Llewellyn and Llewellyn

[2016] FCCA 3111

FEDERAL CIRCUIT COURT OF AUSTRALIA

LLEWELLYN & LLEWELLYN [2016] FCCA 3111

Catchwords:
FAMILY LAW – Property – application for property settlement – small asset pool – short marriage – no children of the marriage – just and equitable.

Legislation:

Family Law Act 1975, ss.75, 79

Cases cited:

Appleton & Draper [2015] FCCA 3186

McMahon and McMahon (1995) FLC 92-606
Stanford v Stanford (2012) 87 ALJR 74

Applicant: MS LLEWELLYN

Respondent: MR LLEWELLYN

File Number: MLC 4964 of 2015

Judgment of: Judge McNab

Hearing date: 24 October 2016

Date of Last Submission: 24 October 2016

Delivered at: Melbourne

Delivered on: 14 December 2016

REPRESENTATION

Counsel for the Applicant: Ms Campbell

Solicitor for the Applicant: Applicant in Person

Respondent in Person

ORDERS

1. The respondent husband is to pay the applicant wife the sum of $22,000 by way of settlement of property within one (1) month of the date of these Orders.

2. The respondent be declared the owner of the Nissan (omitted) motor vehicle registration (omitted) (“the Nissan car”) and the respondent assume responsibility for Loan Agreement (omitted) with Nissan Financial (“the Loan Agreement”).

3. The applicant sign all documents and do all things necessary:

   (a)to transfer ownership of the Nissan car to the respondent;

   (b)assign responsibility of the Loan Agreement from the applicant to the husband.

4. Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:

   (a)each party will be solely entitled to the exclusion of the other to all other property including real property and chattels of whatsoever nature and kind in the name or possession of such party as at the date of these orders.

   (b)monies standing to the credit of the parties in any joint bank account are to become the property of the respondent;

   (c)each party forego any claims they may have to any superannuation benefits belonging to or earned by the other;

   (d)insurance policies remain the sole property of the owner named therein;

   (e)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;

   (f)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.

5. Each party bear their own costs.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 4964 of 2015

MS LLEWELLYN

Applicant

And

MR LLEWELLYN

Respondent

REASONS FOR JUDGMENT

Background

1. These proceedings concern an application for final orders in relation to the property of the marriage pursuant to s.79 of the Family Law Act 1975 (“the Act”). The husband is 45 years old (born (omitted) 1971) and is employed as a (omitted) in the (omitted) industry. The wife is 41 years old (born (omitted) 1975) and works in the (omitted) industry. 

2. The parties commenced cohabitation upon their marriage on (omitted) 2005. There are no children of the relationship.

3. The parties separated on (omitted) 2013 and the date of divorce was 21 December 2014.

4. The initiating application was filed by the wife on 2 June 2015 and it has been the subject of a duty list hearing on 7 September 2015, a Conciliation Conference on 1 February 2016, a hearing mention on

   
   

   2 February 2016, a defended hearing on 7 September 2016 which was adjourned to final hearing on 24 October 2016.

Documents relied upon

1. The wife relied upon the following documents:

   a)case outline filed on 16 August 2016;

   b)affidavit of Ms Llewellyn filed on 3 August 2016;

   c)affidavit of Mr J filed on  3 August 2016;

   d)affidavit of Ms Llewellyn filed on 2 June 2015;

   e)affidavit of Ms Llewellyn filed on 15 December 2015;

   f)wife’s Financial Statement filed on 3 August 2016.

2. The husband relied upon the following documents:

   a)case information filed on 22 August 2016;

   b)affidavit of Mr Llewellyn filed on 14 October 2016;

   c)financial statement filed on 20 October 2015;

   d)response filed 20 October 2015;

   e)affidavit of Mr Llewellyn filed on 20 October 2015.

