Leighton and Leighton
[2006] FMCAfam 671
•11 December 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| LEIGHTON & LEIGHTON | [2006] FMCAfam 671 |
| FAMILY LAW – Property – 9 year marriage – both parties in late sixties – husband has substantial debt to Centrelink – excluded from small pool – significant initial contribution by wife – credit issues for husband. |
| Family Law Act 1975 |
| Aleksovski & Aleksovski (1996) FLC 92-705 In the Marriage of Clauson (1995) FLC 92-595 In the Marriage of Ferraro (1993) FLC 92-335 In the Marriage of Lee Steere (1985) FLC 91-626 Pierce & Pierce (1999) FLC 92-844 White & Tulloch & White (1995) FLC 92-640 Zaroff & Zaroff [2006] FamCA 920 |
| Applicant: | JEANETTE RUBY LEIGHTON |
| Respondent: | DESMOND WILLIAM ROBERT LEIGHTON |
| File Number: | SYM 4955 of 2006 |
| Judgment of: | Sexton FM |
| Hearing dates: | 27 & 28 November 2006 |
| Delivered at: | Sydney |
| Date of Last Submission: | 28 November 2006 |
| Delivered on: | 11 December 2006 |
REPRESENTATION
| Solicitors for the Applicant: | Burridge & Legg Solicitors |
| Counsel for the Respondent: | Mr J Berry |
| Solicitors for the Respondent: | North & Badgery Solicitors |
THE COURT ORDERS THAT:
By no later than midday on 28 February 2007 (‘date of settlement’) the following occur:
(a)The husband remove the contents, excluding fixtures, of the property at 171 Pierce Street, Wellington in the State of New South Wales (the Wellington property) and, subject to Order (2) be entitled to such contents;
(b)The husband remove the livestock, plant and equipment relating to such livestock, the tractor and trailer and subject to Order (2), be entitled to such livestock, plant, equipment, tractor and trailer;
(c)The husband vacate the Wellington property; and
(d)The husband transfer to the wife all his right, title and interest in the Wellington property and simultaneously the wife discharge the joint loan secured by way of mortgage secured on the Wellington property and pay to the husband the sum of $18,854.10 less any deductions calculated in accordance with Order (7) herein.
The wife be entitled to any items of property or livestock referred to in Order (1) (a) and (b) which remain on the Wellington property after midday on 28 February 2007.
In the event the wife fails to pay the sum due to the husband by the due date in accordance with Order (1)(d) or such longer time as agreed between the parties in writing, both parties forthwith sign all documents and do all things necessary to sell the Wellington property by private treaty at a sale price to be agreed between them and in default of agreement within 48 hours, at a sale price to be determined by the President of the Real Estate Institute of New South Wales or his nominee whose decision shall be binding upon the parties.
In the event contracts for the sale of the Wellington property have not been exchanged within 3 months of the date of settlement or such longer period as the parties may agree in writing, then both parties shall sign all documents and do all things necessary to effect a sale of the Wellington property by public auction at a reserve price to be determined in the same manner as the sale price for the sale of the property by private treaty.
In the event the Wellington property is passed in at auction then both parties shall sign all documents and do all things necessary to effect a sale by private treaty at a sale price which is 10% less than the reserve price at the auction referred to in Order (4).
Upon completion of the sale of the Wellington property, the parties shall cause the proceeds of sale to be distributed in the following order and priority:
(a)In payment of agent’s commission, auction fees and expenses and legal costs relating to the sale;
(b)In payment of adjustments in accordance with usual conveyancing practice;
(c)In payment of the sum necessary to discharge the loan secured by way of mortgage to the Commonwealth Bank;
(d)In payment of $8,580.00 to the wife;
(e)In payment of 30% of the balance then remaining to the husband in addition to interest from the date of the wife’s default calculated in accordance with the Family Law Rules; and
(f)In payment of the balance to the wife.
Pending the date of settlement or the date of settlement of sale of the property:
(a)The husband be exclusively entitled to occupy the Wellington property;
(b)The husband pay all mortgage instalments as and when they fall due; and
(c)The husband pay all rates and outgoings in relation to the Wellington property as and when they fall due
but in the event the husband fails to meet the payments in accordance with Order (7) (b) or (c), or there exist arrears in relation to the mortgage or other outgoings on the Wellington property, such payments and arrears be deducted from the sum payable to the husband by the wife in accordance with Order (1) (d) at the date of settlement or in accordance with Order (6) (e) of these Orders.
