Lester and Lester (No.2)
[2012] FMCAfam 388
•4 June 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| LESTER & LESTER (No.2) | [2012] FMCAfam 388 |
| FAMILY LAW – Property – disputed loans from family members – adjustment of contributions – s.75(2) and related factors – spousal maintenance. |
| Evidence Act 1995 (Cth), s.76, 77. Family Law Legislation Amendment (Superannuation) Act 2001 (Cth), pt.6 |
| C & C [2005] FamCA 429; (2005) 33 Fam LR 414; (2005) FLC 93-220 In the Marriage of Astbury (1978) 34 FLR 173; (1978) FLC 90-494 In the Marriage ofBevan (1993) 19 Fam LR 35 In the Marriage of Biltoft (1995) 126 FLR 385; (1995) 19 Fam LR 82 In the Marriage of Crapp and Crapp (No.2) (1979) 5 Fam LR 47; (1979) FLC 90-615 In the Marriage ofHickey (2003) 30 Fam LR 355; (2003) FLC 93-143 In the Marriage of Kessey (1994) 18 Fam LR 149; (1994) FLC 92-495 In the Marriage of Mitchell (1995) 19 Fam LR 44; (1995) FLC 92-601 In the Marriage of Pierce (1998) 24 Fam LR 377; (1999) FLC 92-844 In the Marriage of Prince (1984) 54 ALR 467; 9 Fam LR 481 In the Marriage ofWilson (1989) FLC 92-033 Jones v Dunkel (1959) 101 CLR 298 Lester & Lester [2010] FMCAfam 1352 Van Essen & Van Essen (2000) [2000] FamCA 775; (2000) 26 Fam LR 456; (2000) FLC 93-028 Z & Z (2005) 34 Fam LR 296; (2005) FLC 93-241 |
| Applicant: | MS LESTER |
| Respondent: | MR LESTER |
| File Number: | SYC 4480 of 2010 |
| Judgment of: | Monahan FM |
| Hearing dates: | 20, 21, 22 and 23 February 2012 |
| Date of Last Submission: | 23 February 2012 |
| Delivered at: | Sydney |
| Delivered on: | 4 June 2012 |
REPRESENTATION
| Counsel for the Applicant: | Ms Dulhunty |
| Solicitors for the Applicant: | Miller Goddard Solicitors |
| Counsel for the Respondent: | Mr Fermanis |
| Solicitors for the Respondent: | Scanlan's Lawyers |
ORDERS
Within 28 days from the date of these Orders, MR LESTER (“the husband”) do all acts and things and execute all deeds, documents and instruments necessary to transfer to MS LESTER (“the wife”) all of the husband’s right, title and interest in the property known as and situate at Property B, [B], NSW (“the [B] property”).
At the same time as the husband complies with paragraph one (1) herein, the parties each do all things and sign all documents necessary to discharge the husband’s liability with respect to the mortgage over the [B] property.
Within 28 days from the date of these Orders, the husband do all acts and things and execute all deeds, documents and instruments necessary to transfer to the wife all of the husband’s right, title and interest in the property known as and situate at Property P, [P], NSW.
Within 28 days from the date of these Orders, the wife do all acts and things and execute documents necessary to transfer to the husband all of the wife’s right, title and interest in the 2005 Holden Rodeo motor vehicle.
Other than as is specifically provided for in these Orders, the parties be solely entitled, to the exclusion of the other, to all other real property, personal property, household contents and chattels of whatsoever nature and kind in the possession or control of each of the parties as at the date of these Orders, including, but not limited to, all or any money standing to the credit of the party in any bank or building society, superannuation entitlements, shareholdings, motor vehicles, furniture and contents and any present or future expectation under a trust or estate.
The wife forthwith indemnify the husband with respect to any liabilities arising out of all monies loaned by Mr H and Ms H.
The parties each indemnify each other in respect of any other debts for which they may otherwise be liable as at the date of these Orders or in respect of any transactions pursuant to these Orders.
The husband and the Trustee of the [Q] Superannuation Plan do all necessary acts and things, sign all documents and give all consents necessary to give force and effect to the Orders hereunder:
(a)paragraphs 8(b) to 8(i) (inclusive) herein are binding on the [Q] Superannuation Fund (“the Fund”);
(b)the amount allocated to the wife out of the interest of the husband in the Fund is $158,139.39;
(c)pursuant to s.90MT(1)(a) of the Family Law Act 1975 (“the Act”) whenever a splittable payment becomes payable in respect of the interest of the husband in the Fund, the wife be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (“the Regulations”) using the base amount and that there be a corresponding reduction in the entitlement of the husband to whom the splittable payment would have become payable but for these Orders;
(d)paragraph 8(c) herein has effect from the operative time;
(e)the operative time for the purpose of these Orders is the seventh business day after the husband has complied with paragraph 8(j) herein;
(f)within 14 days of becoming entitled to receive superannuation benefits from the Fund, the wife provide to the Fund all such forms as shall be necessary to enable it to determine the nature and quantum of the superannuation entitlement, together with any other related information the Fund may reasonably require;
(g)until such time as the amount of the superannuation split allocated to the wife pursuant to these Orders can be rolled over on to a separate account in the sole name of the wife:
(i)the husband provide to the wife no less than 28 days notice before such time he elects to retire for any reason or otherwise become entitled to access in whole or in part his entitlement to the Fund;
(ii)the husband direct and authorise the Trustee of the Fund to communicate in writing with the wife and/or any person authorised by her:
1. to answer any reasonable enquiries as may be made by the wife or on her behalf from time to time in relation to her entitlement in the Fund; and
2. to provide the wife and/or her authorised representative a copy of any notice of any application or request by the husband which seeks release of entitlements in the Fund insofar as that release may affect the wife’s entitlement in the Fund pursuant to these Orders;
(h)the husband by himself, or by his servants or agents, be hereby restrained from doing any act or thing which would prevent the wife, her heirs, administrators, executors or nominees from receiving the benefit in the Fund to which she is entitled pursuant to these Orders.
(i)in the event that the superannuation split to the wife pursuant to these Orders can be rolled over into a separate account of the wife, the parties and the Trustee of the Fund each do all such acts and things and execute all such documents as may be necessary to facilitate and to implement that roll-over.
(j)within seven (7) days of the date of these Orders, the husband cause a sealed copy of these Orders be served on the Fund;
(k)within seven (7) days of these Orders, the wife cause the Trustee of the Fund to be served with a completed Regulation 72 Notice.
AND THE COURT DIRECTS THAT:
The wife cause a copy of the letter dated 13 February 2012 from the Trustee of the [Q] Superannuation Plan in respect of procedural fairness to be forwarded to the Court forthwith to be placed on the Court file.
In the event that either party refuses or neglects to execute any deed or instrument that may be required to give effect to these Orders, the Registrar of the Court be appointed pursuant to s.106A of the Act to execute such deed or instrument in the name of such party or parties and do all acts necessary to give validity to the operation to the deed or instrument.
All extant applications before this Court be otherwise dismissed, with the exception of the wife’s Application in a Case filed on 26 April 2012 and now returnable on 6 June 2012 at 9:30am.
IT IS NOTED that publication of this judgment under the pseudonym Lester & Lester (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 4480 of 2010
| MS LESTER |
Applicant
And
| MR LESTER |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application brought by MS LESTER (“the wife”) against MR LESTER (“the husband”) seeking property and spousal maintenance orders pursuant to the relevant provisions of the Family Law Act 1975 (“the Act”).
The wife’s application is opposed by the husband. The husband also seeks property orders.
The wife commenced these proceedings by her Initiating Application filed on 15 July 2010, in which she sought various property orders. The wife later filed an Amended Initiating Application on 29 October 2010 in which she sought various parenting and property orders.
In his Response filed on 3 November 2010, the husband sought different parenting and property orders.
The parenting dispute was subsequently resolved as detailed below.
Background
Both parties provided the Court with separate brief chronologies of relevant events. While it is certainly not in all respects an agreed chronology, the husband’s chronology is reproduced below with the competing assertions made by the wife marked, where applicable.
[date omitted] 1960
The husband was born.
[date omitted] 1964
The Wife was born.
06.06.1986
The Husband was employed by [Q] as a [occupation omitted] [and he asserts that he was] earning $311.38 gross wages per week.
June/July 1989
The parties first met.
[date omitted] 1991
The parties married.
Late 1991
The parties purchased the last third share of the property at Property O in the sum of $40,000.00 (“the [O] Property”).
Mid 1992
The Husband sold his share in the property at Property H, [H] for the sum of $43,000.00 [the wife asserts $43,689.00].
Mid 1993
The parties purchased land at Property P, [P] for the sum of $150,500.00 (“the [P] Property”).
Mid 1994
The parties sold the [O] Property and received approximately $135,000.00 [the wife asserts $120,000.00 and that this occurred in early 1993].
February 1995
The parties commenced construction on the [P] Property [the wife asserts this was in 1993/4].
16.02.1997
The wife asserts she receives inheritance of $14,714.00 from her paternal grandmother.
Mid 1994 to
August 1995The parties rented a property at Property M, [M].
24.08.1995
The parties commenced residing at the [P] Property.
1997
The Wife took early maternity leave when she fell pregnant with [W] [the wife asserts this was in June 1997].
[date omitted] 1997
[W] was born.
May 1998
The wife asserts that after having returned to work for [Q] in March 1998, she commenced unpaid maternity leave.
[date omitted] 1999
[X] was born.
20.09.1999 to 21.11.1999
The Husband took paternity leave to help the Wife care for the children.
Mid 2001
The parties purchased a Toyota Hi Ace car [the wife asserts this was in 2000].
Late 2001
The parties renovated “the Former Matrimonial Home”[1] [not referred to by the wife].
[date omitted] 2001
[Y] and [Z] were born.
23.02.2002
The Wife ceased working for [Q].
October 2006
The parties purchased Property B, [B] (“the Former Matrimonial Home”) for the sum of $530,000.00 [the wife asserts that this occurred in December 2006].
21.09.2009
The parties separated [the wife asserts this was on 06.01.2010].
06.01.2010
The Husband vacated the Former Matrimonial Home.
15.07.2010
The Wife commenced these proceedings.
November 2010
The wife asserts that the parties’ son, [Y], was diagnosed with dyslexia.
August 2011
The wife asserts that the Toyota Hi Ace was sold for $5,300.00.
17.01.2012
The Court made final parenting Orders by consent.
[1] Presumably the [P] Property.
Not mentioned in either parties’ chronology, but a point which became increasingly relevant on the wife’s case at the Final Hearing was an alleged loan of $18,000.00 made by the wife’s mother to the wife on 10 February 1989. [2] The wife alleges that this sum was invested in a GIO bond that matured in 2000, resulting in a payment to the wife of $26,893.00. The wife asserts that this amount, together with some 10 further transactions[3] constituted a total loan amount from the wife’s mother to the wife of some $71,000.00.[4] Of this amount, $56,000.00 was disputed by the husband at the Final Hearing.[5]
[2] Transcript, 20 February 2012, at p.60.
[3] Ibid, at p.64.
[4] The wife’s affidavit sworn on 28 June 2010 and filed on 15 July 2010, at [23].
[5] Transcript, 21 February 2012, at .68.
