LEVINE & LEVINE

[2013] FCCA 132

FEDERAL CIRCUIT COURT OF AUSTRALIA

LEVINE & LEVINE [2013] FCCA 132

Catchwords:
FAMILY LAW – Undefended property proceedings – negative equity in former matrimonial home – asset pool of excess debt – indemnity and superannuation splitting order sought.

Legislation:
Family Law Act 1975 (Cth) s.75(2)

Applicant: MR LEVINE

Respondent: MS LEVINE

File Number: DGC 1018 of 2012

Judgment of: Judge Hartnett

Hearing date: 20 March 2013

Delivered at: Melbourne

Delivered on: 20 March 2013

REPRESENTATION

The Applicant: No appearance

The Respondent: In person

THE COURT ORDERS ON AN UNDEFENDED BASIS THAT:

1. The husband be solely liable and indemnify the wife for any shortfall to discharge the mortgage secured over the real property situate at Property [C] in the State of Victoria being the land described in Certificate of Title Volume [omitted].

2. Paragraphs 3 to 5 of these Orders are binding on the Trustee of the [L] Superannuation Fund.

3. In accordance with s.90MT(1)(b) of the Family Law Act 1975(Cth) (‘the Act’) whenever a splittable payment within the meaning of s.90ME of the Act becomes payable to or on behalf of the husband from his interest in the [L] Superannuation Fund, the wife is entitled to be paid 50 per cent of the splittable payment and there shall be a corresponding reduction in the amount the husband would be entitled to receive but for these Orders.

4. Order 3 have effect from the operative time.

5. The operative time for the purpose of Order 4 is four business days after service of the Final Orders on the Trustee.

6. Unless specified in these Orders and save for the purpose of enforcing any monies due under these or any subsequent Orders:

   (a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these Orders; and

   (b)each party forego any claims they may have to any superannuation benefit belonging to or earned by the other.

IT IS NOTED that publication of this judgment under the pseudonym Levine & Levine is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT
COURT OF AUSTRALIA
AT MELBOURNE

DGC 1018 of 2012

MR LEVINE

Applicant

And

MS LEVINE

Respondent

REASONS FOR JUDGMENT

1. These proceedings commenced by the Applicant husband filing an Application for Parenting Orders on 13 April 2012.  The Respondent wife responded to that Application in the filing of a Response by her on 24 May 2012 wherein she sought both parenting and property orders.

2. The husband swore an Affidavit on 20 February 2012 in support of his Application for Parenting Orders that did not address property matters.  He has, since that time, filed no further affidavits in the proceedings.  He did however, file a Financial Statement sworn by him on 8 March 2012 and I shall refer to the contents of that document later in these Reasons.

3. The wife subsequently filed an Amended Response on 20 September 2012 (and in respect of the property orders sought by her only) but events have overtaken some of the orders sought by her, as shall be detailed herein. The wife relies upon this document, Affidavits sworn by her on 23 May 2012 and 8 March 2013 and a Financial Statement sworn by her on 24 May 2012.

4. The parties entered into Final Parenting Orders on 5 June 2012.  Those Orders provided that they have equal shared parental responsibility for their children, [W] and [X] both born [in] 2003 and who are now aged nine years; and [Y] and [Z] both born [in] 2007 and who are now aged six years.

5. The Orders of 5 June 2012 also provided that the children live with their mother and spend time with their father, as set out in order 3 of those Orders.  The time spent with included holiday and special occasion periods but did not include a regular weekly or fortnightly cycle of time spent with between the children and their father.  The evidence of the wife is that the husband has failed to see the children or have any communication with them in the last 12 months.  He does, however, pay child support in respect of them as assessed and it is in the sum of approximately $800 per month.

History

1. The husband was born [in] 1967 and he is now aged 45 years.  The wife was born [in] 1974 and she is now aged 38 years.  The parties commenced their cohabitation in the home of the wife’s parents in 2000 before purchasing real property in [N] in the State of Victoria in 2001 (where they resided until its sale in March 2011).  They married [in] 2001.  They separated on 16 August 2010 after a cohabitation period totalling some ten years.  In August 2011 and post separation, they completed the purchase of real property in [C] in the State of Victoria for a purchase price of $340,000, contributing $50,474 from the sale of their [N] home. On 5 April 2012, the wife filed an Application for Divorce and in that same month she relocated from [C] to [I] (near [M]) in the State of Victoria. The Divorce Order took effect on 24 June 2012.