The wife forthwith transfer to the husband the whole of her right, title and interest in the blue Ford Station Wagon.
The husband be responsible for repayment of the debt to Mr Cullen.
The husband be entitled to monies owed to the parties from the sale of the horse float.
The husband be entitled to the red Ford Falcon motor vehicle and the wife be entitled to the Nissan Patrol motor vehicle.
The parties do all things and sign all documents necessary to give effect to these Orders.
Unless otherwise specified in these Orders:
(a)Each party be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party at the date of the making of these Orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s record thereof, insurance policies are deemed to be in the possession of the party named as the life insured, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements; and
(b)Each party remain liable for debts in that party’s name and indemnify and keep indemnified the other party in relation to those debts.
In the event the husband or the wife refuses or neglects to comply with any of the Orders herein, the Registrar of this Court at its Sydney Registry be appointed pursuant to section 106A of the Act to execute, in the name of the husband or the wife as the case may be, all deeds and instruments necessary to give effect to the orders herein, or any of them, and do all acts and things necessary to give validity and operation to the said deeds and instruments.
Each party have liberty to apply at 14 days notice in relation to the implementation of these orders.
All exhibits tendered in these proceedings be returned at the expiration of one calendar month unless an appeal is lodged.
All outstanding applications otherwise be dismissed and the matter removed from the list of cases awaiting finalisation.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYM 4955 of 2006
| JEANETTE RUBY LEIGHTON |
Applicant
And
| DESMOND WILLIAM ROBERT LEIGHTON |
Respondent
REASONS FOR JUDGMENT
Introduction
This case concerns property adjustment. The parties are 68 and 69 years of age. The wife has been married twice before, the husband once. There are no children of this marriage. After a 9 year period of cohabitation, the parties finally separated in October 2005 when the wife moved from the parties’ rural property in Wellington to live with her elderly parents in Sydney. There is a dispute between the parties as to when they separated under the one roof but I am not satisfied anything turns on the precise date. There is a high level of tension between the parties, the wife obtaining a 3 year order against the husband for apprehended domestic violence in November 2005.
The husband has been living at the jointly owned Wellington property since the parties’ separation and wants to retain the property and pay the wife for her interest. The husband has 7 horses, 2 donkeys and
7 sheep on the property. Although until hearing, the wife sought an order that the Wellington property be sold, she amended her application at hearing and now asks that the husband transfer his interest in the Wellington property to her. She says she is prepared to pay the husband $20,000 for his interest. The parties agree that the husband will retain the whole of the contents of the Wellington property, the animals on the property, the two Ford station wagons, the tractor and trailer. The parties agree the wife will retain the Nissan Patrol. The dispute concerns which party, if either, should be entitled to retain the Wellington property and how much that party should pay the other party for his/her interest.
Each party receives the age pension and a small amount of additional income, the husband from the parties’ rental of a portion of the Wellington property and the wife from her market retail business. The husband has significant hearing loss and both parties have other health problems. The husband has an obligation to repay a substantial debt to Centrelink for overpayment of the age pension. At the time of hearing the husband had not been prosecuted in relation to the matter nor had the Department made any claim on his assets or advised or its intention to do so.
Issues concerning property
The approach to the determination of an application under section 79 of the Family Law Act 1975 is well established by authority (In the Marriage of Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-595) and involves consideration of these questions:
a)What were the assets, liabilities and financial resources of the parties and their values at the time of hearing?
b)What were the financial and non-financial contributions made directly or indirectly by or on behalf of each party to the acquisition, conservation or improvement of the property of the parties?
c)What was the contribution made by each party to the welfare of the family including contributions made in the capacity of homemaker or parent?
d)What is the effect, if any, of any proposed order upon the earning capacity of each party?
e)What matters referred to in sub-section 75(2) of the Act are relevant and what adjustment, if any, should be made as a result of these factors?
f)Have there been any other orders made affecting a child or either party and is child support payable or likely to be payable in the future for the children of the marriage?
g)After consideration of these matters, is it just and equitable to make the actual orders?
What were the assets, liabilities and financial resources of the parties at the time of hearing and their values?
The parties’ legal representatives submitted an agreed list of the assets and liabilities and their values at the date of hearing. The parties have agreed to exclude their minimal bank account proceeds from the net pool of assets to be divided. Neither party has yet paid any legal fees and neither asks the Court to take legal fees into account. Neither party has any entitlement to superannuation.
