

(c) All superannuation interests standing in his name or to his benefit;

(d) His Motor Vehicle 2;

(e) All furniture, household furnishings, or other chattels currently in his possession or control.

ANZ Joint Facility

4. Within 28 days of these Orders, the Husband shall do all acts and things to discharge the Joint ANZ Facility.

5. Within 7 days of receiving a request in writing from the Husband, the Wife shall do all acts and things and sign all documents and give all authorities to the ANZ as required to close the ANZ Joint Facility.

Releases and Enforcement

6. Except as otherwise provided in these orders, each party shall be solely liable for any personal loan, credit card liability or other debt, including any taxation liability (and the Wife’s ATO Debt), which is standing in their name or to their account and shall indemnify and keep indemnified the other party for such liability.

7. From the date of these orders, the each party shall indemnify and keep the other indemnified against all or any manner of action or demand whatsoever both at law and in equity which that party may now have or at any time in the future may have, howsoever arising and for abundant clarity:

(a) the Wife shall wholly indemnify the husband against any action or demand relating to the ATO Debt; and

(b) each party may rely on this Order as a defence to any such claim or demand whether such demand or claim is the subject of judicial, quasi-judicial or administrative action or proceedings including in relation to the indemnification of that party’s costs in such a matter.

8. The parties shall each do all acts and things and sign all documents, give all approvals and authorities as necessary to give effect to these Orders.

9. In the event that either party fails to execute any document necessary to give effect to these orders, the Registrar of the Federal Circuit Court of Australia at Wollongong be appointed pursuant to s 106A of the Family Law Act to execute the document on behalf of the party who refuses or neglects to execute it and do all acts and things necessary to give force and effect to these orders AND FURTHER the party refusing or neglecting to execute the document or documents pay the costs of the other party on a solicitor-client basis in relation to obtaining the Registrar’s signature.

10. Any costs application to be made within 28 days of today’s date.

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

The matter was listed for final hearing on 21, 22 and 23 October 2020. BACKGROUND The parties commenced their relationship in 2006 and started to live together in the latter part of that year. Whilst there are no children of the relationship between the parties, each have children from previous relationships. The wife has three children from a previous relationship – X, Y and Z. At the time the parties started to live together X was aged 11, Y was nine and Z was seven years of age. There is a dispute between the parties as to whether the children spent time with their father on alternate weekends, or whether they lived with the parties, and with their father on an equal time basis. The husband has two children from a previous relationship – J and K. J was aged four years and K was aged two years at the time the parties started to live together. At the time the parties started to live together, the husband’s children were in his former partner’s primary care in Town L, NSW. Initially, they would spend time in the parties’ household on a fortnightly weekend basis. Later in the relationship, J and K entered the husband’s primary care and lived with the parties. The parties disagree as to when this occurred. In 2006 or 2007, the parties established a business called “Company D”. The business operated from leased premises in the Suburb M Shopping Centre. In order to open the business, the parties made a joint application for finance with the ANZ Bank. Initially, the parties lived together in a property rented in the wife’s name at E Street, Suburb F, NSW. The wife was working in the business attending to clients and otherwise managing the business and the husband was working as a health care worker. In 2007, the parties purchased property at E Street, Suburb F (“the E Street, Suburb F property”) for $465,000. The property was registered in the husband’s sole name and was financed by a loan from the ANZ Bank of $371,000. The husband’s parents advanced $106,000 which was applied to the purchase and to the stamp duty costs. Later that year, the husband received an inheritance of $169,000. Of that inheritance, $100,000 was applied to the mortgage over the property. In 2008, the shop next door to the business became available and a second business called “Company N” was established. The wife then commenced to work in both businesses. The parties were married in 2014. In 2014, the wife was involved in a serious motorbike accident and sustained numerous physical injuries. She was unable to work for about 15 months and required significant assistance from her family whilst she recovered. She endeavoured to keep the business afloat, but it was closed in 2017. A bank guarantee was called in for unpaid rent on the premises and there are outstanding debts associated with the business. The wife made a motor vehicle compensation claim following the accident and in 2020, she received the net sum of $669,484 from that claim. The parties do not agree as to the date of their separation. The wife contends that the parties separated in 2015 but continued to live under the same roof until 2017. The husband contends the parties separated in 2017. It was not controversial, however, that the parties lived together until 2017 and continued to use jointly held assets and liability until that time.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The available evidence can only lead to a finding that the liability is, at present, $68,790. The property pool: findings and conclusions Having regard to the above findings in relation to the contentious items on the joint balance sheet, I find the property pool available for division between the parties is as follows: But for the joint overdraft facility, the parties do not jointly own assets nor do they have liabilities in joint names. As the parties’ legal and equitable interests currently stand, the wife solely owns or is responsible for assets valued at $710,135; superannuation of $71,990; and liabilities of $103,656. This represents 42% of the net asset pool excluding the joint overdraft facility. The husband solely owns or is responsible for assets valued at $921,667; superannuation of $325,414 and liabilities of $326,416. This represents 58% of the net asset pool excluding the joint superannuation facility. It was not controversial between the parties that it was just and equitable to make orders under s 79 of the Act adjusting their interests in the property. The parties were in a relationship for 11 years. Whilst there were no children of the parties’ marriage, each had children from previous relationships and the parties did, at various points and for significant periods, provide support for each other’s children. It is not controversial that since their separation there has been no common use of the parties’ property and each of them agrees that this will continue to be the case in the future. However, they continue to be jointly liable for the overdraft facility and to the extent that they agree there will be no common use of their property they seek orders that will finally determine their financial relationships. They each seek orders adjusting their property interests, but they are in dispute as to the quantum of the adjustment. CONTRIBUTIONS Turning then to the assessment of the parties’ respective contributions. Initial contributions At the time the parties commenced to live together, the wife had a Motor Vehicle 4, the value of which was unspecified; and personal belongings, furniture and effects which, I infer, were of nominal value. She had superannuation with Super Fund DD, the value of which was not deposed to by the wife, but which was received by her following a property settlement with a previous partner and I consider it was likely modest. The husband had superannuation of $78,000. He otherwise had a newly purchased Motor Vehicle 5 for which he had paid $40,000. He had household contents of nominal value. The Motor Vehicle 5 was used as a trade in vehicle for a subsequent motor vehicle used by the parties.Direct and indirect financial contributions to the acquisition of property throughout the relationshipFinancial contributions from salary or wagesThe husband Throughout the relationship, the husband worked in paid employment on a full time basis and it appears uncontroversial that his income has always been higher than that of the wife’s.