It is somewhat surprising that the parties’ respective chronologies failed to refer to the parties’ agreement to borrow certain monies from the wife’s brother, Mr H. The wife does make reference to this loan (and the loan asserted as due and owing to her mother) in her case outline submissions relevant to “section 75(2) factors”. Regardless, there is agreement between the parties that they borrowed the sum of $100,000.00 in mid-2007 and subsequently evidenced this loan in a document styled “Unsecured Loan Agreement” which was signed by the parties on 17 December 2008 (see Exhibit “AW15”). The tendered document makes references to the loan being required “to enable the Borrower to purchase Property B, [B]”. Of some relevance to the wife’s argument was the wording of a particular recital (being “Recital A”) referred to in the tendered document. This particular recital makes reference to the possibility of further monies being advanced, and further states that the “liability of the Borrower shall be joint and several. This means that each Borrower if fully responsible for all obligations set out in this Loan Agreement.” I will return to this document later in this decision. That said, while the husband admits that further monies were advanced to the parties by Mr H, he asserts that the total debt due and owing is $155,500.00. This is disputed by the wife (and Mr H) and they assert that a greater amount is due and owing by the parties that includes monies advanced to the wife post-separation, including monies advanced during the course of these proceedings.
This matter first came before me in my duty list on 6 September 2010. On that occasion, I made an Order that the parties attend a Conciliation Conference on 9 November 2010.
However, on 3 November 2010, following the receipt in Chambers of correspondence from the husband’s solicitors, the parties participated in an interim hearing before me as to whether the Conciliation Conference on 9 November 2010 should proceed. This issue was somewhat overshadowed by a recovery order application brought by the wife with respect to the three sons of the parties’ relationship and a competing application by the husband for the boys to live with him.
As stated, the parties were eventually able to agree on final parenting Orders and these were made by me in Chambers on 17 January 2012.
Nevertheless, paragraphs 6 to 9 of my ex tempore decision[6], delivered on 3 November 2010, the date of the interim hearing, provide a useful background of the matter:
[6] Lester & Lester [2010] FMCAfam 1352.
“6. It would appear the parties commenced cohabitation from their marriage on [date omitted] 1991 and separated, on the wife’s evidence, on 6 January 2010, although the husband asserts it was on 21 September 2009, [details of date omitted], although he admits that he left the former matrimonial home on 6 January 2010.
7. There are four children of the marriage; namely [W], born [in] 1997 (‘[W]’), and the boys.
8.The matter initially came before the Court on 6 September 2010 and on that occasion Mr Ziade appeared for the wife, and Ms Scanlan appeared for the husband. Given the property nature of the application at that time, orders were made as stated for the parties to attend a conciliation conference and for the husband to file his response and supporting documents by 27 September 2010. Mr Ziade, by his letter to chambers dated 19 October 2010, sought to have the matter relisted because of the failure of the husband to file his responding documentation by the due date.
9. An order was made by the Court in chambers on 27 October 2010 which stated:
“THE COURT ORDERS THAT:
1. All extant applications be adjourned to this Court on 3 November 2010 at 9:30am for mention (“the mention hearing”).
AND THE COURT NOTES THAT:
A. The Court is in receipt of correspondence from Mr Ziade, legal representative for the Applicant Wife dated 19 October 2010 (“the correspondence”) seeking for the matter to be re-listed in light of the Respondent not filing material in accordance with the Orders made by this Court on 6 September 2010.
B. The purpose of the mention hearing is to consider whether the matter should remain listed for a conciliation conference on 9 November 2010 at 11:00am.’” [7]
[7] Ibid, at [6] – [9].
Relevant to the property dispute, on 3 November 2010, I made Orders vacating the Conciliation Conference on 9 November 2010 and set a timetable for the husband to file and serve an Amended Response, affidavit and a Financial Statement.
On 9 December 2010, the matter again returned before me and I again set the matter down for a Conciliation Conference on 14 March 2011. On that occasion, I also made a costs Order in favour of the wife against the husband.
The Conciliation Conference proceeded on 14 March 2011 before Registrar Stow-Smith, however the property issues were not resolved.
Accordingly, when the matter again returned before me on 24 March 2011, I made Orders, inter alia, setting the matter down for Final Hearing on 20 February 2012 (“the Final Hearing”) with an estimated duration of not more than three (3) days.
On 30 June 2011, the matter came before me again, on which occasion the parties agreed to Orders for a partial property settlement in the following terms:
“1. Within seven (7) days of these Orders, by way of partial property settlement, the Respondent do all acts and things necessary to effect the transfer to the Applicant of the ownership and registration of the Toyota Hi Ace vehicle with the registration number [omitted] (‘the vehicle’).
2. In the event that the Applicant sells the vehicle, within seven (7) days of such sale, the Applicant provide to the Respondent’s solicitors:
a. a receipt for such sale identifying the purchaser; and
b. a Red Book valuation for the vehicle obtained not more than two (2) days prior to the date of sale.”
The matter came next before the Court for mention on 2 February 2012, on which occasion the Court, with the concurrence of the parties’ legal representatives, vacated the third hearing day of 22 February 2012, having been assured by the legal representatives that the matter would be contained two 2 hearing days. Unfortunately, this assessment eventually proved to be rather too optimistic, as the matter ended up impinging upon not only a third hearing day on 22 February 2012 but ran briefly into a fourth, on 23 February 2012. I note, however, that on 23 February 2012 the parties were able to agree that the matter did not need to continue further on the issue of interim spousal maintenance and that aspect of the case be adjourned generally. Consequently, judgment was reserved together with the questions of the husband’s costs of 23 February 2012 and wife’s costs of the substantive proceedings.
With the exception of the brief mention of the matter before me on
23 February 2012, at the Final Hearing the wife was represented by
Ms Dulhunty of counsel and the husband by Mr Fermanis of counsel.
Proposals
Wife’s proposal
In summary, the wife sought an outcome that she retain the Former Matrimonial Home and be paid the net proceeds (following payment of fees of sale, and any other liabilities) from the sale of the [P] Property. Further, the wife seeks that the husband be liable for the repayment of the loans from the wife’s mother and brother. The wife seeks that title in the Hi Ace vehicle be transferred to her and title in the Holden Rodeo be transferred to the husband. With regard to superannuation, the wife seeks a splitting order that would see some 82% of the husband’s superannuation, that is, $300,000.00, allocated to her. The wife also seeks an order that the husband pay her spousal maintenance of $450.00 per week for a period of 104 weeks from the date that the mortgage over the Former Matrimonial Home is discharged. Finally, the wife seeks an order that the husband ensure that she and the parties’ children remain entitled in perpetuity to the benefits of the husband’s [Q] staff travel and booking rights.
As to specific orders, the wife sought the following at the Final Hearing:[8]
[8] See wife’s Minute of Orders annexed to her Case Outline document and marked “A”.
“1. That within 28 days from the date hereof do all acts and things and execute all documents, instruments and writings necessary to transfer to the wife all of the husband’s right title to interest in the property known as Property B, [B], being the whole of the land in folio identifier [omitted] (the home) subject to the exsisting [sic] mortgage.
2 […]
a. The husband and the wife shall immediately list the property at Property P, [P] being the whole of the land in folio identifier [omitted] (the [P] property) for sale by private treaty with such agent as the President of the Real Estate Institute of New South Wales appoints, the costs of and incidental to such appointment to be borne equally by the parties.
b. The price for the purpose of such sale will be such as the parties agree upon but failing agreement will be the price nominated as a fair market value by a licensed valuer appointed by the President of the NSW Division of the Australian Institute of Valuers, the costs of such valuation to be borne by the parties equally.
c. The parties will each cooperate in every way with the agent including but not limited to:
i. Making the key available to the agent;
ii. Allowing inspection of the property at all reasonable times;
iii. Doing or saying nothing to hinder or prevent a sale being effected;
iv. The husband ensuring the property including the grounds are in a neat and clean condition at the time of the inspection by the agent and prospective purchasers.
v. Signing all documents requested by the agent in relation to the listing for sale of the property except a contract or agreement for sale which has not been authorised by the parties’ solicitor/conveyancer.
d. If the [P] property remains unsold, the wife may do all acts and things and sign all documents necessary to list the property for sale by public auction, on a date nominated by the agent and at such reserve price as nominated by the licensed valuer referred to in Order 2(b), the costs of such auction and such valuer to be borne by the parties equally. In the event that the bidding at the auction does not reach the reserve price the patties may negotiate with the highest bidders or any other interested person and effect a sale of the [P] property at a price which is not more than 10% below the reserve price. If the [P] property is not sold at the auction, the parties do all acts and things to list the property for sale pursuant to Orders 2(a), (b) and (c) at a price as agreed or failing agreement 15% [below] the reserve price for the auction.
3. On the settlement of the sale of the [P] property, the proceeds of sale be paid in the following manner and priority: -
a. All costs and expenses of sale including legal costs and disbursements, gents commission, valuers fees and auction expenses (including repayment of any such expenses as have been paid by either or both of the parties);
b. The amounts required to pay all council rates, water rates, insurances and land tax which may be outstanding on the home ant the [P] property.
c. The amounts required to discharge the mortgage on the home to the extent possible by the balance remaining.
d. Pay any balance remaining to the wife.
e. Should the amount paid pursuant to Order c. not be sufficient to discharge the mortgage on the home then the husband forthwith pay all amounts required to discharge such mortgage.
4 […]
a. Pending the transfer of the home pursuant to Order 1 and the payment of the amount in discharge of the mortgage on the home pursuant to Order 3(c) and(e) and the allocation to the wife of the base amount out of the husband’s superannuation pursuant to Order 9 the husband indemnify and keep indemnified the wife from all claims and demands whatsoever which are made by or on behalf of Mr H and the wife’s mother Ms H in respect of the loans made by the parties of about $158,000.00 and $71,000.00 respectively.
b. That following the transfer of the home pursuant to Order 1 and the payment of the amount in discharge of the mortgage on the home pursuant to Order 3(c) and (e) and the allocation to the wife of the base amount of the husband’s superannuation pursuant to Order 9 the wife indemnify and keep indemnified the husband from all claims and demands whatsoever which are made by or on behalf of Mr H and the wife’s mother Ms H in respect of the loans made by the parties of about $155,000.00 and $71,000.00 respectively.
5 […]
a. Pending the transfer of the home pursuant to Order I and the sale of the [P] property pursuant to Order 2 hereof, both the husband and wife are restrained from increasing any liability presently secured on either properties without the prior written consent of the other.
b. That pending the transfer of the home pursuant to Order 1 and the payment of the amount in discharge of the mortgage on the home pursuant to Order 3(c) and (e) and the allocation of the husband’s superannuation pursuant to Order 9, the husband pay all mortgage instalments (including any arrears) and all council rates, water rates, insurance, land tax and statutory charges and fees associated with the home and the [P] property and shall indemnify the wife in relation to same.
6. That the existing tenancies in respect of the [P] property and the home is hereby severed and the husband and wife shall hereafter hold their interest in both properties as tenants in common in equal shares.
7. The camera equipment, books, magazines, stamp collection and tools are to be divided between the husband and wife on the basis of the ‘pick-a-pile’ method.
8. The husband and wife shall do all acts and things and sign all documents necessary to transfer to the husband all of the wife’s right title and interest in Holden Rodeo motor vehicle registration number [omitted] and to transfer to the wife all of the husband’s right title and interest in Toyota Hi Ace motor vehicle registration number [omitted].
9. The husband’s Superannuation: -
a. That a base amount of $300,000.00 is allocated, as required by s.90MT(4) of the Family Law Act 1975 to the wife (Ms Lester) out of the husband’s (Mr Lester) interest in the [Q] Superannuation Plan.
b. That in accordance with s.90MT(l)(a) of the Family Law Act 1975: -
i. The wife is entitled to be paid the [sic] amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations of 2001; and
ii. The husband’s entitlement to payments out of his interest in the [Q] Superannuation Plan and the entitlement of such other person to whom a splittable payment may be payable, is correspondingly reduced by force of this Order.
c. That the Trustee of the [Q] Superannuation Plan (“The Trustee”) shall do all such acts and things and sign all documents as made necessary to: -
i. Calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, the entitlement created for the wife by clause (i) of this Order; and
ii. Pay the entitlement whenever the trustee makes a splittable payment out of the husband’s interest in the [Q] Superannuation Plan.
d. That these Orders have effect from the operative time and the operative time for this Order is 4 days from the date of the Orders.
e. That this Order binds the Trustee of the [Q] Superannuation Scheme Plan.