There are two liabilities which were the subject of evidence at the hearing:
a)Husband’s debt to Mr Cullen. In his Financial Statement sworn in March 2006, the husband deposes to the parties owing the sum of $2,000 to a Mr Cullen for building works. However, the husband also deposes to being owed $2,000 for a horse float he has sold. The husband’s counsel submits the debt should be offset against the amount owed on the husband’s side of the ledger. I agree with counsel.
b)Debt to Centrelink. The husband owes Centrelink $111,357 for an overpayment of the age pension to him between 1997 and 2006. His evidence was unclear as to when he advised Centrelink he was being paid “double”. He says officers came to see him with the Federal Police in February or March 2006 to remove “paperwork” and this was “straight away” after he advised them what he had done. At another point he says he advised Centrelink in August/September 2005. He says the second pension payments stopped in or about March 2006, just before his visit from Centrelink officers and in July 2006 he received a letter from Centrelink stating the amount of the debt and the way it was to be repaid. The husband says he changed the spelling of his name from Layton to its original spelling ‘Leighton’ when he married the wife. He acknowledges he kept the ‘Layton’ pension which was paid to his Parramatta account and obtained another in the name of ‘Leighton’. He claims the wife knew about the account from 1998, before they moved to Wellington, and should be liable for half the debt. He says the pension was used “to pay stuff for Mrs Leighton, myself, the farm”. The wife gave no affidavit evidence as to how the funds were used and was not cross-examined on that point. The wife says she first learned of the ‘Layton’ pension account when she was unpacking boxes and found “another account” approximately 3 years ago. She says she confronted the husband but did not report the husband’s conduct until this year because the husband threatened her if she did so. The wife deposes to the husband being abusive and occasionally violent when the parties lived at Wyee and to twice smashing the windscreen on her car. She says when living at Wellington, the husband assaulted her a number of times and on one occasion threw a heavy item at her hitting her in the face and causing severe bruising. Her evidence as to these events was not challenged. She obtained an apprehended violence order against the husband in December 2005. I accept the wife had reason not to report the husband at the time she discovered his dishonesty.
I found the husband’s evidence in relation to the ‘second account’ most unsatisfactory. He provided no bank statements for the account because “Centrelink took them.” He was unable to verify how the funds from that account were used. He says he has no idea of the balance of the account at the time the account was closed by Centrelink. The wife says the bank statements for the account were sent to an address in Rosehill “where a woman with whom he had a de facto relationship lives.” The husband agrees he used the Rosehill address for the ‘second account’. He gives no evidence as to why he used that address. He gives no evidence as to who resides at the Rosehill address or as to whether that person had any involvement in the deception. The husband asserts that the funds were contributed to the parties’ expenses. Mr Berry submits the court should infer that the funds to some degree benefited the family indirectly. I am not satisfied I can make such a finding given the paucity of evidence and given my credit findings in relation to the husband, referred to later in these Reasons. Despite Mr Berry’s submission, he does not ask the Court to include the Centrelink debt in the net asset pool to be distributed between the parties and given I am not, on balance, satisfied the funds were used for joint expenses, I accept Mr Berry’s submission.
