Lindholm & Lindholm
[2022] FedCFamC2F 1353
Federal Circuit and Family Court of Australia
(DIVISION 2)
Lindholm & Lindholm [2022] FedCFamC2F 1353
File number(s): BRC 6043 of 2019 Judgment of: JUDGE YOUNG Date of judgment: 21 September 2022 Catchwords: FAMILY LAW - property - application for alteration of property interests - where the parties have one child together -where the husband suffered a serious injury at work - where the husband was awarded personal injury compensation - where a large portion of the compensation funds have been dissipated through gambling by the husband - court satisfied the wife will primarily financially responsible for the child Legislation: Family Law Act 1975 (Cth) ss 75, 79 Cases cited: Aleksovski & Aleksovski [1996] FamCA 111
Griffiths & Kerkemeyer [1977] 139 CLR
Weir & Weir [1992] FamCA 69
Division: Division 2 Family Law Number of paragraphs: 30 Date of hearing: 19, 20 and 21 September 2022 Place: Darwin Counsel for the Applicant: Mr George Solicitor for the Applicant: Browns Lawyers Counsel for the Respondent: Mr Clutterbuck Solicitor for the Respondent: Turnbull Mylne ORDERS
BRC 6043 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS LINDHOLM
Applicant
AND: MS LINDHOLM
Respondent
order made by:
JUDGE YOUNG
DATE OF ORDER:
21 SEPTEMBER 2022
THE COURT ORDERS THAT:
1.The Respondent is to pay the Applicant the sum of $350,000 with such monies to be paid from the monies presently held in the trust account of Turnbull Mylne Lawyers, the husband’s solicitors, and this order is sufficient discharge of their liability to the husband for that sum. The balance of the monies may be paid to the husband.
2.The parties are to otherwise retain for their benefit any other property in their possession or name.
3.The wife is to retain all of her right title and interest in any superannuation fund in her name.
4.All extant applications are otherwise dismissed and the matter removed from the active pending cases list.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Lindholm & Lindholm has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Ex TemporeJUDGE YOUNG
Background
This is an application for alteration of property interests pursuant to section 79 of the Family Law Act 1975 (Cth) (“the Act”). The applicant wife is 40 years old. The respondent husband is 44 years old. They have a six year old daughter, X, who is currently living in a shared-care arrangement, where X spends eight nights a fortnight with the mother and six nights with the father. When X turns eight years old the parties have agreed that she will live with each parent in an equal time arrangement. The parties began living together in October 2012. They married in 2014 and their daughter was born in 2016. They separated in June 2018, after a relationship of little less than six years.
The wife is employed part time as a hospitality worker and is studying for a Certificate IV in education, which will enable her to be employed as what is colloquially known as ‘an educator’. She is about halfway through her course. She currently earns $635 a week from her employment and receives a part-parenting pension of $179 a week and a family payment of $121 a week. Her income totals $935 a week, taking her annual income to about $48,620 a year.
The husband was injured in a very serious work accident in mid 2016, while working as a tradesman. He has not worked since. He received WorkCover payments after the accident but these ceased after the husband settled his personal injury action in December 2020. It appears the settlement was paid to the husband in January 2021 and from that time WorkCover payments ceased. His current income is $175 a week, made up of $150 a week of family benefit and $25 approximately paid to him in child support by the wife as a result of a child support assessment.
The gross settlement figure for the husband’s personal injury settlement was about $2.3 million. There is no evidence before the court about how the settlement figure was calculated but after deductions of about $820,000, presumably for past workers compensation payments or past WorkCover payments, past medical expenses and legal costs, the husband received a net figure of $1,478,477.
On 18 March 2020 Judge Tonkin of this Court made orders in anticipation of the husband receiving this settlement figure. She ordered that 50 per cent of the money be held in trust by the husband’s lawyers. The balance was to be released to the husband. Accordingly, $739,238 was retained in trust and $739,238 was released to the husband.
Judge Tonkin also made an injunctive order against the husband, preventing him from using the monies received for gambling and stipulated that any money so used for gambling was to be treated as part of the husband’s entitlement in these proceedings. While I consider that was an appropriate order in all the circumstances and I have substantially treated the moneys in accordance with the stipulation of Judge Tonkin, I observe that, had I formed a different view, I would not consider myself bound by such an order. However, I have arrived at much the same position because, of course, it is a conventional position.
It is clear that the husband ignored the injunction and gambled away some or probably the bulk of the damages settlement that came into his hands. All he has to show for the $739,000 that was released to him is a car he purchased for around $80,000, two motorcycles he purchased for $15,000 to $20,000 each, the amount of $153,000, apparently lent to relatives, and $20,000 he currently holds in cash, roughly totalling $300,000.
I estimate that the husband’s reasonable expenditure, since receiving the damages award and the cessation of his WorkCover payments in January 2021, is about $75,000. Taking into account the fact that he lives with his mother and does not pay rent, the expenditure which remains largely unexplained is in the region of $364,000.