10. The husband forthwith do all things and sign all documents necessary to ensure the wife and the children [W] born [in] 1997, [X] born [in] 1999, [Y] and [Z] born [in] 2001 remain in the [Q] Entitlement Group Travel (at the [omitted] level) as a Buddy of the husband and further the husband ensure the wife and the children retain full online computer access to the staff travel and booking rights.
11. That as and from 14 days after the date discharge [sic] of the mortgage on the home the husband pay to the wife the sum of $450.00 per week by way of spousal maintenance for a period of 104 weeks.
12. That other than as herein provided, the husband and wife each be declared the sole and legal beneficial owner of all other items of property presently in their respective possession or control including, but not limited to, money, shares, real property, motor vehicles, entitlements to superannuation, furniture, furnishings and personal effects and each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
13. That the husband and wife shall do all acts and things and give all consents and execute all documents necessary to give effect to the Orders made herein.
14. In the event that either party refuses or neglects to execute any Deed or instrument, the Registrar of the Court shall be appointed pursuant to s.106A of the Family Law Act 1975 to execute such Deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the Deed or instrument.
15. The husband pay the wife’s costs of these proceedings.”
Husband’s proposal
In summary, the husband sought an outcome that would see the wife as the sole owner of the Former Matrimonial Home and the [P] Property, but also solely liable for the mortgage liability on the former and the costs of transferring the properties into her sole name. The husband further seeks that each party retain all rights, title and interest in any chattels and vehicles in their respective names, as well as to their respective superannuation entitlements.
As to specific orders, the husband sought the following at the Final Hearing:[9]
[9] See husband’s ‘Short Minute of Order Sought’ document.
“1. Within 28 days of the making of these Orders, the Respondent shall transfer to the Applicant the whole of his right, title and interest in the property situated at and known as Property B, (‘[B]’), being the land described in Folio Identifier [omitted].
2. Within 28 days of the making of these Orders, the Respondent shall transfer to the Applicant the whole of his right, title and interest in the property situated at and known as Property P, [P] (‘[P]’), being the land described in Folio Identifier [omitted].
3. The Applicant shall bear all the costs associated with compliance of Orders 1 and 2 above.
4. Simultaneously with the Respondent’s compliance with Orders 1 and 2 herein, the Applicant and the Respondent shall sign all documentation and take all reasonable steps to refinance and transfer the mortgage on the [B] property into the Applicant’s sole name.
5. Pending the transfer of the mortgage into the Applicant’s sole name in compliance with Order 4 herein, the Applicant shall indemnify and keep indemnified the Respondent against all payment and liability pursuant to any and all mortgages registered against the title of the [B] property together with all rates, taxes and outgoings of or with respect to the property of whatsoever nature and kind.
6. Apart from as provided otherwise herein the Applicant and Respondent shall have the sole right, title and interest in:
a. Any chattels, goods, furnishings, motor vehicles and other property which is, at the date hereof, in their possession respectively;
b. Any choses-in-action, moneys, shares, debentures, investments and superannuation entitlements which stand in their sole name or to their credit respectively at the date hereof.
7. That the Respondent shall indemnify and keep indemnified the Applicant with respect to all debts and liabilities in the Respondent’s sole name.
8. That the Applicant shall indemnify and keep indemnified the Respondent with respect to all debts and liabilities in the Applicant’s sole name.
9. Except as otherwise provided in these Orders, the Respondent and the Applicant each be declared solely responsible in relation to any and all liabilities in their respective names.
10.In the event that either party refuses or neglects to sign any document, deed or instrument required to give effect to any of the relevant orders referred to herein, then the Registrar of this Court be appointed pursuant to Section 106A of the Family Law Act 1975 (Cth) to execute such document, deed or instrument in the name of the party in default and to do all such acts and things necessary to give validity and operation to the said document, deed or instrument.”
Issues
The following issues were in dispute at the Final Hearing:
·the parties’ contributions made prior to the relationship;
·the parties’ contributions made during the relationship;
·the parties’ contributions made following the breakdown of the relationship;
·ascertaining the value of the net property pool given disputes between the parties as to the value of certain assets and asserted liabilities;
·whether the husband should be jointly liable with the wife for alleged loan amounts borrowed by the wife from her brother following the breakdown of the relationship;
·whether an order should be made obliging the husband to enable the parties’ children to be entitled to certain travel benefits provided by virtue of his employment with [Q];
·the division of the parties assets, liabilities and debts (including alleged loans from the wife’s mother and brother); and
·the parties’ respective future needs.
Evidence
Both parties provided the Court with oral and affidavit evidence as detailed below and were cross-examined.
Wife’s evidence
The following documents were relied upon by the wife:
·Amended Initiating Application filed on 29 October 2010;
·Application in a Case filed on 14 November 2011;
·the wife’s affidavit sworn on 28 June 2010 and filed on 15 July 2010;
·Updating Financial Statement sworn on 9 November 2011 and filed on 15 November 2011;
·the wife’s affidavit sworn on 9 November 2011 and filed on 15 November 2011;
·the wife’s affidavit sworn on 3 February 2012 and filed on 8 February 2012 (“the wife’s trial affidavit”); and
·the wife’s case outline document dated 16 February 2012, annexing a balance sheet and a Minute of orders sought.
The wife also relied on some 25 tendered documents. The wife provided little or no explanation as to why she did not annex any of these documents to any of her affidavits. Regardless, the documents tendered by the wife were marked Exhibits “AW1” to “AW25”.
In giving her oral evidence the wife sought, and was granted, leave to adduce further examination-in-chief by her counsel. Again, little or no explanation was given as to why this evidence was not included in her numerous affidavits.
The wife was also cross-examined by the husband’s counsel.
Overall, the wife presented as an articulate witness, generally polite, but prone to evasiveness at times and was somewhat unwilling to make concessions.
In addition, despite having filed no affidavit evidence from him and not averting in her case outline document to any intention to call him, the wife also sought, and was granted leave, at the final hearing, to adduce oral evidence from her brother, Mr H. Generally speaking, Mr H also presented as a polite and articulate witness. He was particularly frank in his admission that he had lent further monies to the wife in full knowledge that she had separated from the husband and was involved in family law litigation.[10] Despite his obvious generosity to the parties in facilitating a loan to them at a relatively low interest rate, I found some aspects of Mr H’s evidence unconvincing and somewhat convenient. This is discussed later in this decision.
[10] Transcript, 21 February 2012, pages 159-160.
Husband’s evidence
The husband relied upon the following documents:
·Response filed on 3 November 2010;
·Amended Financial Statement sworn and filed on 17 February 2012;
·the husband’s affidavit sworn and filed on 3 November 2010;
·the husband’s affidavit sworn on 18 February 2012 and filed in Court with leave on 20 February 2012, that is, on the first day of the Final Hearing (“the husband’s trial affidavit”); and
·the husband’s case outline document dated 17 February 2012 and Minute of orders sought.
The husband also relied on a number of documents tendered during the Final Hearing and these were marked Exhibits “RH1” to “RH7”.
The husband also presented generally as a polite and responsive witness.
Law and discussion
Introduction
Applications for spousal maintenance and property division are governed by the provisions of Part VIII of the Family Law Act 1975 (“the Act”).
The Court has the power to make a spousal maintenance order as it considers proper under s.74 of the Act subject to considering the relevant matters set out in s.75 of the Act. The power referred to in s.74 has been the subject of numerous decisions and comments by the Family Court in particular cases such as In the Marriage ofWilson (1989) FLC 92-033 and in the case of In the Marriage ofBevan (1993) 19 Fam LR 35 (“Bevan”).
In Bevan, the Full Court of the Family Court of Australia (“the Full Court”) provided the following checklist when considering the exercise of the power under s.74 of the Act:[11]
[11] In the Marriage ofBevan (1993) 19 Fam LR 35 at 42 (per Nicholson CJ, Lindenmayer and McGovern JJ).
“[W]e would state the law as being that an award of spousal maintenance requires:
(1)a threshold finding under s 72;
(2) consideration of s 74 and s 75(2);
(3) no fettering principle that pre-separation standard of living must automatically be awarded where the respondent's means permit; and
(4) discretion exercised in accordance with the provisions of s 74 with reasonableness in the circumstances'’ as the guiding principle.”
As indicated, s.75(1) of the Act is relevant in these proceedings and states:
“In exercising jurisdiction under section 74, the court shall take into account only the matters referred to in subsection (2).”
Section 75(2) provides a mandatory list of matters to be considered. I will return to this provision, and the relevant factors contained therein, later in this decision. That said, it is worth noting now that s.75(2)(n) and (na) state that the Court must consider:
“(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party;
….
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage;”
Moreover, s.79(4)(e) of the Act requires inter alia, in the context of a property application, that the Court must take into account:
“the matters referred to in subsection 75(2) so far as they are relevant;”
For the sake of completeness, s.75(3) of the Act states:
“In making a spousal maintenance order, the Court must disregard any entitlement of a party in need to an income tested pension, allowance, or benefit.”
Section 79(1) of the Act provides that the Court may make such orders as it sees fit to alter interests in matrimonial property. The Court’s discretion is not unlimited and must be exercised in accordance with the factors set out in the legislation and, more specifically, s.79(4) of the Act. I will consider these factors shortly.
With respect to the general powers of the Court, in financial proceedings s.80(1)(b) allows the Court to make the order for payment weekly, monthly, yearly or periodic sum. Section 80(1)(h) allows the Court, inter alia, to make an order pending the disposal of the proceedings or until further order.
I will now consider the property dispute between the parties in this case before turning to the specific issue of the spousal maintenance claim by the wife.
Property division
The preferred approach to the exercise of the discretion has been outlined in numerous decisions of the Full Court, such as in In the Marriage ofHickey (2003) 30 Fam LR 355; (2003) FLC 93-143.
The preferred approach involves four interrelated steps:[12]
·Step 1: identify and value the parties’ property, liabilities and financial resources as at the date of the hearing;
·Step 2: identify and assess the parties’ “contributions” within the meaning of ss.79(4)(a), (b) and (c) of the Act and determine the parties’ contribution-based entitlements expressed as a percentage of the net value of the parties’ property;
·Step 3: identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g) of the Act including, because of s.79(4)(e) of the Act, the matters referred to in s.79(2) of the Act so far as they are relevant, and determine the adjustment, if any, that should be made to the contribution-based entitlements of the parties determined at Step 2; and
·Step 4: consider the effects of the findings of steps 1-3 and resolve what order is just and equitable in all of the circumstances of the case.
[12] L Young & G Monahan, Family Law in Australia, 7th ed, LexisNexis Butterworths, Australia, 2009, pp.614-615.
Step 1: the asset pool
The parties provided separate ‘Balance Sheet’(s). By the conclusion of the Final Hearing the parties remained unable to agree on a jointly-prepared document.
Based on submissions by both counsel and further questioning by the Court, the following table, drawn from the ‘Balance Sheet’ prepared by the wife, represents the agreed assets and liabilities of the parties including superannuation entitlements, unless otherwise stated:[13]
[13] In the table, ‘H’ refers to property registered in the husband’s name or otherwise legally owned by him or in his possession; ‘W’ refers to property registered in the wife’s name or otherwise legally owned by her or in her possession and ‘J’ denotes property registered in the joint names of the husband and the wife.