Ratio Decidendi

Legal Principle Established

Ms S impressed as a witness who gave truthful evidence to the best of her ability. PRELIMINARY ISSUE: DATE OF SEPARATIONDate of separation There is some dispute as to when it is that the parties commenced to live separately under one roof. The wife contended that separation occurred in or around 2015. The husband contended it occurred on 2017. Whilst each party had adduced evidence on the issue in their trial affidavits, and whilst there was cross-examination on the issue during the course of the trial, ultimately, both parties accepted that the distinction was an unimportant one in the ultimate determination of this matter and each agrees that physical separation occurred on 27 June 2017.IDENTIFYING THE PROPERTY POOL The parties had worked hard to prepare a joint balance sheet in advance of the hearing. As is often the case in property proceedings, the parties updated the balance sheet throughout the course of the proceedings. Just prior to the commencement of submissions, the following concessions and, or, adjustments to the parties’ contentions were made:(a)The wife conceded that the balance of the husband’s Bank U account ending ...31 was $5 and that the balance of the Bank U account ending ...94 was $6,662.(b)The wife adjusted her contention as to the value of the household contents in the possession of the husband from $15,000 to $80,000. The husband continued to contend that the value is negligible.(c)The husband adjusted his contention as to the value of the wife’s interest in the B Street, Suburb C property from $660,000 to $668,000. The wife continued to contend that her interest was valued at $407,500.(d)The husband conceded the value of the wife’s interest in the Motor Vehicle 1 is $16,000.(e)The husband conceded that, in the absence of evidence about it, the Virgin Credit Card liability should not be included on the balance sheet. Accordingly, the balance sheet upon which submissions were made is as follows: By the time of closing submissions, and by reference to the final agreed balance sheet the parties were in dispute about the following items:(a)Item 2: Value of the wife’s interest in the property at B Street, Suburb C.(b)Item 10: the value of the contents and furniture from the former family home.(c)Items 22 - 27: what, if anything, should be added back against the husband. Turning then to the contentious items.Assets in disputeThe value of the wife’s interest in B Street, Suburb C In 2020, the wife and her partner Mr O purchased property together at B Street, Suburb C. The property was registered in both names, as joint tenants and the wife and Mr O reside together in the property with the wife’s children Y and Z. The wife contends that she has a 50% share in the property, valued at $407,500. The husband contends that the wife’s interest in the property should be valued at $668,000 being her financial contribution to the purchase price. The property was purchased for $815,000. In her affidavit, the wife deposed that she applied $660,000 of her compensation award to the purchase. The balance of the purchase price and stamp duty costs were paid by Mr O. There is no evidence as to whether Mr O financed those costs outright, or whether he obtained finance in relation to them. The wife does not disclose that she has any liability under a mortgage over that property in her affidavit evidence nor in her Financial Statement. There is no evidence that the property is encumbered in any way. Having regard to these matters, I have assumed that Mr O met the balance of the purchase price and stamp duty costs outright without borrowing.