2. The husband continues in his full-time occupation as a [omitted] and he is in receipt of income of approximately $59,000 gross per annum.  He was so employed during the marriage and from 2009. The wife worked in a part-time capacity as a [omitted] during the marriage but this employment ceased on 9 December 2009 when she was involved in a motor vehicle accident whereby she was injured as a pedestrian.  She has been unable to work in any capacity since that time, having spent many months in rehabilitation at the [omitted] Hospital, and having had surgery in respect of her injuries over a period of approximately two and a half years.

3. The wife received Transport Accident Commission (‘TAC’) payments which ceased on 8 December 2012.  Her sole income now is that of the Family Tax Benefit Part A and Part B together with Centrelink benefits of a Carer’s Allowance for the parties child [X], who suffers from developmental delay and speech delay. She receives the sums of $714.14 and $115.40 per fortnight.

4. The wife is in a new relationship with her current partner, Mr O. In April 2012, she moved to reside with Mr O, taking up residence in a home owned by him at [I].  She and Mr O have had a child, [A] born [in] 2012.  They are engaged to be married.

5. Following the parties’ separation and prior to the wife’s relocation to the [M] district, she resided with the four children of the marriage at the former matrimonial home at Property [C] in the State of Victoria (‘the real property’).  This home was vacated by her in April 2012.  At the time, she placed the real property on the market for sale but the property was unable to be sold before being repossessed by the mortgagee, the Commonwealth Bank of Australia. The real property was subsequently sold by the bank on 25 January 2013 for the sum of $275,000.

6. In May 2012, there had been a liability in respect of the real property to the mortgagee in the sum of $333,092.95.  The wife says, in her Affidavit sworn 18 March 2013, that she estimates that there will now be remaining at least $65,000 owing on the mortgage to the Commonwealth Bank of Australia which was not satisfied by the sale proceeds.  This shortfall has not been met by either the husband or wife to date and no request for payment of same has been made to the wife to the present time.

Assets

1. The parties are joint and severally liable in respect to the previously stated shortfall to the Commonwealth Bank of Australia on the sale of their former matrimonial home in the sum of approximately $65,000.  The real property was owned by them as tenants in common as to 90 per cent to the wife and 10 per cent to the husband.  The wife has a Kia motor vehicle which she values in the sum of approximately $10,000, it being a 2007 model.  The husband has a motor vehicle which he valued in his Financial Statement filed in April 2012 in the sum of $4,000.  It is a 2003 Ford motor vehicle.  The husband also has a motorbike, being a 2011 Victory model purchased by him in the sum of approximately $20,000 with borrowings obtained for that purpose.  Any equity in that motorbike is currently unknown.

2. There are debts of the parties, being debts set out by the wife in her Affidavit sworn 27 May 2012 being for electricity and phone charges which total approximately $4,000.  The wife has not made any attempt to pay out these debts.  In addition, the wife remains indebted for a personal loan now assigned to [omitted] Services Proprietary Limited in respect of IVF treatment and that loan was outstanding in the sum of $13,412.40 in May 2012.  Again, although the wife entered into an instalment arrangement with the creditor to pay weekly amounts of $50, no such weekly amounts are being repaid and the total amount remains outstanding.  The wife also gave sworn evidence this day that she has accumulated fines with EastLink which total some $2,500 and in relation to which she has entered into a repayment scheme over a ten year period.

3. There is no evidence as to any debts which may be the sole responsibility of the husband in these proceedings save approximately $1,000 in credit card debt which is offset by savings of approximately $2,000 as stated in his Financial Statement. The husband has failed to participate in the proceedings. He failed to attend the conciliation conference on 30 August 2012, which was provided for in Orders of 5 June 2012 when the husband was represented. I note on that date that costs of the day were reserved, the wife having travelled from the [M] district for the conciliation conference and there being no appearance by or on behalf of the husband. The wife had engaged a lawyer to represent her on that occasion and was thus put to further unnecessary legal costs. These proceedings were then listed for trial and the proceedings are undefended with the Applicant husband failing to attend.

Contribution

1. At the time of commencement of cohabitation, neither the husband nor wife had assets of any significance. The wife had nominal superannuation entitlements and the husband, the wife deposes, would have had an entitlement to superannuation but the full details of same are not known to her.  Both parties were in employment.