No. (Non-superannuation) Assets Valuation 1 Property B, [B] (J) $550,000.00 2 Property P, [P] (J) $440,000.00[14] 3 2005 Holden Rodeo vehicle (J) (in husband’s possession) $10,000.00 4 Personal property (J) $35,000.00[15] 5 Husband’s household contents (H) $3,500.00[16] 6 Wife’s household contents (W) $2,000.00 7 Husband’s [Q] Credit Union account (H) ($786.00) (W)[17]
($815.00) (H)[18]8 Husband’s [Q] Shares (289 Shares) (H) $472.00[19] 9 Wife’s [Q] Shares (3,152 shares) (W) $5,043.00[20] 10 Add-back of proceeds of sale of Wife’s Hi-Ace vehicle (W) $5,300.00 11 Add-back of proceeds of sale of Husband’s [Q] Shares (H) $10,855.00 12 (Disputed) Add-back of monies removed by Husband from Mortgage Account (J) $9,510.00 (W)
$Nil (H)[21]Sub-Total (Non-superannuation assets) To be determined No. Liabilities Valuation 13 Mortgage on [B] property (J) $428,000.00[22] 14 Mortgage on [P] property (J) $Nil 15 Loan from Mr H (J) $158,388.00 (W)[23]
$125,718.00 (H)[24]16 Loan from Ms H (J) $71,000.00 (W)[25]
$15,000.00 (H)[26]17 Husband’s Westpac MasterCard credit card debt of $2,200.00 (H) Not included[27] 18 Husband’s American Express credit card debt of $7,600.00 (H) Not included[28] Sub-Total (Liabilities) To be determined No. (Superannuation) Assets Valuation 19 Husband’s Superannuation (H) $356,00.00[29] 20 [A] Flexible Lifetime Plan (W) $150,341.00[30] 21 [H] Superannuation Plan (W) $3,414.00[31] Sub-Total (Superannuation assets) $509,755.00 [14] There was ultimately agreement between the parties that the value of the [P] property was $440,000.00: see Transcript, 22 February 2012, pages 72.
[15] The Court was advised at the commencement of the Final Hearing that the parties had reached agreement on the value and division of personal property: see Transcript, 20 February 2012, pages 5-6.
[16] The Court was also advised at the commencement of the Final Hearing that the parties had compromised on the estimated value of the Husband’s contents and agreed on a figure of $3,500.00 which was the mid-range between their respective estimates: see Transcript, 20 February 2012, page 6.
[17] The wife relies on the negative-balance figure asserted by the husband in his Financial Statement sworn ands filed on 17 February 2012 (Item 37).
[18] This is the figure asserted by the husband at the commencement of the Final Hearing and is a negative balance that incorporates recent bank charges: see Transcript, 20 February 2012, page 7.
[19] This is based on a share price of $1.60 per share proposed by the wife and agreed to by the parties: see Transcript, 20 February 2012, page 8.
[20] Ibid.
[21] Although the figure of $9,510.00 was included by the husband in his Balance Sheet, the need for this amount to be added-back by him is disputed: see Transcript, 20 February 2012, page 10.
[22] By the conclusion of the Final Hearing there was agreement that the current loan balance amount due was $428,000.00: see Transcript, 22 February 2012, page 69.
[23] The amount asserted by the wife in her balance sheet was $155,500.00, however during her closing address Ms Dulhunty referred to an increased figure of “$158,000.00”: see Transcript, 22 February 2012, page 70. Based on the submissions of both counsel (see footnote 23 below) I am satisfied that the wife now asserts that a higher figure of $158,388.48 is due and owing.
[24] While the husband referred to the figure of $155,500.00 in his balance sheet, during his closing address Mr Fermanis referred to an asserted figure owing of $125,717.97: see Transcript, 22 February 2012, page 45. The husband disputes that the further sums advanced to the wife and totalling $32,670.51 should be added as a matrimonial liability: see Transcript, 22 February 2012, page 45.
[25] See wife’s balance sheet; see also see Transcript, 22 February 2012, page 70.
[26] While the husband referred to the figure of $71,000.00 in his balance sheet, during his closing address Mr Fermanis confirmed that the husband only conceded that a debt of $15,000 was owing to the wife’s mother: see Transcript, 22 February 2012, page 46.
[27] Although these details were included in the wife’s balance sheet, they were not asserted as a matrimonial debt by the husband in his balance sheet.
[28] Ibid.
[29] This figure was agreed to by the parties at the commencement of the Final Hearing: see Transcript, 20 February 2012, page 13.
[30] Ibid.
[31] Ibid.
Given the above, the parties are only in disagreement in relation to the following alleged matrimonial assets and liabilities:
·the (negative) balance of the husband’s [Q] credit union account;
·whether the husband should be required to ‘add-back’ the sum of $9,510.00 removed from the parties’ mortgage account;
·the amount of money owing by the parties to the wife’s brother and the characterisation of the further sums allegedly advanced by the wife’s brother; and
·the amount of money owing by the parties to the wife’s mother and the characterisation of the further sums allegedly advanced by the wife’s mother.
Given that the wife also sought orders in respect of the husband’s [Q] ‘buddy’ group travel entitlements (“the entitlement”), some additional questions arise for consideration; namely:
·is the entitlement an asset or financial resource?;
·what is the value (if any) that should to be attributed to such an entitlement?; and
·is the entitlement capable of transfer from the husband to the wife?
In the event that the Court was so persuaded to consider making such an order in favour of the wife, then clearly an issue of procedural fairness arises as the wife produced no evidence at the Final Hearing that [Q] have been provided with notice of her (potential) claim.
Given the parties’ agreement over the division of personal property, it will be removed from the net asset pool.
I will now consider these issues in light of the evidence and submission.
Husband’s [Q] credit union account
The fact that the parties were in disagreement over a sum of $29.00 provides a good example about the level of mistrust and animosity they mutually share.
Regardless, given the absence of evidence from the husband as to why this credit union account had a negative balance (for much of the duration of these proceedings and as at the date of the Final Hearing), the Court has formed the view that it should not be included as a (negative) asset or liability of the relationship.
Add-back by husband of $9,510.00
The wife seeks that the husband ‘add-back’ the sum of $9,510.00 which he acknowledges that he removed from the parties’ joint mortgage account in June 2010.[32]
[32] See husband’s affidavit sworn 18 February 2012 and filed in Court on 20 February 2012, paragraph 5.
The husband explains his reasons for making the draw-down in paragraphs 2 to 4 and 6 of his trial affidavit. In summary, the husband asserts that he incurred significant family-related expenditures during the initial post-separation period including the payment of medical bills for the wife. The wife acknowledged some of these expenditures under cross-examination and agreed she had held a supplementary credit card billed to the husband until June 2010.[33]
[33] Transcript, 21 February 2012, page 137.
Given these circumstances, I am satisfied that these expenditures were reasonably incurred and that it was not unreasonable for the husband to seek to finance the incurred debt by a draw-down from the mortgage account.
Consequently, the sum of $9,510.00 will not be added back into the net property pool.
Mr H loan
As stated, the parties agree that they borrowed the sum of $100,000.00 from Mr H in mid-2007 and subsequently signed a document to that effect on 17 December 2008 (see Exhibit “AW15”). I previously referred to the loan obtained by the parties from the wife’s brother above.
The parties also apparently agree that, with interest, the debt due to
Mr H was at least $125,718.00 as at the date of the Final Hearing. Their disagreement is over whether the further monies allegedly advanced to the wife (and totaling $32,670.51) should be added as a matrimonial liability.[34][34] Transcript, 22 February 2012, page 45.
The wife refers to the alleged loan of the further monies in paragraph 7 of her trial affidavit. She also relied on copies of various items of correspondence allegedly sent by her brother to herself and the husband. This correspondence was tendered in evidence and became Exhibits “AW8” and “AW9”. In his letter to the wife dated 16 February 2012, Mr H asserts that he advanced the sum of $5,000.00 on each of the following occasions (a total of $30,000.00):
·15 April 2010;
·7 June 2010;
·8 October 2010;
·1 November 2010;
·7 March 2011; and
·4 July 2011.
The said letter also refers to a further advance being made on 17 November 2011 but the amount is not legible to the Court. It may be an amount of $5,500.00. This is because the said letter refers to “a capital repayment of $5,000.00” being made on “31 August 2011” and later refers to the “additional monies where $30,500.00 is outstanding”. I also note that in closing submissions the parties appeared to concur that with interest, the additional monies outstanding totaled $32,670.51.[35]
[35] Ibid.
Somewhat surprisingly, the wife chose not to have Mr H on affidavit. Ms Dulhunty argued that this was because her client had believed that the loan to her brother was conceded, or at least had been previously conceded by the husband (eg. as part of the conciliation conference process).[36] More persuasively, Ms Dulhunty referred the Court to the husband’s most recent Financial Statement sworn and filed on
17 February 2012 where the husband refers to a debt owing to the wife’s brother and states his 50% share as being $75,000.00.[37] That said, the husband subsequently resiled from this evidence following “some calculations” he did just prior to the start of the Final Hearing,[38] I agreed there was merit in the wife calling Mr H to give evidence in order to clarify this aspect of the parties’ dispute.[36] Transcript, 21 February 2012, at page 142.
[37] Ibid, pages 144-145.
[38] Transcript, 22 February 2012, at page 9.
In his oral evidence, Mr H stated that that he provided the parties (to date) with monies totaling “about $155,500.00” and that repayment remained outstanding.[39] He asserted that these monies were advanced pursuant to the ‘loan agreement’ they had entered into (see Exhibit “AW15”). Mr H demanded repayment of the loan by his separate letters to the parties dated 14 March 2011 (Exhibit “AW9”). I note that this is the same date that the parties attended for a Conciliation Conference before Registrar Stow-Smith. That said, Mr H rescinded his calling-in of the loan in his separate letters to the parties dated
30 June 2011 (Exhibit “AW9” and “RH5”). The letter(s) stated inter alia that Mr H had discussed the “current loan document” with the wife and he had agreed to an extension of the “expiry date” to “31 December 2011”. I also note that the relevant letter was handed to the husband when the parties were before this Court on 30 June 2011.[39] Transcript, 21 February 2012, at page 151.
Mr H also asserted that certain monies were due and owing by the parties in respect of a alleged loan(s) made by his mother to the parties. In his oral evidence Mr H stated:
“My mother is aged 87 years, and not in good health. I help her with her financial transactions. I have been aware, for some years, that the parties owe her about $71,000. I believe I would know if this loan had been repaid, or forgiven, and as far as I know, it has not been repaid or forgiven.”[40]
[40] Ibid.
Although the alleged loan(s) by Ms H are discussed further below, the wife asked the Court to find that the asserted liability had been transferred between Mr H and his mother with the consequence that the parties now owed Mr H a total capital sum of $171,000.00 plus interest.
Mr H was cross-examined in relation to the asserted transfer of the loan liability from his mother. He agreed that a document styled ‘Addendum’ to the alleged Loan Agreement had been prepared by him (see Exhibit “RH4”) but had not been signed by the parties and nor was it dated.[41] That document purported to evidence the transfer of the asserted liability from Ms H. Mr H stated that this document was created:
“… approximately – I couldn’t say how many months, but several months after the initial loan document was signed in December 2008, because it had taken 18 months to get that document signed by Mr Lester. I became worried for my mother’s money, and that’s why we were looking at the addendum to my loan. It was given, and I was told, ‘We will look at it’, and that’s the last I heard of it.”[42]
Mr H denied that the relevant document had been created by him after the parties separated.[43] Mr H also stated that the wife “wanted to sign” but that “Mr Lester wanted to think about it”.[44] That said, Mr H acknowledged that his sister had not signed it and gave the explanation that it was “because both [parties] were going to sign it together”.[45]
[41] Ibid, pages 158-159.