Chronology of Events

1. In 2003, the husband purchased a property in Property M, Victoria (“the Property M property”).

2. The husband lived in (country omitted) between 2004 and 2008 and the parties commenced their relationship in 2005. They married on (omitted) 2015 and the husband returned to (country omitted) to work while the wife remained in (country omitted). They continued to live separately, with the wife living in (country omitted) and the husband living in (country omitted), travelling to and fro to spend limited time with each other every two to three months.

3. In 2008, the respondent relocated permanently from (country omitted) to Australia to live with his sister at her home in (omitted), Victoria. In 2009 the husband sold the Property M property to purchase Property D, Victoria (“The Property D property”).

4. In December 2009 or January 2010, the wife relocated permanently to Australia from (country omitted) to live with the husband at his sister’s home.

5. The parties then moved in together into the Property D property in January 2010. They lived there together until separation in August 2013. The wife states in her outline of case that they continued to live there together until she moved out at the husband’s request in November 2013.

6. The wife lodged a caveat over the Property D property on 17 September 2014. The divorce was finalised on 21 December 2014.

7. The wife filed proceedings in this court on 2 June 2015. Subsequently, the parties attended a Conciliation Conference on 1 February 2016 but were unable to reach an agreement. A final hearing for this matter was heard before this court on 24 October 2017.

Approach to property proceedings

1. There is a general approach to hearing of property applications that has been established over time by the decisions in this area by the Full Court of the Family Court of Australia. This was refined following the High Court decision of Stanford v Stanford (2012) 87 ALJR 74.

2. I adopt the approach taken by Judge Scarlett in Appleton & Draper [2015] FCCA 3186 which helpfully summarises the leading authorities (omitting footnotes):

   22. The way a Court approaches a property application under section 79 of the Family Law Act 1975 is, first of all, to follow the principles set out by the High Court of Australia in Stanford v Stanford.

   23. First, the Court must consider the requirements of subsection 79(2) of the Act, which prescribes:

   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.

   24.    The High Court held in Stanford at [37] that the court must first identify the exiting legal and equitable interests of the parties in the property.

   25.    Second, although s.79 confers a broad power on a court to make a property settlement order, “it is not a power that it to be exercised according to an unguided judicial discretion” (at [38]).

   26.    The third principle, and perhaps the most important, is:

   …whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property, which is fixed by reference to the various matters (including financial contributions) set out in s.79(4).

   27. Thus, the decision in Stanford means that the Court must consider the requirements of s.79(2) before embarking on the four step process set out by the Full Court of the Family Court of Australia in Hickey & Hickey.

   28.    In Hickey, the Full Court set out a process of four inter-related steps that must be taken by a court when determining a property application:

   Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss. 79(4)(d), (e), (f) and (g) (“the other factors”) including …the matters referred to in s.75(2) so far as they are relevant…Fourthly, the Court should …resolve what order is just and equitable in all the circumstances of the case.

   29.    It is neither contradictory nor redundant to consider again whether a proposed order is just and equitable under s.79(2), because the Court is considering the matter having undertaken the three previous steps referred to in the Hickey decision.

Evidence and Submissions

1. The wife acknowledged that the husband had made the greater financial contribution to the marriage. She further gave evidence that she contributed to mortgage repayments of the Property D property,[1] and while the husband contributed a greater amount to the mortgage repayments, she has an equitable interest in the Property D property. She also gave evidence that she paid for the husband’s food as well as half of the utility bills. The husband denied that the wife had made mortgage payments.

   [1] Affidavit of Ms Llewellyn sworn 3 August 2016 at [34]

2. He did give evidence that from early 2011 the wife had made some cash payments of $600 per month for expenses such as groceries, utilities and bills, but they were not paid every month. He said that they were certainly not paid when the wife was not employed or had limited income.

3. The wife also submits that the non-financial contributions of the parties were equal in the marriage. She states that both parties contributed to the furnishing and decorating of the marital home and that she landscaped, established and tended the garden and common area adjacent to the property. The parties agree that they shared the housework, shopping and gardening.