I therefore find the parties’ assets and liabilities at hearing to be as set out in the following table:
| Assets at the date of hearing | $ |
| 171 Pierce St, Wellington (joint) | 170,000.00 |
| Wife’s Nissan Patrol motor vehicle | 5,000.00 |
| Horses, sheep and donkeys at Wellington property | 2,400.00 |
| Tractor & trailer | 7,000.00 |
| House contents | 3,000.00 |
| Wife’s Westpac & CBA accounts (negligible) | To be omitted |
| Wife’s Falcon blue Station Wagon | 1,000.00 |
| Husband’s Ford red Station Wagon | 1,000.00 |
| Husband’s CBA Bank Account (negligible) | To be omitted |
| Sum owed to the husband from sale of horse float | 2,000.00 |
| Liabilities at the date of hearing | |
| CBA Mortgage (joint) | (78,553.00) |
| Debt owed by parties to Mr Cullen, builder | (2,000.00) |
| Amount owing by husband to Centrelink (111,357.12) | To be omitted |
| TOTAL NET ASSET POOL | 110,847.00 |
Credit
As already noted, the husband claimed a pension to which he was not entitled for approximately 9 years. I find his evidence about the matter unsatisfactory in a number of respects. The husband was unable to provide any credible explanation as to why he omitted any reference to either the ‘Layton’ pension payment or the debt to Centrelink in his Financial Statement sworn in March 2006. He had arranged for the bank statements for the ‘Layton’ account to be sent to an address in Rosehill, rather than to his home address, without explanation as to who lived at the Rosehill address, or what involvement, if any, that person had in the deception. Yet he asks the Court to accept the wife knew all about the ‘Layton’ account almost from the beginning and benefited from it. He says he voluntarily confessed his conduct to Centrelink in August/September last year but officers from Centrelink and the Australian Federal Police did not interview him until February or March 2006 when his pension payments on the ‘Layton’ account were stopped. The only objective evidence on the issue is a letter from Centrelink dated 3 July 2006, annexed to the husband’s affidavit, stating the amount of the overpayment. The wife says she reported the husband’s conduct to Centrelink earlier this year. I do not accept Centrelink took 9 months to act on the husband’s alleged confession and prefer the wife’s evidence as to how the matter came to light. I find the husband’s conduct in relation to claiming a second pension for such a long period, his failure to include any reference to the matter in his Financial Statement sworn in March 2006 and his failure to verify how the funds were used reflects very poorly on his credit.
I find much of the husband’s evidence careless and unreliable. He made assertions of fact about financial events which could have been readily verified by documents or other evidence which he failed to produce. He made other assertions which were directly contradicted by documents tendered in the wife’s case and were clearly wrong. By way of example:
a)The husband deposed to the parties incurring legal costs of $13,000.00 to Priority Legal when managing a dispute with Lake Macquarie Council. Documents tendered show the costs were $345.00[1]. When confronted about the issue in cross-examination, the husband says the parties incurred other legal costs with Priority Legal but provided no details;
b)The husband deposed to the parties paying Wellington Council approximately $30,000.00 in 2003 to meet the costs of subdivision and development approval and costs incurred in the subdivision of the Wellington property. Documents tendered show the amount payable was $4,567.30[2]. Although the wife acknowledges payment of further amounts for surveyors, layback, certificates and water connection amounting to a total payment of $8,800.00, the husband’s evidence was seriously misleading;
c)The husband deposed to obtaining a loan in 1998 of $9,500.00 which was used to discharge the wife’s mortgage on the Wyee property. The husband sought to rely on his assertion to prove a contribution by himself to the wife’s Wyee property. The husband’s counsel conceded the documents show the $9,500.00 was not used for the purpose contended by the husband and was part of the $16,000.00 home loan borrowed by the parties in February 1998. Counsel conceded the evidence shows the wife discharged the mortgage on her Wyee property prior to the parties living together;
d)The husband deposed to receiving a compensation payment of $13,000.00 when documents in the wife’s case show the sum to have been $10,850.00;
e)The husband deposed to the Wyee property being unencumbered when sold in 1999. It is clear from documents that Wyee was in fact used as security for the purchase of the Wellington property;
f)The husband deposed to net proceeds of sale of the subdivided portion of the Wellington property, approximately $78,000.00, being paid into the parties’ joint account, when the bank statements show the funds were paid to an account in his sole name; and
g)The husband deposed to $10,000.00 of the sale proceeds of the subdivided portion of the Wellington property being paid to the wife’s son, Robert Banks asserting “I had no knowledge of these transactions” and inferring this involved some mischief on the part of the wife. In cross-examination, Mr Banks explained that he had lent the parties $10,000.00 for subdivision expenses which were repaid when the land was sold. I accept Mr Banks’ evidence which was corroborated at least in part by a cheque butt dated 2 April 2003 made out by Mr Banks to Wellington Council for $5,000.00[3] and was not challenged by the husband.
[1] Exhibit 1
[2] Exhibit 2
[3] Exhibit 12
I found the wife a frank and direct witness both in relation to her affidavit and her oral evidence. She verified with documents the significant financial events to which she deposed. I preferred her evidence to that of the husband whenever there were factual differences between them.
Contributions
The court must consider all the contributions, both financial and non-financial to the acquisition, conservation and improvement of the parties’ assets as well as to the welfare of the family before and after separation. The Full Court said in Aleksovski & Aleksovski (1996) FLC 92-705 (at 83,437):
It is therefore necessary… [to] weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such assessment into a percentage of the overall property of the parties.