[42] Ibid, page 159.
[43] Ibid.
[44] Ibid, page 160.
[45] Ibid.
Mr H further confirmed under cross-examination that he was not aware of any existence of any loan documents created by Ms H that would tend to suggest that his mother loaned the parties the sum of about $71,000.00.[46]
[46] Ibid, page 156.
Mr H also confirmed under cross-examination that he had advanced further sums of money to the wife totaling $30,500.00 as detailed in his letter to her dated 16 February 2012 (Exhibit “AW8”).[47] That said,
Mr H acknowledged that on each occasion that he had advanced the further sums to the wife that he had not consulted the husband or presumably obtained the husband’s agreement.[48][47] Ibid, page 154.
[48] Ibid, pages 154-155.
In re-examination, Mr H stated that he had not consulted the husband about these additional advances to the wife because:
“… the loan was initially done as joint and several. Mr Lester had already left the matrimonial home. In about – I think it was – the first one was April 2011, as my sister spoke to me, she had no money to support herself, and/or the children, and that’s why the initial loans, and the continuing loans were made after that period, and subsequently, to pay the mortgages as well …”[49]
In her evidence, the wife also made a reference to her belief that as the loan agreement was “joint and several” she could borrow further advances from her brother so that she “could maintain the family home, the payments of the mortgage”.[50]
[49] Ibid, page 160.
[50] Ibid, page 72.
As previously stated, the relevant paragraph(s) of the loan document (Exhibit “AW15”) are contained in the recitals and states:
“A.The Borrower is indebted to the lender for the amount of the loan as set out below in clause 1. The liability of the Borrower shall be joint and several. This means that each Borrower is fully responsible for all obligations set out in this Loan Agreement.
B. The lender has and may advance further moneys [sic] to the Borrower by way of loan.
C.The lender and the Borrower wish to formally record the terms of all borrowings past, present or future that might be made by the Borrower from the Lender and unless otherwise agreed in writing, the terms of this Loan Agreement shall apply to all such borrowings.”
Paragraph 1.3 of the loan document then states:
“1.3 The Borrower acknowledges that the Lender may at any time hereafter lend further moneys [sic] to the Borrower. These further advances shall form part of the Loan and the terms of this Loan Agreement shall apply thereto.”
I note that both parties are named as “together the Borrower” in the document. This is noteworthy in that the joint and several liability of the parties to the loan agreement applies only to funds advanced by
Mr H to the parties jointly. The provision for defaults recognises separate nature of the parties that make up “the Borrower” as it provides for “any default by the Borrower either individually or collectively”.[51] This distinction would seem to make it clear that where the term “the Borrower” is specifically used in the agreement, the intention is that it must refer to both of the parties together, not either of them “individually or collectively”. Hence, loans covered by the loan agreement are only those loans which were advanced to both of the parties equally. It should go without saying that a loan made to both parties would necessarily occur with the actual knowledge and consent of both parties forming the borrowing entity. It follows, then, that a loan to one individual – or with the knowledge of only one individual – who forms part of “the Borrower” is not a loan contemplated by the loan agreement and subject to the application of joint and several liability, regardless of the manner in which the loan funds may have thereafter been applied.[51] Paragraph 2.1.3 of Exhibit “AW15”.
While it may be that both Mr H and the wife thought that the subsequent loaned monies were provided under the terms of the loan agreement and hence intended the loan agreement to apply, the husband did not share that notion because he was not apprised of the existence of additional loaned funds at the time they were advanced and did not consent to them. There is no shared belief between the parties that can re-animate the loan agreement in respect of the post-separation sums of money loaned.
This point ties closely with two broad problems that I have with the argument advanced by the wife. Firstly, as alluded to above, on construction of the loan agreement, I think it problematic that further monies can be advanced to one of the parties only rather than the collective “Borrower” which is clearly the two parties together. While I accept that both parties are individually liable for monies advanced under the terms of the loan agreement, in my view the loan agreement and the “joint and several” liability thereunder extends only to monies actually advanced to them both. There is also a procedural fairness argument because the husband was not consulted. Secondly, I find disturbing, as a matter of law and policy, that the monies were advanced to one party post-separation and with the clear knowledge that the wife had commenced property proceedings against the husband in the Federal Magistrates Court of Australia.
The Court might have been inclined to classify the $30,500.00 as a matrimonial debt incurred for the maintenance of matrimonial assets had the evidence been that the whole of the sum had been applied to the repayment of the mortgage over the Former Matrimonial Home. However, the wife’s evidence was that only a portion of the sum had been so applied and was inconclusive as to how much that portion amounted was:
“MS DULHUNTY: Can you tell the court what those moneys were used for?
‑‑‑Yes. They were predominantly used for the 50 per cent share on the mortgage which Mr Lester had not been paying since December 2010 up to this day. And he [that is, Mr H] also helped with some support with the children’s sporting activities and some other just day-to-day things when I was running short because I had been paying everything.
Could you tell the court how much of that money was applied to the mortgage, how much to other things?
‑‑‑Off the top of my head, there is an exact amount which I had written down in – approximate, it’s close to $20,000. I just can’t recall the exact figure off the top of my head.”[52]
[52] Transcript, 21 February 2012, page 72.
The fact that the funds were advanced in an unsecured transaction, from the wife’s brother, in a manner that could not be described on the evidence (in light of the Court’s findings with respect to the loan agreement), means that the Court is not comfortable with construing these funds as a matrimonial liability. Given that the funds are not covered by the terms of the Loan Agreement, there is no evidence as to the terms on which the funds are to be repaid, or even that debt is ever likely to be called in.
In the case of In the Marriage of Prince (1984) 54 ALR 467; 9 Fam LR 481 (“Prince”), a decision of the Full Court of the Family Court of Australia (“the Full Court”) (consisting of Evatt CJ, Pawley & Fogarty JJ), Evatt CJ stated as follows:
“The assessment of debts and liabilities is not necessarily arrived at by a strictly mathematical or accountancy approach in all cases. While some liabilities are charges upon the property which can be accurately assessed at a certain date, others are at large, or have not been precisely determined, eg tax liabilities: Kelly (1981) 7 Fam LR 762 at 767 ; [1981] FLC 91-108 at 76,801. In some cases the amount of the liability can only be estimated generally: Albany (1980) 6 Fam LR 461 at 466; [1980] FLC 90-905 at 75,717. The court can make an allowance for a particular liability if appropriate to do so. In some cases there are sufficient uncertainties as to the alleged liability to lead the court to disregard it entirely or partly eg a loan from a parent of the party not likely to be enforced: A f Petersens (1981) 7 Fam LR 402; [1981] FLC 91-095; Quirk (1983) (unreported). In other cases the court may take the view that because of the circumstances surrounding the incurring of the liability it ought in justice and equity to be wholly or partly disregarded in determining the appropriate order to make under s 79 as between the parties to the marriage.”[53]
The then Chief Justice’s comments in Prince have met with approval in a number of later decisions of the Full Court, including In the Marriage of Biltoft (1995) 126 FLR 385; (1995) 19 Fam LR 82 and Z & Z (2005) 34 Fam LR 296; (2005) FLC 93-241. Clearly, the Court has a discretion as to the characterisation of the post-separation loans from Mr H to the wife.
[53] (1984) 54 ALR 467 at 486.
In the present case, the funds were advanced and the evidence is that the wife has applied them partially for the maintenance of matrimonial assets and partly for the support of herself and the parties’ children. The funds borrowed from Mr H following the parties separation may therefore rightly be classified as a post-separation financial contribution made by the wife.
Consequently, the Court is not satisfied that the post-separation loan advances made to the wife by Mr H are a liability due under the loan agreement dated 17 December 2008, nor is the Court satisfied that the amount due and owing in respect of these loan advances is a matrimonial liability. That said, I am satisfied that the monies were borrowed and used by the wife for living expenses, including mortgage repayments for which she would be able to argue financial contribution towards the Former Matrimonial Home. The additional monies due and owing would also be relevant to the wife’s financial resources. However, only the sum of $125,718.00 owing to Mr H will be included as a liability in the net asset pool of the parties.
Ms H loan
I previously referred to the loans allegedly obtained by the parties from the wife’s mother, Ms H, above. In summary, the wife asserts that she was the beneficiary of loan of $18,000.00 made by her mother on 10 February 1989.[54] The wife alleges that this sum was invested in a GIO bond that matured in 2000, resulting in a payment to the wife of $26,893.00. The wife further asserts that this amount, together with some 10 further transactions[55] constituted a total loan amount from the wife’s mother to the wife of some $71,000.00.[56]
[54] Transcript, 20 February 2012, at page 60.
[55] Ibid, at page 64.
[56] The wife’s affidavit sworn on 28 June 2010 and filed on 15 July 2010, at [23].
I have also referred to the wife’s argument that the debt due to her mother has now been rolled into the debt due to Mr H.
While the husband conceded that the sum of $15,000.00 is due and owing to Ms H, he disputes that the further sum of $56,000.00 is due and owing.[57] He also disputes that any debt due to Ms H has been rolled into the debt due to Mr H.
[57] Transcript, 21 February 2012, page 68.
It is noteworthy that no evidence from Ms H was presented at the Final Hearing. In summary, the wife submitted that there were two reasons why this was so: firstly, there was evidence that the husband had previously admitted the loan due to Ms H; and secondly, Ms H was frail and elderly (although no medical evidence was tendered to support this submission).
Ms Dulhunty referred the Court to the husband’s earlier Financial Statement sworn and filed on 9 November 2010 (Exhibit “AW25”) where the husband refers to a debt owing to “Ms H” and states his 50% share as being $35,500.00.[58] I note that the husband (again) resiled from this evidence following the “calculations” he did just prior to the start of the Final Hearing.[59]
[58] Ibid, page 143.
[59] Transcript, 22 February 2012, at page 9.
Given these circumstances, I do not think it appropriate for the Court to draw any adverse inference[60] from the wife’s failure to call her mother to give evidence in these proceedings. That said, apart from some documents relevant to the asserted loan of $18,000.00 between the wife and her mother that was made in 1989, there is no other loan documentation before the Court. This was acknowledged by both the wife and Mr H in their evidence.
[60] Jones v Dunkel (1959) 101 CLR 298; for a discussion of the rule in Jones v Dunkel see Heydon, J.D. (2004) Cross on Evidence (7th edition), Chatswood, New South Wales: Lexis Nexis Butterworths, [1215].
As to the concession of $15,000.00 made by the husband, I note that this relates to his acknowledgment that Ms H advanced the parties that particular sum in order for the parties to purchase the Toyota Hi-Ace motor vehicle.[61]
[61] Transcript, 22 February 2012, at page 11.
Overall, I agree with the submission of the husband that no evidence was led by the wife through either herself, Mr H or Ms H, as to the terms and conditions of the purported loans by the Ms H.[62] In addition, no evidence was presented of conversations establishing any agreements and, except for documents tendered by the wife, there were no documents evidencing transactions.
[62] Ibid, page 46.
That said, it is noteworthy that in her oral evidence the wife described her mother as being “extremely generous over the period of our marriage” and she asserted that her mother had “given us different volumes of cash at different times”.[63] The wife asserted that the alleged monies received were not always banked.[64] She stated that:
“What more than often happened was, if we were buying something, we would pay for it with our cheque and then she would be – she – you know, as it indicated, there was like 3000 here, 2000 here, as examples, as on that list, and she was exceptionally generous to the point when we moved into the Property B home, she said, “Here’s 5000.” Her condition, per se, was, “You are not getting another birthday present or anything like that. This is continuing, you know, as – as a loan, a generous thing, but I would like to see you get a water tank,” because we are moving into a bushfire area. Instead, the money was – ended up being used as a – the last payment on the – on the roof that was replaced, which too was important for the fire so that – because the tiling roof was not in good repair. So she was an exceptionally generous mother-in-law [sic] who helped us along the way, but there was – there are only certain instances, as we have displayed, that were documented per se, and it was – you know, it was – it was all on loan, knowing that if she wanted it back, that that was the provision, but she wanted to help us along the way if she could, and she would like her money back.”[65]
[63] Transcript, 21 February 2012, page 70.