4. The husband submits in his Case Information that he has been engaged in full time employment during their relationship and that the wife had not worked before separation. He states that he paid for all living expenses for both of them until around early 2011. He states that the wife had made some cash payments to him of about $600 a month for expenses but claims that these payments were not made every month and not during the time of the wife’s unemployment.

5. In addition, he states that they were financially independent with separate bank accounts and paying for their own expenditures when travelling together locally or overseas. The husband also claims that he purchased all of the white goods, blinds and air conditioning units for the Property D property.

The Pool

Item	Possession	Valuation by husband	Valuation by wife
Assets
Property D property (agreed value)	Husband	$540,000	$540,000
Nissan (omitted)	Wife	Agreed at $28,000	$25,000
(omitted) Motorcycle	Wife	$2,000	$985
Watch Collection	Husband	$16,000	$37,380
Engagement Ring	Wife	$20,800	$10,000
Furniture and white goods	Wife	$1,000
Shares	Husband	$55,000
Total Assets	$607,800	$723,365
Liabilities
(omitted) Bank visa card	Wife	$3,760
Car loan	Wife	$6,800
Mortgage	Husband	$342,500
Credit Card Loan	Husband	$30,040
Total Liabilities	$383,100
Superannuation
Combined Australian and (country omitted) Superannuation	Husband	$209,966
Combined Australian and (country omitted) Superannuation	Wife	$117,966
TOTAL SUPERANNUATION	$327,932

1. In final submissions, Ms Campbell of Counsel for the applicant wife contended that the total pool of non-superannuation assets were $300,011.35.

Issues in dispute

1. The applicant wife submits that her standard of living has been greatly reduced post-separation. She currently resides in a rented dormitory-style accommodation at a cost of $140 per week. She shares the kitchen facilities with other occupants and the accommodation does not have a lounge room. She submits that her current standard of living is unreasonable in light of the comparatively comfortable standard of living that she alleges the husband to be living in, post-separation.

2. She also claims to have left her secure employment as a (occupation omitted) in (country omitted) to live with and support her husband in Australia, which had a negative impact on her earning capacity and her ability to find employment within her field of expertise. She has been unable to find similar employment since her relocation to Australia, and is currently working as a (occupation omitted). She claims to have worked mostly full time from 12 May 2010 until separation with an income range between $22,000 and $35,000per year.  

3. The wife claims she paid the husband $600 per month towards the mortgage and contributed to the value of the property by establishing and tending to the garden. They shared equally the costs of the utility bills and health care insurance. She also contributed approximately $6,000 towards new furnishings purchased for the Property D property.[2]  As noted at [17] and [18] herein, the husband denied that the wife made contributions to the mortgage.

   [2] Affidavit of Ms Llewellyn sworn 3 Aug 2016 at [34]

4. On 13 August 2013, the husband informed the wife that he wanted to separate. On 10 October 2013 and 1 November 2013, the husband informed the wife that he wanted her to vacate the house. She moved out of the marital home in mid-November 2013, taking her personal belongings. The husband kept all of the furniture and white goods, but left some with the wife when he relocated to Sydney.[3]

   [3] Affidavit of Ms Llewellyn sworn 3 Aug 2016 at [46]

Nissan Motor Vehicle

1. The husband purchased the Nissan motor vehicle in May 2013, by trading in his Mazda (omitted) and drawing down $10,530 from his home loan. The balance was obtained through a car loan from Nissan Finance in the husband’s name. The vehicle is registered in the wife’s name and the car was left with her when the husband relocated to Sydney. Since then, the wife has been making repayments on the car loan with a balance of $6,800.

Watch Collection

1. The wife claims that the husband has had the following watches in his possession:

   i)a Rolex (omitted) watch valued at approximately $8,000, which he lost in 2009;

   ii)a watch that he purchased  for $4,500 while working for (employer omitted) in 2009;

   iii)a (omitted) 18 carat rose gold watch, purchased in October 2012 through his then employer for approximately $7,100. The watch is a collector’s item that now retails online for $15,000;

   iv)an (omitted) watch purchased for $12,209 post-separation on 27 February 2014. The watch is a collector’s item that retails online for $18,880. A joint valuation of the (omitted) and (omitted) watches that the wife printed from the internet values the two watches at $33,880.