Financial contributions
Although the parties are in dispute about much of their financial history, I am satisfied the most significant issue concerns their respective contributions at the time they started living together.
It is common ground that the wife owned a property at 29 Pulbah Street, Wyee with an estimated value of $80,000.00 at the commencement of the parties’ cohabitation in or about July 1996. The wife also owned a car, furniture, whitegoods and items used for her retail cooking business. The wife says the Wyee property was unencumbered. The husband says the property was subject to a mortgage to secure a loan of $10,000. Some time was spent at hearing on this issue. The wife says she became entitled to the home unencumbered when her second husband died in 1995. She then lent one of her sons $10,000.00, the loan secured by way of a mortgage on the Wyee home to a Mr David Dorevitch. The wife says she repaid the loan in full by the due date for payment of 24 March 1996 after selling her Ford Econovan for $10,500.00 in late 1995. The wife’s son Robert Banks gave affidavit and oral evidence confirming the wife’s version of events as to the repayment of the loan. Exhibit 5 verifies the date by which the wife was required to repay the loan as 24 March 1996 and I accept the wife’s version of events. The husband’s counsel properly conceded the issue. I am satisfied the wife owned an unencumbered property at Wyee with an approximate value of $80,000.00 when the parties first lived together.
For his part, the husband says he owned two trucks, tools, a car, furniture, 3 horses with a value of $20,000 and cash of $27,000 at the commencement of cohabitation. He provided no bank statements to verify his claim nor any explanation for not doing so. He says the cash resulted from the sale of his recycling business in 1993 or 1994 and the sale contract required him to work in the business part-time for 12 months. Yet he says he was doing this part-time work when the parties started living together in 1996. He was unable to recall who purchased his business. He was not prepared to reveal how much he received from the sale. He says the arrangement was verbal and he could produce no written evidence of the sale. In cross-examination the following exchange took place between the wife’s solicitor and the husband:
Solicitor: Where was that (the cash) held?
Husband: In another bank account.
Solicitor: And have you got the details of that bank account?
Husband: No, I haven’t.
Solicitor: Have you got the bank statements that say that?
Husband: No.
……
Solicitor: So what did you do with the money?
Husband: Well, I think that’s my personal business.
Solicitor: I see. So you don’t want to answer that?
Husband: No.
I accept the wife’s solicitor’s submission that the husband’s attitude was not consistent with his obligation to make full and frank disclosure to the wife and to the Court. It is well established by the authorities that each party has an obligation to make full and frank disclosure of his/her financial position in proceedings of this kind.
The wife says the husband lived in a shed located on a property near her Wyee property just prior to them living together and apart from some horses, an old truck and an old car, the husband had little else.
I prefer the wife’s evidence on the husband’s financial position at the commencement of cohabitation.
The wife says the husband made no financial contribution to the property at Wyee although she transferred the property into their joint names in April 1997 to enable the joint borrowing of funds to purchase the Wellington property. The husband did not challenge her evidence on this issue. In February 1998, the parties agree they borrowed $16,000.00 from the Commonwealth Bank secured by mortgage over the Wyee property to install an industrial strength driveway at the property and to pay bills for the husband’s horses which were being agisted on another property.
In September 1998, the parties jointly purchased the property at 171 Pierce Street, Wellington for $69,900.00. They borrowed funds sufficient to meet the purchase price, the costs of purchase and to discharge the balance of the $16,000.00 loan taken out in February 1998 and the $6,000.00 loan taken out by the husband in June 1998. The loan account[4] was secured by way of mortgage over both the Wyee and Wellington properties. Part of the Wellington property was leased at a rent of $200.00 a month and remains leased. When the parties moved to the Wellington property, they leased the Wyee property before selling it 9 months later for $87,500.00. The wife says the parties deposited $62,000.00 into joint accounts to meet bills and the balance was used in part-payment of the loan on the Wellington property. In October 2003 the parties sub-divided the Wellington property and sold the subdivided portion for $115,000.00. I accept the wife’s largely unchallenged evidence, supported by the husband’s bank statements[5] that the net $78,141.21, after repayment to the Commonwealth Bank of a redraw facility, was paid into an account in the husband’s name. I accept on the wife’s evidence the funds were used in a 3 week period to purchase a tractor, trailer, red Ford Falcon, tools, horse float, horse rugs, barbecue, table and chairs and refrigerator and to repay a debt owed by the parties of $10,000.00. The wife says the husband gave her $10,000.00 but she had no say in how the remainder of the funds were used. She says the husband made no payment towards the loan on the property, as they had intended at the time of sale.