[64] Ibid.
[65] Ibid.
While the Court is satisfied as to the probability of the wife’s mother providing the parties with monies over the years, the evidence does not establish by that such advances were loans.
Indeed, given the wife’s evidence, the Court is satisfied that such monies were more likely in the nature of a gift. Given the absence of evidence of intention, then as the Full Court stated in the case of In the Marriage of Kessey (1994) 18 Fam LR 149; (1994) FLC 92-495 (“Kessey”):
“…a contribution by a parent of a party to a marriage to the property of the marriage will be taken to be a contribution made by or on behalf of the party who is the child of the parent unless there is evidence which establishes it was not the intention of the parent to benefit only his or her child.[66]
In other words, in the alternative to arguing that such monies were a loan repayable by the parties, the wife can argue that these monies given by Ms H represent a financial contribution by the wife to the acquisition, conservation or improvement of the matrimonial property.
[66] In the Marriage of Kessey (1994) 18 Fam LR 149 at 161; (1994) FLC 92-495 at 81,150 (per Baker, Finn and McCall JJ).
Consequently, apart from the conceded sum of $15,000.00, the alleged loans due and payable to Ms H (or Mr H in lieu) will not be added as a liability in the net asset pool of the parties.
Husband’s [Q] travel entitlements
As stated, the wife seeks an order for the husband to sign all relevant documents to enable herself and the children of the marriage to
“…remain in the [Q] Entitlement Group Travel (at the [omitted] level) as a Buddy of the husband and further the husband ensure the wife and the children retain full online computer access to the staff travel and booking rights”.
Before going any further, the Court is troubled that the wife produced no evidence at the Final Hearing that [Q] were aware of her proposed claim and consequently I am satisfied that the husband’s employer has not been afforded procedural fairness. Regardless, the wife did, however, cause a subpoena to produce to be served on [Q] seeking inter alia:
“7. Records and documents showing all upgrade benefits available for Mr Lester (Staff Number [omitted]) with [Q] Staff Travel at this date.
8. Records and documents showing the names of all travel beneficiaries of Mr Lester, both group A and B, and their relationship to the employee Mr Lester from 1 June 2008 to 31 May 2011.
9. Records and documents showing who the current nominated Group A travel beneficiaries are for
Mr Lester[.]
10. Records and documents showing what benefits are available to the Group A beneficiary including but not limited to the type of travel available, how much travel has been accumulated, how much has been taken, and the current balance from 1 June 2008 to 7 June 2011.
11. Records and documents listing what travel benefits are available to the Group A beneficiary including the type of travel benefits whether high priority, long service leave stages and the like from 1 June 2008 to 7 June 2011.
12. Records and documents showing any and all tickets issued to any staff travel beneficiary of Mr Lester from 1 June 2008 to 7 June 2011.”
From the documents produced under subpoena, the wife tendered a document from [Q] purporting to detail the relevant company policy on concessional travel benefits for employees (Exhibit “AW13”).
The first question that arises is whether this entitlement an asset or financial resource. This question is an easy one for the Court to decide because there is absolutely no evidence before the Court that would indicate that the concessional travels benefits are property in the hands of the employee. The entitlement is clearly in the nature of a contractual right or discretionary employee benefit and consequently is no more than a financial resource to the husband while he remains an employee of [Q].
The second question to consider, namely what value (if any) should to be attributed to such an entitlement, is also a question whose answer is unassisted by the evidence. While free or discounted air travel reduces the cost of travel to the husband (or his listed ‘buddies’), it is subject to a number of rules and, as stated, is clearly contingent on the husband remaining an employee of [Q].
This brings the Court to the third question; is the entitlement capable of transfer from the husband to the wife? There is nothing in the evidence to suggest that the husband has the power to transfer the entitlement to the wife. While there is evidence in the subpoenaed material that the employee may nominate ‘Group A’ beneficiaries[67] including the “employee, spouse or domestic partner or travel companion and children under 26 years of age”, it is also clear that a Group A beneficiary may be changed in certain circumstances including situations where “the employee marries or enters a domestic partner relationship” or where the “the employee divorces his/her married spouse” (see Exhibit “AW13”).
[67] The issue of Group B beneficiaries (being parents and children 26 years and over) is not applicable on the facts before the Court.
The wife’s complaint appears to be that she and the children were clearly listed as Group A beneficiaries in happier times and that she and the children would benefit from a continuation of their access to this employee benefit. I note that there is evidence before the Court that establishes that the wife and children benefitted from a trip to the United States as recently as March 2010 (see Exhibit “AW13”).
In her oral evidence the wife stated that, currently:
“… although I am listed on [Exhibit “AW13”], I have been removed and replaced by Mr Lester’s current partner, who is also a [Q] staff travel employee. The children are also listed but, at this point, cannot access this entitlement, which is until they are 26 years of age, because of the no contact, etcetera, with the consent orders regarding the children.”[68]
[68] Transcript, 21 February 2012, page 84.
In other words, the husband has now listed his new partner in lieu of the wife, and further, the wife asserts that because he has no on-going relationship with the children, they are no longer ‘children’ for the purposes of Group A. While it is not clear from the policy document whether the wife’s assertion in respect of the children is correct, it is clear that given the estrangement between the husband and the children, he has chosen to disinherit (for want of a better word) them from access to his travel entitlement.
The wife also seems to be of the view that the husband’s partner, who is currently employed by [Q] and will shortly commence maternity leave, should access her own travel entitlements. This view is somewhat problematic for at least two reasons: firstly, it is not readily clear to the Court whether any travel entitlements would be suspended during periods of maternity or extended leave; and secondly, there is no evidence before the Court that the husband’s partner proposes to continue in her current employment into the years ahead.
During the Final Hearing I asked Ms Dulhunty to direct me to the relevant power that the Court would use to make the order sought by the wife and whether there were any authorities that might support the wife’s argument. Ms Dulhunty referred the Court to s.80(1)(f) of the Act and to the case of Van Essen & Van Essen [2000] FamCA 775; (2000) 26 Fam LR 456; (2000) FLC 93-028 (“Van Essen”).[69]
[69] Transcript, 22 February 2012, pages 56-57.
I have previously referred to some other paragraphs of s.80(1) of the Act. For completeness, s.80(1) states:
“(1) The court, in exercising its powers under this Part, may do any or all of the following:
(a) order payment of a lump sum, whether in one amount or by instalments;
(b) order payment of a weekly, monthly, yearly or other periodic sum;
(ba) order that a specified transfer or settlement of property be made by way of maintenance for a party to a marriage;
(c)order that payment of any sum ordered to be paid be wholly or partly secured in such manner as the court directs;
(d) order that any necessary deed or instrument be executed and that such documents of title be produced or such other things be done as are necessary to enable an order to be carried out effectively or to provide security for the due performance of an order;
(e) appoint or remove trustees;
(f) order that payments be made direct to a party to the marriage, to a trustee to be appointed or into court or to a public authority for the benefit of a party to the marriage;
(h) make a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order;
(i) impose terms and conditions;
(j)make an order by consent;
(k) make any other order (whether or not of the same nature as those mentioned in the preceding paragraphs of this section), which it thinks it is necessary to make to do justice; and
(l) subject to this Act and the applicable Rules of Court, make an order under this Part at any time before or after the making of a decree under another Part.”
In response to Ms Dulhunty’s submission I indicated that I was unable to see how s.80(1)(f) was applicable.[70] In response, Ms Dulhunty suggested the use of s.80(1)(d).[71] I indicated to Ms Dulhunty that I failed to see how that provision was applicable and I politely suggested that perhaps s.80(1)(k) be considered.[72] I will return to this provision shortly.
[70] Ibid, page 60.
[71] Ibid.
[72] Ibid.
The wife asserts that her ability to earn a higher paid income is limited “as she is solely responsible for the care of the four children of the marriage” and “has the sole obligation of supporting, housing and maintaining” them.[96]
[96] See wife’s Case Outline document, page 3.
As stated, the four children range in age from 10½ to nearly 15 years and, pursuant to parenting orders made by me by consent on 17 January 2012, they live with the wife and she has sole parental responsibility for them. The parenting orders make no provision for the children to spend time with the husband. It is clear that the wife does not have any significant support from extended family to assist her in her care of the children. That said, it can be expected that as the children grow and develop they can assume more responsibility in assisting with their own care, particularly outside school hours. The wife also made assertions about the on-going medical needs of the children, and in particular their son [Y], but such assertions were unsupported by admissible evidence.
The wife gave evidence during cross-examination that at times when she was working casually during the period from 2007 to 2010, the children and the home were predominantly in the care of the maternal grandmother, Ms H, and, to a lesser extent (she asserted) the husband, who “did some in addition to what my mum was assisting with.”[97]
[97] Transcript, 21 February 2012, page 101.
The wife asserted that at the end of August 2011, she ceased working “because I have not been well myself and I need to take care of the children.”[98] In cross-examination, Mr Fermanis put it to the wife that she had been caring for the children while working before that time. The wife conceded that she had been suffering from stress, possibly due to the ongoing conflict between herself and the husband, including over parenting issues.[99]
[98] Wife’s affidavit sworn 9 November 2011 and filed 15 November 2011, at paragraph 6.
[99] Transcript, 21 February 2012, pages 127-128.
The wife also agreed in cross-examination that she had been and would continue to seek work that would allow her the flexibility to balance her parenting commitments. Moreover, she acknowledged that she would likely continue to benefit from the assistance of her mother, her brother, and of the parties’ eldest child, [W], in caring for the home and the younger children.[100]
[100] Ibid, pages 134-135.
In the circumstances, the wife appears to have the present capacity to re-commence work at least on a flexible, part-time basis and that ability is something that will only increase as the children continue to get older. The stresses that the wife has undoubtedly suffered will also, it is hoped, have diminished with the making of final parenting orders by consent on 17 January 2012 and will be further abated by the finality that this decision will provide.
The husband is a [occupation omitted] with [Q] and has been employed full-time by that [company] since 1986. In his Financial Statement filed 17 February 2012, the husband asserts that he currently earns the sum of $1894.00 per week before tax.
As referred to in the asset pool, both parties have substantial superannuation entitlements. I note again that there is agreement between the parties that their combined superannuation benefits $505,275.75. As at the date of the Final Hearing the wife has superannuation benefits totalling $149,402.00 and the husband’s superannuation benefits are $355,873.75.
(c) Whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
As stated, parenting orders were made by me on 17 January 2012, with the consent of the parties and (presumably the reluctant) support of an Independent Children’s Lawyer. Those orders provide for the wife to have sole parental responsibility for the four children of the marriage and for the children to live with her. There are no orders for the children to spend time with the husband. It is noteworthy that apart from the orders providing for the wife to cause the children to engage in the ‘Anchor’ (supporting children after separation program), the ‘Notations’ to the Minute attached to the Orders state the following:
“A. The Court notes that the father has indicated that he does not intend to spend time with or communicate with the children in the future. In the event the father’s position changes, any time or communication between the father and the children will take place as agreed in writing between the parties and subject to the wishes of the children.
B. The Court notes that the Independent Children’s Lawyer and Family Consultant Ms M will meet the children on Level 2 of the Sydney Registry of this Court on 23 January 2012 at 9am in order to discuss these final orders with them.”