Another amount that must be considered is the monies received by the husband, following his injury, from a combination of amounts made up by the accumulated sum in his superannuation accounts and the insurance component of those accounts paid to him on disablement. The husband has not given any evidence about this but it appears to be unchallenged that about $417,076 was received by the husband after his injury in May 2016 at various times and for the most part, before separation in June 2018.
It appears to be agreed that $125,000 of these moneys was paid into the joint account of the parties and used to pay credit card debt and other expenditure on holidays and so on. The balance of roughly $292,076 is unaccounted for. I am satisfied that a significant amount and probably the bulk of this sum was gambled away by the husband.
Credibility
I am satisfied the wife was a reliable witness. I accept her evidence, particularly in relation to the husband’s gambling, lifestyle and her contributions to his care following his injury. I found the husband to be an unreliable witness. I do not accept his evidence where it conflicts with that of the wife, or unless his evidence constituted an admission against interest. An example of the latter was the husband’s admission that he continues to gamble on TattsLotto, horse races and dog races. He also asserted that he visited B Casino on the Region C but only to drink and not gamble. I do not accept that claim.
The husband said that he uses an online betting account with TAB but asserted he did not have access to any statements of his betting activity. I do not accept that. I am satisfied the husband has not been frank about his gambling losses. I am satisfied that the husband, in contravention of orders of this court, continued to gamble. I am satisfied that the bulk of the money received by him from his settlement has been gambled away and I am satisfied that any further monies he receives will probably be gambled away in a relatively short time. I am satisfied that as a consequence of this he is unlikely to be able to provide any significant financial support for his daughter in the long term.
The Property Pool
The parties did not agree on all chattel values but I have treated their estimates of their own chattels as admissions against interest. The amounts I have referred to as “dissipated” are obviously rough estimates at best and are not to be treated as arithmetically accurate. However, in the absence of any evidence by the husband about these matters, in circumstance where I am satisfied that he would be in a position to give evidence if he wished, I have applied a broad brush in the sense used in Weir & Weir [1992] FamCA 69.
The pool of assets is as follows:
Description Wife Husband Total Assets 1 Motor Vehicle 1 $2,000 2 Furniture $2,000 3 Money held in trust (residue of $100,000) $25,542
4 Motor Vehicle 2 $80,000 5 Motorbike 1 $20,000 6 Motorbike 2 $8,000 7 Furniture $2,000 8 Cash $20,000 9 Money owed to husband by friends and relatives $153,000
10 Residue of WorkCover settlement (held in trust for husband pursuant to order of court) $631,378
Total assets $29,542 $914,378 $943,920 Add backs 11 Balance of $100,000 paid to wife pursuant to order of court (spent on legal fees) $74,458
12 Husband’s legal fees unknown Amounts dissipated by the husband 13 Amounts unaccounted for from various payments from husband’s superannuation insurance policies during relationship ($417,076 – $125,000) c.$292,076
14 WorkCover settlement monies released to husband less identifiable assets and reasonable living expenses ($747,099 – c. $375,000) c. $364,238
Total c.$656,314 Liabilities Nil Nil Net assets incl. add backs and dissipated sums $104,000 $1,570,692 $1,674,692 Superannuation 1 Wife $93,316 2 Husband nil Total assets, add backs, dissipated amounts and superannuation $197,316
$1,570,692
$1,768,008
Contributions
The wife is employed as a hospitality worker and was employed as a hospitality worker at all material times. Before his injury, the husband worked as a fly-in fly-out (“FIFO”) worker. He earned more than the wife prior to his injury however, the parties appear to agree that contributions were equal up to that point.
After the husband’s injury, he was in hospital for an extended period, about seven or eight weeks, on my calculation. The wife said that she visited him daily and provided what support she could, notwithstanding that she was in the late stages of her pregnancy. The parties’ daughter was born shortly after the husband returned home from the hospital and/or rehabilitation. The wife said she continued to care for the husband, drove him to medical and other appointments and provided general care over the next two years, while she was also responsible for X. I accept that during this period of approximately two years, the wife’s contribution to the welfare of the family was very significant.
The husband continued to be in receipt of WorkCover payments. I would expect the wife’s gratuitous care during this period to be reflected in a Griffiths & Kerkemeyer [1977] 139 CLR 161 component in the husband’s damages award. Although the husband did not adduce any evidence of the breakdown of the settlement, in a moral sense, in my view, a significant part of the Griffiths & Kerkemeyer would belong to the wife.
In addition to the wife’s gratuitous care of the husband following his injury and in the initial period of rehabilitation, the wife continued to be responsible for the care of the child. I am satisfied, having regard to the fact that the husband was recovering from a serious injury at that time, the wife was primarily responsible for the care of the child.
I am also satisfied that the wife made a contribution to the accumulated superannuation accounts which were paid to the husband and largely dissipated, except for the sum I have mentioned of $125,000.
