Lombardi & Lombardi

[2007] FamCA 331

FAMILY COURT OF AUSTRALIA

LOMBARDI & LOMBARDI [2007] FamCA 331

FAMILY LAW - PROPERTY SETTLEMENT – Contributions - Relatively short marriage of 4 ½ years duration- No children of the marriage - Initial contributions of parties upon entering marriage a significant component of their contributions - Also capital sums introduced by or behalf of the parties - Marriage of sufficient length to warrant consideration of contributions of parties as home makers - Contributions apportioned 47.5% to the wife, 52.5% to the husband - Each party to retain their respective superannuation entitlements - Each party sought to retain the former matrimonial home - Possibility of redevelopment of property in the future - Property to be sold - Unfair to require one party to transfer his or her interest in the property to the other

Family Law Act 1975 (Cth) S75(2)

Mallet & Mallet (1984) 156 CLR 605

APPLICANT: MRS LOMBARDI

RESPONDENT: MR LOMBARDI

FILE NUMBER: ADF 228 of 2006

DATE DELIVERED: 18 April 2007

PLACE DELIVERED: Adelaide

JUDGMENT OF: Judicial Registrar Forbes

HEARING DATE: 23 March 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr McQuade

SOLICITOR FOR THE APPLICANT: Tindall Gask Bentley

COUNSEL FOR THE RESPONDENT: Mr Richards

SOLICITOR FOR THE RESPONDENT: Cardone & Associates

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Court delivered this day will for all publication and reporting purposes be referred to as LOMBARDI & LOMBARDI

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADF 228  of 2006

MRS LOMBARDI

Applicant

And

MR LOMBARDI

Respondent

REASONS FOR JUDGMENT

1. The matter for determination is settlement of property.  It comes on before the Court on the Amended Application of the wife.  The application relates itself to a house property at E and certain items of personalty.  The wife seeks that the husband transfer his interest in the E property to her upon terms.  She also seeks the delivery up of certain items of personal property.  That is an agreed matter and a minute of order should be included in minutes of orders referred to at the conclusion of these reasons.

2. The husband has filed an Amended Response.  He seeks that the home be transferred to him upon terms.  As mentioned, he makes the concession as to the delivery up to the wife of certain items of personal property.

3. The parties married in December 2000.  The wife was then 20 years of age, the husband 23 years of age.  Cohabitation commenced as and from the date of the marriage.  The parties then separated in July 2005.  They were together for 4½ years or thereabouts.  There are no children of the marriage. 

Pre marriage matters

1. In 1998 the husband purchased an engagement ring for the wife at a cost of $4,700.  The parties are agreed that the engagement ring should be sold and the proceeds divided equally between them.  This is also a matter which can be included in the draft minutes of order.

2. In 1998 the husband received by way of gift from his parents a Nissan 1990 model motor vehicle.  It cost approximately $12,000 to $13,000.  It was registered in the sole name of the husband.

3. In 1999 the wife’s father purchased a Kia sedan at a cost of about $30,000.  The wife had the use of the vehicle from time to time prior to the marriage but upon marriage, it became her responsibility.  The vehicle at all times was registered in the wife’s father’s name.  He says that he considered it to remain his property.  Importantly, I believe, was the fact that the comprehensive insurance taken on the vehicle remained in the name of the wife’s father.  The husband says that the motor vehicle should be regarded as a vehicle owned by the wife.  The evidence is that the wife’s father was prepared to permit his daughter to have the use of the motor vehicle, although he considered it to be or to remain his property.  The husband and wife also effectively concede that they permitted the vehicle to remain in the name of the wife’s father.  There were apparently savings which could be made with insurance premiums.  I am satisfied that the Kia motor vehicle at all times remained the property of the wife’s father and that it ought not to be brought to account as an item of property for the purposes of these proceedings.

4. In August 2000 the husband’s parents agreed to sell to him a home unit at P.  They agreed to sell the unit to the husband for the sum of $70,000.  The Valuer General at the time valued the unit at $111,000.  The parties agree that the unit had a value of $111,000 at the time of the transfer.  The husband borrowed all of the money necessary to effect the transfer.  He took a loan with the Commonwealth Bank in the sum of $70,000.

5. In the four months from purchase until marriage, the husband spent $1,940 on making improvements to the unit and painted the premises with the assistance of his father.  He also says that he paid for the laying of floorboards at a cost of $2,950.  The wife disputes this item.  She says she paid that sum.  The document, the receipt for the payment, in fact was in the wife’s name.  The receipt doesn’t necessarily mean of course that it was the wife’s money that was used to pay for the item but I believe it is supportive of what the wife says about the expenditure and am satisfied that it is money that she contributed from her funds.

6. The wife’s parents purchased certain items of property - a DVD, television and stereo.  The husband’s parents purchased a fridge and washing machine.  The parties themselves jointly purchased a bedroom suite, dining table and chairs. 