(d) Commitments of each of the parties that are necessary to enable the parties to support:
(i) himself or herself;
(ii) a child or another person that the party has a duty to maintain
I refer again to the relevance of the above final parenting orders.
As stated, as part of her case, the wife also sought to assert that the children had particular needs and expenses. Indeed the wife attempted to present evidence of such in her affidavit material. This was the subject of objection by the husband at the commencement of the Final Hearing.[101] Given the lack of independent evidence before the Court in relation to these particular assertions, the Court is unable to find that these assertions have been sufficiently established. Moreover, when the Court raised the issue of whether these assertions were more properly to be considered in the context of a child support change of assessment or departure from administrative assessment order the wife confirmed that she had not sought such a change of assessment from the Child Support Agency.[102]
[101] See generally, Transcript, 20 February 2012, pages 26-33.
[102] Transcript, 20 February 2012, page 52.
The husband has re-partnered and his partner is expecting their child in August 2012.
(e) The responsibilities of either party to support any other person
I refer to the above commitments.
(f) The eligibility of either party for a pension, allowance or benefits…
I refer to the above comments.
(g) Where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable
This is a live issue in the case before me which I note again includes an application by the wife for spousal maintenance.
Much of the wife’s argument for a substantial property settlement and spousal maintenance appears to rest on her asserted need to continue to remain living in the Former Matrimonial Home rather than moving to a more affordable property, whether purchased or rented.
As previously stated, in the case of Bevan, the Full Court stated that, in considering the provisions relevant to spousal maintenance, there is: “no fettering principle that pre-separation standard of living must automatically be awarded where the respondent's means permit” and further stated that “the guiding principle” in the exercise of the Court’s discretion is “reasonableness in the circumstances”.[103]
[103] In the Marriage ofBevan (1993) 19 Fam LR 35 at 42.
As a general proposition, the Court accepts that the wife has a persuasive argument that the outcome of these proceedings should, where possible, produce an outcome whereby she and the children enjoy a reasonable lifestyle. That said, the reasonableness of her obtaining property orders that would, in effect, concede to her more than 90% of the matrimonial property, together with spousal maintenance, is highly questionable. The breakdown of the parties’ relationship has required the establishment of two households: one household where the wife will be the sole carer of the children of the marriage; and secondly, the other household where the husband will be, in all likelihood at least in the short term, the primary income earner. Given the size of the net asset pool, and available income of both parties, some compromises to the pre-separation standard of living is required and is reasonable.
(h) Extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income
This was not the subject of any particular submissions by either party.
As stated above, however, the wife is a trained and experienced [occupation omitted] and may be in a position to obtain suitable employment either through her past employers or with other entities.
(ha) The effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant
I am satisfied that on the evidence presented, there are sufficient net assets to satisfy the claims of all known creditors.
(j) Extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party
This consideration is not relevant to this dispute.
(k) Duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration
The parties cohabited for over 18 years. Throughout their marriage, the husband has continued in his employment as a [omitted] with [Q]. Prior to the marriage the wife was a [omitted] but left that career to work as a [omitted] with [Q]. The wife left her employment with [Q] after 13 years in 2002 which presumably followed upon her taking maternity leave following the birth of [Y] and [Z] in late 2001. The wife thereafter became the full-time homemaker and parent for the parties and their four children until she returned to casual employment as a [omitted] following the parties’ separation.
Given the wife’s previous background in [omitted] it is difficult to see how the marriage, or her extended role as the full-time homemaker and parent, has had any significant impact upon her earning capacity.
(l) Need to protect a party who wishes to continue that party's role as a parent
As stated, the children live with the wife and she has sole parental responsibility for them. The children currently spend no time with the husband and he does not presently seek any relationship with them. While the Court would urge the husband to reconsider his decision it is a reality that cannot be ignored for the purposes of this decision.
(m) If either party is cohabiting with another person – the financial circumstances relating to the cohabitation
As stated previously, the wife is not cohabiting with any other person.
The husband has re-partnered with his fiancé, Ms O, who is pregnant with their child. In his Financial Statement sworn and filed on 17 February 2012, the husband asserts that his partner’s average weekly income is $2,259.06.
Oddly, in the same Financial Statement, the husband inserts “Nil” totals in Part N. Presumably this was an error. That said, the Court has little evidence of the husband’s (and his partner’s) on-going expenses, apart from the details the husband includes in Parts B and G. The husband does assert in paragraph 11 of his trial affidavit that “Ms O is pregnant and our child is expected to be born in August 2012”. That said, there is no admissible evidence before the Court as to the financial implications that her pregnancy may have in respect of the husband’s financial circumstances. For example, there is no evidence before the Court as to whether the husband’s partner will be taking extended maternity leave, and if so, whether she proposes to resume her employment with [Q] following any extended leave.
That said, the Court notes that the husband did include expenditure details in Part N of his Financial Statement sworn and filed on
9 November 2010 (Exhibit “AW25”). Interestingly, while the husband asserts estimated total weekly expenditure of $387.00, he makes no reference to his relationship with Ms O. This is inconsistent with the submissions made to the Court by his solicitor on 3 November 2010 during a contested interim hearing in respect of parenting where it was stated that the husband had lived with Ms O “since August 2010”.[104][104] See Lester & Lester [2010] FMCAfam 1352 at [35].
Consequently, the Court finds this aspect of the evidence presented by the husband unsatisfactory.
(n) Terms of any order made or proposed to be made under section 79
I will consider this issue in the context of the wife’s spousal maintenance application.
(naa) Terms of any order or declaration made, or proposed to be made, under Part VIIIAB
This consideration is not relevant to the present dispute.
(na) Any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage
The husband asserts that he currently pays $1,375.67 per month (or approximately $317.46 per week) in child support as assessed by the Child Support Agency.[105] The husband also asserts that he registered himself for child support purposes “in late May 2010” and the wife was sent her first payment on “7th of July 2010”.[106] He further asserts that he has regularly paid his child support “every month” and that up to the date of the Final Hearing he had paid the wife an amount totalling “$21,171,71”.[107]
[105] See husband’s trial affidavit, paragraph 8 and his Financial Statement sworn and filed on 17 February 2012, item 31.
[106] Husband’s trial affidavit, paragraph 8.
[107] Ibid.
In her Financial Statement sworn 9 November 2011 and filed 15 November 2011 the wife asserts that she only receives the sum of $241.00 per week by way of child support.[108]
[108] See wife’s Financial Statement sworn 9 November 2011 and filed 15 November 2011, item 13.
I note that neither party exhibited or tendered a relevant child support assessment.
(o) Any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
The husband asserts that he has been required to borrow the sum of $50,000.00 from Ms D, who is his partner’s mother. He further asserts that this loan was necessary to pay debts including legal costs.[109] In support the husband exhibits a ‘Deed of Loan’ to his trial affidavit (Annexure D).
[109] Transcript, 22 February 2012, page 25.
Although I note that Ms D was not asked by the husband to give evidence in these proceedings, I am satisfied that the loan was made and remains outstanding.
There are no other factors which the justice of the case requires to be taken into account that have not been discussed previously in this decision.
(p) The terms of any financial agreement that is binding on the parties to the marriage
This consideration is not relevant to the present dispute.
(q) The terms of any Part VIIIAB financial agreement that is binding on a party to the marriage
This consideration is not relevant to the present dispute.
Section 79(4)(f): any other order made under this Act affecting a party to the marriage or a child of the marriage
As stated on several occasions throughout this decision, final parenting orders were made by me on 17 January 2012, with the consent of the parties and an Independent Children’s Lawyer. Those orders provide for the wife to have sole parental responsibility for the four children of the marriage and for the children to live with her. There are no orders for the children to spend time with the husband and I understand that they currently spend no time with the husband and that he currently does not seek any relationship with them.
I reiterate my earlier comment that the Court would urge the husband to reconsider his decision to disengage from the lives of the children of the marriage and I would further encourage him to seek the necessary counselling to enable a rapprochement to progress. Indeed, I am hopeful that once these final and bitterly contested property proceedings are concluded both parties will be in a better mental position to enable a thawing and improvement in their inter-personal relationship, and also in the relationship between the husband and the children.
Section 79(4)(g): any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage
I refer to paragraphs 176–178 of this decision.
Determination of section 75(2) and related factors
Overall, I am satisfied that the evidence supports that a substantial adjustment for ‘section 75(2) and related factors’ should be made in the wife’s favour.
I note that both parties were in agreement that a further adjustment in the wife’s favour should be made. They disagreed, however, as to the size of that further adjustment in percentage terms. While the husband, through Mr Fermanis, sought that such an adjustment be contained to “5 per cent” and “no more than 10 per cent”,[110] the wife sought a further adjustment in her favour of 30%.[111] Ms Dulhunty submitted that a ‘20%’ adjustment reflected the future parenting arrangements and the remaining ‘10%’ reflected the disparity in the parties’ earning capacity.[112]
[110] Transcript, 22 February 2012, page 49.
[111] Ibid, page 63.
[112] Ibid, pages 63-64.
Given the weight of the evidence, the Court is satisfied that, in percentage terms, a further adjustment of 25% is appropriate for ‘section 75(2) and related factors’.
Step 4: justice and equity
I now turn to the final step in the process of apportioning the assets available for distribution between the parties. Section 79(2) of the Act 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.”
In other words, s.79(2) of the Act prevents the Court from making property orders unless it is satisfied that, in all the circumstances, it is just and equitable to do so. Consequently this provision has an overarching effect on the exercise of the Court’s discretion under s.79(1) and therefore controls the way in which the Court takes into account the seven specific matters referred to in s.79(4) of the Act
In addition, the Court also has to consider s.81 of the Act which states:
“In proceedings under [Pt VIII], other than proceedings under section 78 or proceedings with respect to maintenance payable during the subsistence of a marriage the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.”
While s.81 of the Act is clearly relevant to the making of a property order, it is neither a ‘head of power’ nor an absolute requirement. This was the view of the Full Court in In the Marriage of Crapp and Crapp (No 2) (1979) 5 Fam LR 47; (1979) FLC 90-615:
“Firstly s 81 is in the nature of an exhortation by the legislature to the courts and is not a separate source of power and secondly the section itself states that the policy of making orders which finally determine the financial relationship between the parties and avoid further proceedings is only to be taken ‘as far as (is) practicable’. Nevertheless it is true to say that it is unsatisfactory in the general context of the philosophy of the Family Law Act for a really significant issue between parties who are divorced and have gone their separate ways to remain in suspended animation for a number of years.”[113]
[113] (1979) 5 Fam LR 47 at 61 (per Fogarty J; Pawley and Dovey JJ agreeing).
The practical effect of s.81 of the Act is that the Court must endeavour to make an order that finalises the financial relationship between the relevant spouses, but it does not require the Court to make an order that achieves finality. That said, for the comments previously made, and as far as it can be achieved, I see clear benefit in orders being made that will finalise the financial relationship between the parties to this case.
In this case, the Court has determined that the assessment of the parties’ respective contributions and the ‘section 75(2) and related factors’ would result in a property distribution outcome favouring the wife 77% to the wife as against 23% to the husband.