[4] Exhibit 9
[5] Annexure K to the wife’s affidavit.
In April 1999, the husband received $10,850.00 for an industrial deafness claim. The wife says the parties used these funds to meet the costs of the horses of $1,000.00 a month. The husband says the money was used for the business and to improve the Wellington property. Without further evidence I am unable to make a finding as to precisely how these funds were used. On balance, I accept the $10,850.00 was used towards the parties’ expenses and was a contribution by the husband.
In July 2005 the husband deposes to receiving a further compensation payment of $31,648.00 for industrial deafness caused by his employment. He does not say what he received net after expenses and there is no record of any substantial deposit into his bank account or the joint bank account at around that time to verify the net amount paid. The husband does not explain this absence of evidence. He makes assertions about how the money was spent but provides no documents to verify his claims apart from expenditure of approximately $5,000.00 at Harvey Norman. Given the transactions would have occurred only 12-15 months ago, I find the absence of evidence on this potentially significant issue a further example of the husband not fully disclosing his financial position.
Income
Neither party has provided evidence of his or her taxable income for any financial year during the period of their cohabitation. I am unable to make findings as to what each party earned during the marriage.
Apart from a period of 2-3 months in 1999 when the wife underwent knee surgery, the wife ran a small business during the whole of the marriage making jams, pickles, cakes and pies and selling the produce at country markets. It is common ground that the husband assisted in the business by selling product at different markets, though I am satisfied the wife, who prepared the produce for sale, played the greater role. There is no objective evidence before me as to what the parties’ earned from the business. The wife says sometimes they deposited income from the business into a bank account, but often they retained the cash to purchase product and meet other expenses. On the limited evidence available, I cannot make findings as to the parties’ respective earnings from the retail business during the marriage. The parties agree they have received rental income of $200 a month since they have lived at the Wellington property as well as a pension.
The wife says the husband used to sell and buy horses but there is no evidence before me as to whether this resulted in a profit or a loss to the parties. The husband says the parties agisted horses from time to time on the property until the wife moved out in October 2005, but he gives no evidence as to what, if any, income the parties’ earned from these arrangements. As already noted, the husband claimed a second age pension for almost the whole of the cohabitation period but I am unable to make findings as to how the funds were expended.
The wife complains the husband “often drew money from our joint bank account and spent it for his own purposes”. She says she saw him playing poker machines and betting on horse races. She says she used to deliver the husband to pubs and clubs where he spent considerable time. Although the bank statements in the husband’s sole name, annexed to the wife’s affidavit show regular and at times substantial cash withdrawals from clubs and hotel ATM’s, I am not satisfied on the evidence available, that I can draw the conclusion the husband has wasted funds.
The wife says she has visited the Wellington property three times since separation. She says the property is in very poor condition. She says the husband has 6 dogs which live in the house. She says that in April 2006 she discovered the house insurance had lapsed and she paid the premium for the following 12 months. She has paid council rates for 2 quarters in 2006. In October 2006, she paid a judgment debt of $1500.00 to Turtons Lawyers on behalf of the parties without contribution by the husband. I accept the wife’s evidence on these issues.
The husband says since separation he has borne all costs associated with vet fees, horse feed, maintenance and insurance. He does not however, quantify what expenses he has been paying, nor are they referred to in his Financial Statement. There is no dispute the husband has paid the mortgage of approximately $600.00 a month since separation offset by the rental income from the property of $200.00 a month. I am not persuaded there should be an adjustment in favour of either party as a result of these matters.
Mr Legg, the wife’s solicitor, submits that the wife’s initial contribution of the Wyee property enabled the parties to purchase the majority of their current assets. Mr Legg submits the parties would not have been in a position to purchase the Wellington property and later subdivide the property had the wife not owned the Wyee property. Mr Legg submits the Court should give the wife’s initial contribution significant weight. I agree with him.
The Full Court held in Pierce & Pierce (1999) FLC 92-844 at 85,881:
It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution…regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home.
The Full Court in the recent decision of Zaroff & Zaroff [2006] FamCA 920 approved this statement of principle in regard to initial contributions.