The components of the net settlement figure paid to the husband would include, I would expect, and this was not disputed by counsel for the parties, pain and suffering, loss of earning capacity, future medical expenses and Griffiths & Kerkemeyer damages. I am satisfied this largely reflects the wife’s voluntary assistance after the husband’s injury. Consistently with the decision in Aleksovski & Aleksovski [1996] FamCA 111, I am satisfied that the components relating to pain and suffering, loss of earning capacity and future medical expenses should be seen as the husband’s sole contribution.
I am satisfied that the financial and non-financial contributions of the parties should be seen as 22.5 per cent to the wife and 77.5 per cent to the husband, having regard in particular to the length of the marriage, the responsibility for the care of the parties’ child and the late contribution of the husband’s personal injury settlement.
Section 75(2) factors
I have regard to each of the factors in section 75(2) of the Act but the matters that appear of particular importance in this case are as follows. The wife is in good health and is retraining to be able to provide educational support in schools. She estimates that she would be able to earn about $50,000 a year once she commences employment. Without necessarily accepting that figure, I am satisfied that the wife is able to earn a steady, if modest, income.
While she cares for the parties’ daughter for most of the time at the moment, that is, on the eight day and six day roster that will move to equal time when the child turns eight years old. Even now, the wife has been assessed by the Child Support Agency to pay the husband $25 a week in child support. That is likely to increase due to the fact that there is no real indication that the husband will return to employment.
I am satisfied that, notwithstanding employment in the short term and the equal time arrangement, the wife will be responsible for most or all of any additional financial support to the child, such as school fees, uniform expenses, excursions and the like. I am far from satisfied, given the husband’s proven record of reckless gambling that he will ever be in a position to provide any real financial support for this child.
The husband did not adduce any evidence about his health or the extent of his disability. I heard that he had a partial amputation of one foot. I accept that he will not work as a labourer or a tradesman again. However, there was no evidence to suggest complete incapacity for gainful employment beyond an assertion from him, which, in the absence of expert evidence, I do not accept.
The husband gave evidence that after his injury he attempted to set up a business in the niche market of leisure wear. He said he had contracted with a manufacturer in Country D, but ultimately the quality of the clothing was unsatisfactory and he did not pursue the venture. This suggests the husband has some mental capacity for gainful employment.
Another matter that is particularly salient is the fact that the husband lives with his mother. This is apparently a stable arrangement and the husband did not suggest any desire to leave. He said his mother’s house is large and the parties’ daughter will be adequately accommodated in her own bedroom.
It was not challenged that the husband is subject to a Centrelink preclusion period until 2038, that is, a further 16 years in which he will not be eligible for unemployment or other benefits. Given the husband is taken to be in possession of assets wasted, I do not consider that any adjustment for section 75(2) factors in his favour is merited or would be just and equitable.
However, I consider the wife’s likely financial burden of caring for the parties’ daughter in the future as it will fall most heavily on her, notwithstanding the fifty-fifty care arrangements contemplated from when the child turns eight. I consider that an adjustment in dollar terms of $150,000 in the wife’s favour is merited, which is equivalent to approximately 8.5 per cent of the notional pool or a differential of 17 per cent for section 75(2) factors. The overall division expressed as a percentage will therefore be 31 per cent to the wife and 69 per cent to the husband of the notional pool. The adjusted balance sheet is as follows:
Description Wife Husband Total Assets 1 Motor vehicle 1 $2,000 2 Furniture $2,000 3 Money held in trust (residue of $100,000) $25,542
4 Motor vehicle 2 $80,000 5 Motorbike 1 $20,000 6 Motorbike 2 $8,000 7 Furniture $2,000 8 Cash $20,000 9 Money owed to husband by friends and relatives $153,000
10 Residue of WorkCover settlement (held in trust for husband pursuant to order of court) $631,378
Total assets $29,542 $914,378 $943,920 Add backs 11 Balance of $100,000 paid to wife pursuant to order of court (spent on legal fees) $74,458
12 Husband’s legal fees unknown Amounts dissipated by the husband 13 Amounts unaccounted for from various payments from husband’s superannuation insurance policies during relationship ($417,076 – $125,000) c.$292,076
14 WorkCover settlement monies released to husband less identifiable assets and reasonable living expenses ($747,099 – c. $375,000) c. $364,238
Total c.$656,314 Liabilities Nil Nil Net assets incl. add backs and dissipated sums $104,000 $1,570,692 $1,674,692 Superannuation 1 Wife $93,316 2 Husband nil Total assets, add backs, dissipated amounts and superannuation $197,316
$1,570,692
$1,768,008
Husband pays Wife $350,000 ($350,000) Overall division $547,316 (31%) $1,220,692 (69%) $1,768,008
In order to achieve that division, there will be an order that the husband pay the wife $350,000 and that money is to be paid from the monies held in trust on behalf of the husband by his lawyers.
I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Young. Associate:
Dated: 6 October 2022
0
0
0