Before going any further I should raise the issue of the party’s respective superannuation entitlements and whether they should be divided in the same way as the non-separation assets. In C & C [2005] FamCA 429; (2005) 33 Fam LR 414; (2005) FLC 93-220 the Full Court[114] stated the following at paragraph 65:
“65.… the trial judge has a discretion as to how superannuation interests will be treated in a particular case. If superannuation is not included in the list of property but rather made the subject of a separate pool, it will be necessary where a splitting order is sought, or extremely prudent where no such splitting order is sought (in order to ensure that justice and equity is achieved) to:
(a) value the superannuation interest (according to the regulations if an order under Pt VIIIB is sought or according to the regulations or otherwise if no order is sought);
(b) consider and make findings about the types of contributions referred to in s 79(4)(a), (b) and (c) which have been made by the parties to the superannuation interests on either a global approach or an asset by asset approach depending on the circumstances;
(c) consider the other factors in s 79(4) being the matters in s 79(4)(d), (e), (f) and (g); and
(d) ensure that pursuant to s 79(2) the orders in relation to the parties’ property, and any order under Pt VIIIB in relation to superannuation interests are just and equitable.”
[114] Bryant CJ, Finn and Coleman JJ (Warnick J and O’Ryan J agreeing in the result, but disagreeing in part as to the reasoning).
Given the circumstances, including the length of cohabitation, I am satisfied that the party’s respective superannuation entitlements should not be separated into a ‘separate pool’ and should also be notionally divided 77% in favour of the wife and 23% in favour of the husband.
The total net asset pool (including superannuation) amounts to $968,207.00. Accordingly, the wife’s share of the division will be $745,519.39 and the husband’s share will be $222,687.61.
To achieve an outcome that is just and equitable I am satisfied that the following distribution to the wife should apply:
Property B, [B] $550,000.00
Property P, [P] $440,000.00
Wife’s household contents $2,000.00
Add-back of proceeds of sale of Hi-Ace $5,300.00
Wife’s [Q] Shares (3,152 shares) $5,043.00
Sub-Total: $1,002,343.00
Plus
Wife’s [A] Flexible Lifetime Plan Superannuation $150,341.00
Wife’s [H] Superannuation $3,414.00
Total Superannuation $153,755.00
Subtotal of Assets and Superannuation $1,156,098.00
Less
Mortgage on [B] $428,000.00
Loan from Mr H $125,718.00
Loan from Ms H $15,000.00
Sub-Total Liabilities: $568,718.00
Total: $587,380.00
Plus
Splittable payment from Husband’s Superannuation $158,139.39
TOTAL DISTRIBUTION TO WIFE $745,519.39
To achieve an outcome that is just and equitable I am satisfied that the following distribution to the husband should apply:
2005 Holden Rodeo vehicle $10,000.00
Husband’s household contents $3,500.00
Husband’s [Q] Shares (289 shares) $472.00
Add-back sale proceeds of Husband’s [Q] Shares $10,855.00
Sub-Total: $24,827.00
Plus
Husband’s Superannuation (less splittable payment) $197,860.61
TOTAL DISTRIBUTION TO HUSBAND $222,687.61
The wife will, of course, have the option of retaining the Former Matrimonial Home subject to refinancing the current debts, or selling it and reinvesting the net proceeds. She will also have the option of selling the investment property, subject to any subdivision or other improvements that may result in an enhanced selling price. Apart from retaining certain personal property including shares, the wife will also have significant superannuation entitlements to rely upon in her retirement years.
Apart from retaining his motor vehicle and certain personal property including shares, the husband will also retain significant superannuation entitlements to assist him in his retirement years.
Spousal maintenance
As previously stated, the Court has the power to make a spousal maintenance order as it considers proper under s.74 of the Act subject to considering the relevant matters set out in s.75 of the Act.
The order sought by the wife would require the husband to her the sum of $450.00 per week by way of spousal maintenance following upon the discharge of the mortgage existing over the Former Matrimonial Home.[115] The wife further seeks that such spousal maintenance continues for a period of two years (or “104 weeks”).[116]
[115] See ‘Final Orders sought by the wife”, paragraph 11.
[116] Ibid.
Given the relevant statutory criteria, and checklist provided by the Full Court in Bevan, the Court must firstly make a threshold finding under s.72 of the Act. It is only when the Court makes a threshold finding favouring a spousal maintenance outcome that the Court goes on to consider it’s power in s.74 and the mandatory considerations in s.75 of the Act. In addition to s.74, the Court has general powers under s.80 that would be relevant to the issue of spousal maintenance.
Section 72 ‘threshold finding’
Section 72(1) of the Act states:
“A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if and only if, that other party is unable to support herself or himself adequately whether—
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason
having regard to any relevant matter referred to in subsection 75(2).”
In this case the wife asserts that the husband has the financial capacity to meet a spousal maintenance order and that she is unable to support herself adequately for reasons associated with her care of the four children. While the wife does not dispute that she has the necessary skills to work, she does assert that, as the sole carer of the children, she does not have the ability to work more than casually.
In the case of In the Marriage of Astbury (1978) 34 FLR 173; (1978) FLC 90-494, a wife seeking an increase in the support she was receiving was unsuccessful because the trial judge, Maxwell J, found that she had:
“…appropriate capacity for gainful employment once she applied her mind to overcoming certain slight difficulties in this regard, and once she has obtained employment should be able to support herself adequately.”[117]
On appeal, the Full Court found that the trial judge had not erred in reaching such a conclusion.[118]
[117] In the Marriage of Astbury (1978) 34 FLR 173 at 175.
[118] Ibid, at 179 (per Evatt CJ, Asche SJ and Bell J).
That said, it would be fair to say that the Court needs to consider the obvious difficulties that a party might have in rejoining the work force after many years of raising children and I refer, in particular to In the Marriage of Mitchell (1995) 19 Fam LR 44; (1995) FLC 92-601.
In this case the wife acknowledges that she can work casually as a [omitted] and there is no evidence to suggest that she has experienced difficulties in obtaining causal work in that profession. Her problem, she asserts, is her need to be a full-time carer of the children.
While the evidence clearly establishes that the wife will remain the primary carer into the years ahead, there is little admissible evidence before the Court that would suggest that the wife could not take on permanent part-time or even full-time work, particularly on school days, and in particular, take advantage of any subsidised morning or after-school care in respect of [Z] and [Y], who are under the age of 12 years. I note that [W] will turn 15 in July this year and that [Y] recently turned 13.
That said, I am not satisfied that the evidence discloses that the wife would not be able to service modest mortgage payments (whether on the Former Matrimonial Home or a less expensive property), or rental payments, following the performance of the property orders made in this decision. In other words, I am unconvinced that firstly, the wife and the children must remain living in the Former Matrimonial Home, and/or secondly, that the wife will not be able to support herself adequately. I appreciate that, ideally, it may be best for the wife and children to remain living in the home that they enjoyed for many years, but such an outcome may not be possible unless finances permit.
I am also unconvinced that the wife has established that the husband is ‘reasonably able’ to support her. It is unlikely that the property orders to be made by this Court will generate sufficient monies for the husband to generate a sufficient deposit, without the assistance of his partner, to put towards the purchase of any real property. Consequently, the husband is likely to be in a position where his only option in the foreseeable future will be to house himself, his partner and their child-to-be in rental accommodation. Moreover, apart from the living costs associated with his cohabitation, the husband will have an on-going obligation to pay the wife significant child support in addition to his obligations to support his new partner and their child-to-be.
If I am wrong about the threshold issue, then I would be required to consider the relevant power and mandatory considerations under ss.74 and 75 of the Act.
Sections 74 and 75
Section 74(1) of the Act states:
“(1)In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.”
In this case I am not convinced that the particular spousal maintenance order sought by the wife is ‘proper’. As it is connected to both the transfer of the Former Matrimonial Home to the wife, and the discharge of the current mortgage over it, the order presupposes that the wife will continue to live in that property. Although ideal for the reasons previously stated, that may not be financially possible. Moreover, it is not clear why the order sought should continue for ‘104 weeks’.
If I am wrong, then of course the Court would need to consider the matters relevant under s.75(2) of the Act before making an order under s.74. I have previously stated and considered these relevant provisions in this decision, with the exception of s.75(2)(n) which states:
“(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party;”.
I have previously articulated my reasons for making orders that will effectively divide the net asset pool (including significant superannuation benefits) 77% in the wife’s favour and the balance to the husband. I also determined that this overall division reflected a 25% adjustment in the wife’s favour for ‘section 75(2) and related factors’. Moreover, I note that as part of the division of marital property, the wife will retain more of the realisable property to reflect her present and future needs, at the expense of a greater share of the husband’s current superannuation. That said, I note again that as part of the final property orders to be made, the wife will retain her superannuation entitlements in the sum of $153,755.00 and will obtain a splittable interest in the husband’s superannuation valued at $158,139.39 the total of which will clearly provide significant assistance for her needs in retirement.
Consequently, following an assessment of the relevant s.75(2) factors, I am not satisfied that any spousal maintenance order should be made.
I note that I have previously referred to the following statement by the Full Court in Bevan that there is:
“(3) no fettering principle that pre-separation standard of living must automatically be awarded where the respondent's means permit; and
(4) discretion exercised in accordance with the provisions of s 74, with reasonableness in the circumstances'’ as the guiding principle.”
and considered their relevance to the case before me.
Lastly, and for the sake of completeness, I note that s.81 of the Act is relevant to the spousal maintenance application before me because the parties are divorced.
For all the reasons stated above, I am satisfied that there should be no order for spousal maintenance in this case.
Conclusion
Having considered the submissions in light of the available evidence and the relevant legislation, the Court is satisfied as follows.
There will be Orders that within 28 days of the date of these orders the husband transfer to the wife all of his right, title and interest in the Former Matrimonial Home and the [P] Property. At the same time, the parties will each do all things and sign all documents necessary to discharge the husband’s liability with respect to the mortgage over the Former Matrimonial Home. The wife will also indemnify the husband for any liabilities with respect to the two properties and all loans from Mr H and Ms H.
Further, within 28 days of the date of these Orders, the wife will be required to transfer to the husband all of her right, title and interest in the 2005 Holden Rodeo motor vehicle.
The parties will each retain their respective household contents, shares and any monies standing to their individual credits in any banks, credit unions or the like.
There will be an Order that the parties each otherwise indemnify the other with respect to any other debts for which they may otherwise be liable.
The parties will forthwith do all acts and things to cause a splittable payment to be allocated to the wife from the husband’s superannuation entitlement in the base amount of $158,139.39.
In relation to procedural fairness having been afforded to the husband’s superannuation fund, I note that the wife’s case outline document states the following on page 5:
“16.The trustee of the [Q] Superannuation Plan has been advised that orders are being sought in these proceedings for a transfer of superannuation against the fund and has advised by letter dated 13 February 2012 that it is able to comply with any orders made for the splitting of superannuation from the Respondent to the Applicant.”
In light of this, there will also be a direction that the wife cause a copy of the abovementioned letter to be forwarded to the Court forthwith to be held on the Court file.
In her Minute of Orders sought, the wife sought an order that the husband pay her costs of the proceedings.
In the circumstances and in light of this decision, I see no reason at this stage to depart from the general principle in s.117 of the Act that each party should pay their own costs. In the event that a costs order is pressed then an Application in a Case and relevant supporting affidavit should be filed and the Court can consider these issues separately.
In addition, I note that I reserved the question of the husband’s costs for the necessity of the party’s legal representatives to attend a fourth day of the hearing in order to consider the wife’s interim application for spousal maintenance (that was not pressed on that day). In the circumstances and in light of this decision, I also see no reason at this stage to depart from the general principle in s.117 of the Act that each party should pay their own costs. In the event that the husband still seeks a costs order in relation to the issue, then an Application in a Case and relevant supporting affidavit should be filed and the Court can consider these issues separately.
For all these reasons the Orders of the Court will be as set out at the commencement of these reasons for judgment.
Given the factors to which I have referred, I am satisfied that the Orders are just and equitable.
I certify that the preceding two hundred and thirty-four (234) paragraphs are a true copy of the reasons for judgment of Monahan FM
Date: 4 June 2012
0
7
3