The parties have current net assets of $110,847. The wife contributed the Wyee property valued at $80,000 in 1996, or 72% of the current net pool. I accept Mr Legg’s submission that the parties used the Wyee property to purchase the Wellington property which, with a net value of $91,447 makes up the major proportion of the current net pool. As already noted, I give substantial weight to the wife’s initial contribution.
Non-financial contributions
The husband sets out in his affidavit a list of tasks he performed at the Wellington and Wyee properties. In relation to the Wyee property, two independent witnesses give evidence which contradicts his assertions. The husband did not challenge the wife’s daughter’s observations while living with the parties at Wyee, that the husband gave no assistance at the Wyee property, except to build a fence to keep in his dogs. Nor did the husband challenge the evidence of the wife’s friend, Mr Fennell that he and his wife had been paid to paint the inside of the Wyee property in 1995, prior to the parties’ cohabitation. While I accept the husband may have performed some minor tasks at Wyee, I find he has exaggerated his contribution.
In relation to the Wellington property, the husband deposed to replacing the fencing “around the entire property”. The wife tendered recent photos of the perimeter fencing which belie the husband’s assertion[6]. However, I accept the wife’s evidence that the husband did replace fencing at the front and side of the property, some part of the perimeter fencing and built and repaired horse yard fences inside the property.
I accept the husband played some role in the maintenance of the property, and looked after the livestock.
[6] Exhibit 4
I accept the wife’s evidence that she transported the husband after their move to Wellington when the husband lost his driver’s licence for 16 months and I accept that the wife cared for the husband after he had an accident in 2004. I accept the husband’s evidence that he and the wife both contributed to day to day domestic duties.
On a weighing up of these matters I find the parties made approximately equal non-financial contributions.
What is the effect, if any, of any proposed order upon the earning capacity of each party?
If the wife retains the Wellington property, the husband will lose the $200 per month income he presently receives from rental on the property.
At the commencement of the hearing, the husband’s counsel submitted the husband is entitled to 50% of the net assets of the parties based on contribution factors alone but in final submissions, counsel changed his position. Counsel submitted the husband is entitled to 40% of the net assets on contributions. Mr Legg for the wife, submitted the husband should be entitled to no more than 30% of the net assets overall, whether based on contribution factors alone or on contribution factors with an adjustment for s.75(2) factors.
In assessing their respective contributions overall, I find the assets of the parties should be apportioned 25% to the husband and 75% to the wife.
What matters referred to in sub-section 75(2) of the Act are relevant?
The husband is 69 and the wife 68 years. There is no dispute that the husband suffers hearing loss. He also deposes to suffering from osteoarthritis, and to having problems with both hips which require replacement. The wife deposes to being a diabetic, to suffering sleep apnoea which disturbs her sleep and to having difficulties with her leg following a knee replacement.
Each party depends on the age pension for support though currently Centrelink is deducting an amount from the husband’s pension for the overpayment. The only letter from Centrelink to the husband in evidence, dated 3 July 2006, states that Centrelink will take $50 from each of the husband’s pension payments for 3 months and then “Centrelink will take the standard amount from your payments” which is 14% of the basic payment. The letter does not state the actual amount to be deducted after the 3 month period. The husband provides no evidence as to the amount he is currently receiving. Nevertheless, I am satisfied the husband will receive a smaller pension payment than the wife in the foreseeable future.
In his Financial Statement sworn in March 2006 the husband deposes to an additional income of $50 a week from rental of part of the Wellington property. In her Financial Statement sworn just before hearing, the wife deposes to an additional income of $50 a week from her retail market business. She says she is selling produce at one market a month while caring for her mother. Mr Berry submits the wife has a higher earning capacity than the husband given she can continue her retail business and is receiving a higher pension payment. Counsel submits the wife will have more capital than the husband as a result of these proceedings. He submits these facts warrant an adjustment in the husband’s favour. I agree with this submission.
Mr Berry submits the Court should take into account the wife’s future inheritance and make an adjustment in favour of the husband pursuant to section 75(2)(o). The wife’s father is deceased. The wife deposes to her mother being 88 years of age and in poor health. The wife is presently living with her mother to care for her. The wife is one of 5 children and says she is unaware of the contents of her mother’s will. There is no other evidence before the court as to the likelihood or otherwise of the wife receiving an inheritance, and no evidence at all as to the wife’s mother’s financial position. The Full Court in White & Tulloch & White[7] held:
[7] (1995) FLC 92-640 at 82,463
An expectancy of inheritance will not be relevant in many S 79 proceedings…
The initial relevance in the particular case needs to be established; once it is it becomes a question of weight and degree. The issue is then approached by considering it in a broad, general way, by taking into account the age of the relative…state of health, some general assessment of his or her financial position and some general assessment of the suggested inheritance expectancy.