2. The husband values his watch collection as consisting of an (omitted) watch valued at $16,000. He gave sworn evidence that he has no other watches and that the watch he owns was purchased with proceeds of an insurance claim in relation to a lost watch in the sum of about $20,000. I accept the husband’s evidence that he has only one watch. The wife did not establish otherwise.

Shares, Unit Trusts, Bonds or Debentures

1. The wife states at [73] of her affidavit sworn 3 August 2016 that in her husband’s application to (omitted) Bank for a mortgage for the purchase of the Property D property, he had declared assets of $55,000 in “shares, unit trusts, bonds or debentures” in his Financial Statement. There is no mention of such shares in the husband’s Financial Statement. The husband swears that he has no shares and did not own shares. He did give evidence that $55,000 “had gone to the house” by which I understand that the shares were used to purchase the Property D home. I accept that evidence and that the shares should not be treated as a separate asset as they were used to purchase the Property D home, which is included as an asset.

Credit Card Debts

1. The wife states that any credit card debt that the respondent claims to have were incurred post separation and annexed to her affidavit copies of statements to his credit cards at the time of separation. In the husband’s Financial Statement he claims a debt of $24,700 on his Bank (omitted) card and a debt of $5,340 on his (omitted) Bank Visa card.

2. The wife has a debt owing of $3,760 on her (omitted) Bank Visa card.

Superannuation

1. The parties’ superannuation assets amount to an estimated total of $327,932 of which $117,966[4] is in the name of the wife and $209,966[5] is in the name of the husband. Both parties seek orders that retain their interests in the respective superannuation funds and any items of personalty standing in their own names or in their possession.

   [4] Financial Statement of Ms Llewellyn filed on 3 August 2016

   [5] Affidavit of Mr Llewellyn sworn 6 October 2016

The Parties Proposals

1. The wife seeks a lump sum payment of $120,000 and the transfer of ownership of the Nissan motor vehicle to her from the husband.

2. The husband proposes orders that he pays the wife the sum of $20,000.

3. With regard to the Nissan motor vehicle, he proposes that he be declared the owner and the wife discharge the loan agreement with Nissan at her own cost. He also seeks an order that the wife pays the husband’s costs of and associated with this application.

Contributions

1. I accept that for significant periods of time during the relationship and marriage, time was spent independently of each other and to a large extent they operated with financial independence.

2. The wife deposes that the period between 2005 and 2009 was spent where she was either travelling extensively in her work as a (occupation omitted) with (employer omitted), or living in (country omitted) whilst the husband lived in (country omitted) with his parents.

3. After the parties married in (omitted) 2015 in (country omitted), the wife was working as a (occupation omitted) in (country omitted) and the husband was living and assisting his parents in their business in (country omitted). At [18] of the affidavit of the wife sworn 3 August 2016, the wife states:

   For the first three years after we married, the Respondent and I lived together whenever we were both in (country omitted), or in (country omitted). We were together as often as possible. The amount of time we spent together largely depended on my work schedule. On average, we were together for three or four days on two occasions each month. We also spent time together travelling in other countries.

4. The wife states that they lived together from January to March of 2006 in (country omitted).[6] In 2007, the parties applied for and obtained permanent residency in Australia. The wife deposes that a joint bank account was opened with Bank (omitted) bank shortly after May 2007. There is no detailed reference to the operation of that account by the parties save that the husband says that $5,000 was deposited into it and thereafter was not used by the parties. There is no reference to it in the table of assets compiled by the wife. That table refers to accounts of both the husband and wife but no joint account.

   [6] Affidavit of Ms Llewellyn sworn 3 Aug 2016 at [20]

5. The husband gave evidence that the parties operated separate finances and separate bank accounts. The wife says that the husband would never discuss or make plans for the future in the time that they were living together in Property D.