2. The parties purchased their first matrimonial home with the assistance of the first home owner’s grant in the sum of $14,000, as it then was, and a gift from the wife’s mother of $5,000.  Throughout the marriage, both parties worked, the wife in a part-time capacity and from time to time, between the births of the children, and the husband in a full-time capacity and both applied all of their income to the benefit of the family.  They were both engaged in the care of their children, although the wife was the primary care giver to the children and the husband was the primary income earner.

3. During the marriage, the husband and wife pooled their earnings and contributed them to the repayment of the mortgage and household living expenses.  The wife continued working until she was 30 weeks pregnant with both births of the children and resumed her employment 12 weeks after the birth of each of the children.  She continued to be so employed until 2009 when she suffered significant injuries as a result of the motor vehicle collision, which precluded her from ongoing employment and which continues to preclude her.

4. Since the parties’ separation and in particular, the wife’s relocation to the [M] district, the husband has ceased to spend any time with the children.  They are thus in the full-time care of their mother without any assistance being provided by their father, save the payment of child support.  The wife has no current ability to earn an income and her primary care of five children and injuries are such that she is unlikely to earn any income into the foreseeable future.

5. The current living arrangements of the husband are unknown to the Court, save that when he filed his Financial Statement in April 2012, he was residing in the home of his brother.

6. At the commencement of the marriage, the husband had liabilities of approximately $11,000 from his previous marriage.  This debt was paid off during the marriage from joint funds.  Thus, the wife’s initial contribution was slightly greater than the husband’s when taking into account the gift from her mother and repayment of this sum. Otherwise, their financial and non-financial contributions were equal.

Section 75(2) Matters

1. The wife is in receipt of a carers’ pension.  The husband is in receipt of income in the sum of approximately $59,000.  The wife has the care of five young children and suffers the residual effects of her injuries sustained from the motor vehicle accident in 2009.  The husband claimed in his Affidavit filed in the proceedings at the commencement that he was in good health, although the wife deposed to him suffering from severe depression throughout the marriage and being prescribed medication for such condition.

2. The wife has the sole care of the parties’ four young children, who spend no time with their father.  The wife’s prospects of gaining financial security, given her care of the children and lack of income, are remote and stand in stark contrast to the position of the husband.  However, I note that the Court has not been provided with the income position of the wife’s current partner.

Consideration

1. The wife seeks that the husband indemnify her with respect to the shortfall in the sale price as against the mortgage sum owing in respect of the former matrimonial home at Property [C] in the State of Victoria.  This deficit is in the sum of approximately $65,000.  The wife has no capacity to meet this payment, whilst the husband, by virtue of his income, has some.  The wife’s position is that she is currently unable to meet the additional $20,000 approximately of accumulated debt currently owing by her out of the meagre weekly income received by her personally albeit nearly all of it (save $2,500) is debt incurred by the parties during the marriage which the wife is content to remain solely responsible for.

2. The wife seeks that she retain the vehicle in her possession, which enables her to transport the parties’ four children and that is just and equitable.  The husband retains the lesser vehicle for his own use and in addition, the motorbike with an equity unknown to the Court.  The wife seeks retention of her own superannuation, which is in the sum of $22,000 approximately.  This is a small sum.  The wife is not in a position where she will be able to accumulate further amounts by way of superannuation entitlements.  The husband is.

3. The husband’s superannuation has accumulated during the parties’ cohabitation period of approximately 10 years. He may have had some small amount prior to that cohabitation, but has failed to put that evidence before the Court. His superannuation entitlements are approximately $64,666.75 (as at 30 May 2012) and are held with [omitted] Super in the ‘[L] Superannuation Fund’. The wife seeks a splitting order such that she receive 50 per cent of the husband’s superannuation entitlement and in the circumstances of this case, that is a just and equitable order that should be made.  The husband will be able to accumulate further superannuation entitlements over the many years of working life left to him and the apportionment of the parties’ total superannuation pool is a just and equitable one.

4. These proceedings have been undefended.  The wife has appeared as a litigant in person, having spent many thousands of dollars in legal costs prior to this date.  She can no longer afford to be represented as she can no longer afford to pay her debts.  I am mindful that legal costs were occasioned to her unnecessarily by the husband’s failure to attend a conciliation conference, and that is a matter I also take into account in the orders which I make this day.

5. The s.75(2) of the Family Law Act 1975 (Cth) matters weigh heavily in the wife’s favour. So too does her inability to pay her debts, both past and present, out of income received by her. The husband has such capacity.

6. The Court will grant the orders sought by the wife, they being just and equitable and otherwise dismiss all extant applications. 

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Judge Hartnett.

Associate: 

Date:  24 April 2013