On the evidence available, I can make no findings as to the likelihood or otherwise of the wife receiving an inheritance, or as to the inheritance expectancy. Accordingly, I make no adjustment for this factor.
The husband owes Centrelink over $111,000.00 as a result of his admitted deceptive conduct. Although the husband says there is an investigation into this debt, he says he does not expect the debt to be waived or reduced. He gives the court no details of any investigation. Centrelink have to date, elected to seek repayment of the overpayment from the husband’s pension payments. There is no evidence to suggest Centrelink will claim on the husband’s assets. As already noted, I am satisfied the husband will be repaying this debt from his pension payments over a long period and as a result I have made an adjustment in his favour.
I agree with Mr Berry’s submission that a 5% adjustment to the husband’s contribution entitlement is appropriate in the circumstances. The husband will therefore receive 30% of the net assets of the parties overall.
Have there been any other orders made affecting a child or either party and is child support payable or likely to be payable in the future for the children of the marriage?
This factor is not applicable.
Is the result just and equitable?
Section 79(2) provides that:
The Court shall 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.
There is a modest asset pool. For the wife to receive 70% of the assets, the wife will receive $77,592.90 overall and the husband $33,254.10. The wife already has a Nissan Patrol with a value of $5,000.00. The husband will have $14,400.00 in net assets. If the Wellington property is transferred to the wife, she will have $91,447.00 (net value of the property) + $5,000.00 (the car) which equals $96,447. She will need to pay the husband $18,854.10 to enable him to receive 30% of the net pool. If the Wellington property is transferred to the husband, the husband will need to pay the wife $72,592.90.
The husband deposes to having made arrangements to borrow additional funds in order to buy the wife’s share of the property. In cross-examination the husband concedes that may involve a borrowing of up to $138,000.00 to discharge the joint loan secured by way of mortgage and to pay the wife up to $60,000.00. He says he has an appointment with a mortgage broker organised through his accountant and he has advised his accountant he owes Centrelink over $111,000.00. He says he can borrow “whatever’s required” and “I have friends ... willing to assist.” The husband was cross-examined about how he would meet his necessary expenses including feed for the animals on such a low income which he estimates at $30 per day per horse. On an income of $267.00 a week in age pension, less 14% of the base payment in Centrelink loan repayments, the husband will have no more than $240.00 a week on which to support himself. Although he says “I have friends” he adduces no evidence from any such friends to satisfy me he can borrow the necessary funds. If he is to retain the Wellington property and pay the wife, he will need to borrow $150,000.00 and be in a position to repay the loan, repay the debt to Centrelink, support himself and feed his animals. I am not satisfied the husband’s application to retain the property is realistic.
The wife owned an unencumbered home when she came into the relationship. In my view, she should be given the opportunity to purchase the husband’s interest in the property. Given her modest income, this result may not be achievable, although I note her adult son has lent her money before. I have made orders to make this option available to her.
The husband will have assets set out in the following table:
| Assets to be retained by husband | $ |
| Horses, donkeys, sheep | 2,400.00 |
| Red Ford Falcon motor vehicle | 1,000.00 |
| Blue Ford Falcon motor vehicle | 1,000.00 |
| Home contents | 3,000.00 |
| Tractor and trailer | 7,000.00 |
| Monies owed for sale of horse float | 2,000.00 |
| Debt to Mr Cullen | (2,000.00) |
| Payment from wife | 18,854.10 |
| TOTAL | 33,254.10 |
The husband will pay his debt to Centrelink via deductions from his fortnightly pension payments.
The wife will have the assets and liabilities set out in the following table:
| Assets to be retained by wife | $ |
| Property at Wellington | 170,000.00 |
| Mortgage on property at Wellington | (78,553.00) |
| Nissan Patrol motor vehicle | 5,000.00 |
| Payment to husband | (18,854.10) |
| TOTAL | 77,592.90 |
I am satisfied that in all the circumstances, the orders I have made at the beginning of these reasons are just and equitable.
I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of Sexton FM.
Associate: Collette McFawn
Date: 11 December 2006
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