1. There is no evidence of the parties holidaying together once they commenced living together at the Property D house. The husband gave evidence that during the eight years of marriage the parties had not been living together more than half the time, that they were financially independent and that the wife travelled to many countries alone.

2. I find that the couple did in fact spend significant periods of time apart and operated their finances on a largely independent basis. The purchase of the major asset, which is subject of this proceeding, being the Property D property was a decision of the husband and paid for entirely by him. It is against this background that a consideration in relation to the contributions made by the parties is made.

3. The evidence supports a finding that the parties lived together for only a short time in the Property D house and as such was a short marriage for the purposes of determining this application.

Financial Contributions s.79(4)(a)

1. The un-contradicted evidence of the husband is that he has made significant contributions during the marriage to the acquisition and conservation of the property of the parties through his income. He paid for the Property D property with funds obtained from the sale of the Property M property he owned prior to marriage, in addition to his own savings. He also paid for the entire deposit, stamp duties, legal costs and fittings. The wife states that she contributed $6,000 to new furnishings for the property.

2. The wife has been employed through the marriage. She has worked full-time and made contributions based on an income at a lesser rate than the husband’s. The wife deposed to her income being between $22,000 and $35,000 a year, earned at the various (employers omitted) at which she worked during the period between 12 May 2010 and separation.

3. The husband deposes to a current annual income of $85,611[7] and rental income (before tax) from the Property D property of $421.15

   
   

   per week.[8]

   [7] Affidavit of Mr Llewellyn sworn 6 October 2016, Annexure “L7”

   [8]Financial Statement of Mr Llewellyn filed 20 October 2015.

4. The evidence of the detail of financial contributions made by the wife are not specific and there are difficulties in calculating with precision the value of the contended pool of assets. On my calculations, doing the best that I can, I assess the pool of assets at $300,000. This is based on the table of assets and liabilities filed by the parties and having regard to the disputes regarding the value of particular items in the pool. I have also had regard to the submission of Counsel for the wife that the net superannuation asset pool was $300,011.35.

Non- Financial Contributions s79(4)(b)

1. The wife submitted that the non-financial contributions of the parties were equal and that both parties contributed towards the furnishing and decorating of the Property D property. The wife contributed to the property by landscaping and tending to the garden, including the common area adjacent to the property, which she submits increased the value of the property. The wife gave oral evidence that she had no expectations of being on the title of the property.

2. The husband submits that for much of the time of the marriage the parties spent time apart. He did not dispute that the wife had made contributions to the maintenance and upkeep of the home and garden of the Property D property. 

s79(4)(c) Contribution as homemaker and parent

1. There are no children of the marriage. The wife submits that the contributions of the parties as homemaker were equal during the time they lived together. The parties shared the housework, shopping and gardening and the wife did all of the cooking. In relation to this, the husband contends that they spent significant time apart.

s79(4)(d)The effect of any proposed property order upon the earning capacity of either party

1. In my view, the proposed property orders will not have any effect upon the earning capacity of either party.

Section 75(2) factors

Section 75(2)(a) the age and state of health of each of the parties

1. The husband was born on (omitted) 1971, is 45 years old and of good health. The wife was born (omitted) 1975, is 41 years old and of good health. There are no children of the marriage and both have the capacity to work in gainful employment.

Section 75(2)(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment

1. The husband has a greater earning capacity than the wife. The husband’s taxable income according to the wife, in the financial year ending 30 June 2015 was $111,609. The wife’s taxable income in that same period was $44,487. The wife submits that she is unlikely to increase her earnings significantly in the future. The wife submits that as the husband is employed at (position omitted) level with a base salary and performance based bonuses, he has significant opportunities to increase his earning capacity. There is no lack of capacity on the part of the wife to earn income.

Section 75(2)(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;

1. The wife submits that her standard of living has been greatly reduced by the separation as she is renting shared dormitory-style accommodation. She pays rent of $140 per week and shares the kitchen facilities with the other occupants, with no lounge room.[9] The wife submits that the husband lives in rental accommodation in Sydney at the cost of $565 a week and has the option of living in the former matrimonial home. The wife submits that her current standard of living is unreasonable in light of the standard of living she enjoyed during the marriage and in comparison to the current living arrangements of the husband. In light of the short duration of the marriage, the fact that both parties maintained largely independent finances and that there is no evidence that the wife was in anyway inhibited from improving her own financial position as a result of the marriage, I do not consider this a significant factor.

Section 75(2)(j) the 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;

[9] Affidavit of Ms Llewellyn sworn 3 August 2016 at [35]

1. The wife contends that she contributed to the husband’s earning capacity during their marriage. The wife left her secure employment as a (occupation omitted) in (country omitted) to live with and support her husband in Australia. She submits that she put her husband’s career opportunities above her own and attended his workplace functions. The wife contends that she contributed to the husband’s property during the marriage by contributing to the mortgage repayments for the Property D property and by maintaining the garden. The husband denies that the wife contributed to mortgage payments and that a contribution by her of $600 per month contributed to household living expenses. There is no evidence that the wife made payments into a mortgage account and I do not accept that she made contributions which would justify an order that she receive 40% of the pool of assets ($120,000).

Section 75(2)(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;

1. The duration of the marriage was eight years, from (omitted) 2005 to13 August 2013. The wife submits that her relocation from (country omitted) to Australia had a negative impact on her earning capacity and her ability to find employment within her field of expertise. She left her employment in (country omitted) to live with and support the husband in Australia. The wife has been unable to find similar employment since relocating to Australia and is working as a (occupation omitted). In relation to these submissions, there is no evidence that the husband has done anything to affect the wife’s capacity to earn whether in Australia or (country omitted). There is no evidence that the move to Australia was anything but a joint decision made for the benefit of both parties.

Consideration

1. In regard to McMahon and McMahon (1995) FLC 92-606, where the parties had a short marriage and had for the most part, conducted their financial affairs separately and made equal contributions during the marriage, the Full Court held that in the circumstances, an asset-by-asset approach was preferable to a global approach. The Full Court held that each party should be entitled to their separate assets and that their contributions to the joint assets should be regarded as equal in light of factors such as the short duration of the marriage, the number of separations that couple had endured during their marriage and the manner in which the parties had a strict separation of assets.

2. I prefer, therefore, to approach the question of contribution to the parties’ net assets, on an asset by asset approach in light of the significant financial contributions made by the husband and the equal non-financial contributions made by both parties as identified above.

3. In these circumstances and taking the s75(2) factors into consideration, I consider that the orders proposed, that an adjustment be made in favour of the wife, is just and equitable. Having considered all the matters set out here, I consider that the wife did make a contribution to the maintenance and upkeep of the matrimonial home.

4. Currently the wife has the Nissan car and liability to pay off a loan. She sought an order that the husband take over ownership of the car and the loan. I will also order the husband be declared the owner of the Nissan (omitted) motor vehicle registration (omitted) and the husband assume responsibility for Loan Agreement (omitted) with Nissan Finance. The husband purchased the car with his funds and the wife has paid finance costs since separation.

5. The wife made financial contributions of $600 per month from about 2011, though not every month. These payments are not in the nature of a contribution of the assets of the marriage. They are a contribution to the joint living expenses of the parties during the period from 2011 to mid-2013. This would have reflected the cost of day to day living in the property. She also made contributions to decorating and the landscaping of the property which are of value.

6. In absence of detailed admissible evidence of the value of those particular contributions, I find (doing the best I can and recognising the benefits to the parties to bring this matter to finality) that the value of the contributions made is reflected by a payment by the husband to the wife in the sum of $22,000. In making the declaration in relation to the car, I note the agreed value was $28,000 and the car loan was said to stand at $6,800.

I certify that the preceding sixty-two (62) paragraphs are a true copy of the reasons for judgment of Judge McNab

Date:  14 December 2016