7. At the date of the marriage the husband held:

   Unit P value  $111,000
            less mortgage  $70,000        $41,000
   Nissan motor vehicle (H’s estimate of value)     $5,000

   Bank account estimated                 $5,000        $51,000

8. The wife held the following:

   X Term Deposit  $17,226

   Adelaide Bank Savings (last balance 9.11.00)    $18,855             $36,081

Contribution during marriage

1. The husband and wife each had employment throughout the period of the marriage.

2. The wife paid $17,208 towards the mortgage indebtedness.  This sum came from moneys held at marriage.  That payment was made on 10^th January 2001.  Successive payments of $10,000 on 9^th February 2001 and 19^th March 2001 were also made towards the mortgage.  This money came from gifts which the parties received by way of cash upon marriage.  The parties upon marriage commenced paying the mortgage at $300 per week. 

3. In addition to the lump sums aforementioned, it can be seen that further cash sums were paid on account of the mortgage namely:-

   18^th May 2001  $5,000
   8^th August 2001  $8,000
   12^th October 2001  $2,000
   12^th July 2002  $14,000

   Balance of loan repayment

   6^th August 2002  $8,595

   These payments are not the subject of evidence.

4. The parties also drew down on the loan as follows:

   14^th August 2001  $7,000
   9^th May 2002  $20,000

   These withdrawals are not the subject of evidence.

5. The wife says that she also received cash gifts from her father and points to deposits in her savings account which total $13,300.  The wife says these moneys were made available for use within the marriage.  The moneys were used towards holidays or in reduction of the mortgage.  For the wife’s part she maintains that she contributed lump sums totalling $50,000 either to the mortgage or towards marital expenses. 

6. The wife concedes that the husband made contributions of:

   Unit equity  $40,000
   Nissan motor vehicle  $6,000
   Bank account  $5,000
   Gift from husband’s parents        $14,000        $65,000

   She says that the husband told her that his contributions totalled $75,000 and I understand her to be making a concession as to at least $65,000 of that sum.

7. In June 2002 the husband and wife purchased a property at E.  The wife says it was a property which was found by her father and that she was attracted to it because it represented potential for redevelopment.  As it was, it comprised an old house on a large allotment and it was capable to being developed into three townhouses.  She says the husband and her agreed that they would proceed with the purchase of the property with the purpose of demolishing it and redeveloping the site.  After settlement she says that she and the husband then instructed the draftsman to prepare design plans for three townhouses to be placed on the allotment with the home to be demolished.  She says the only purpose in purchasing E was to effect a redevelopment of it.  The wife concedes that with further enquiry she ascertained that the expense of three courtyard homes made the venture uneconomic.  She says that the husband and her then consulted an architect in 2004 and 2005 who recommended the demolition of part of the main house and the building of a single courtyard home at the rear.  She says that she and the husband were intending to proceed with that development at the time of separation.

8. The husband says that the E property was purchased for the sum of $290,000 with borrowing from the Commonwealth Bank.  He says it was purchased in mid 2000.  He says the loan over the unit at P was paid out as part of the finance obtained on the property at E.  He says that the amount to discharge the mortgage on the unit at P was an estimated $24,000 but I understand him to be conceding for the purposes of the evidence that it was in fact the sum was $8,596.  The total Commonwealth Bank borrowing was $310,000.  The husband says his parents contributed $14,000 towards the stamp duty on the purchase of E which is the aforementioned sum of $14,000 which I understand the wife to be conceding as a further contribution by the husband.

9. In December 2003 the husband sold the Nissan motor vehicle.  He received the sum of $5,000 for it by way of trade-in and purchased a BMW motor vehicle at the sum of $40,000.  This money, the $35,000 shortfall required, was obtained by his drawing down on the Commonwealth Bank mortgage.

10. In May 2004 the husband effected a sale of the P unit at the sum of $205,000.  The net proceeds of sale were $203,517.  This money was paid towards the Commonwealth Bank mortgage on the E property.  That mortgage he says had then owing on it the sum of $273,000.

11. The wife provides particulars of her income throughout the period of the marriage as follows:

    1999$11,281

    2000$19,187

    2001$24,612

    2002$27,336

    2003$32,379

    2004$37,991

    2005$44,051

    2006$48,702

    She has worked throughout as an administrative assistant.

12. The husband does not allege particulars as to his income but says that he was the manager of certain organisations such as a budget supermarket,  F Company, M Company, W Company, V Company and more recently, as a consultant with C Company.

13. The wife says that she was the principle home maker during the marriage.  She says she was the one who purchased the groceries and items for the household as well as preparing and cooking the meals.  She says she attended to the vacuuming, washing, ironing, making beds and general household cleaning.  She says the husband rarely assisted with household chores.  She says he did mow the lawns and attend to gardening.  She says that the husband spent much of his spare time washing and detailing the BMW motor vehicle.

Separation

1. The parties separated on 24^th July 2005.  At separation the property of the parties comprised:

   E Property
   Furniture
   BMW motor vehicle (husband)
   TAB shares (wife)
   Jewellery (wife)
   N superannuation (wife)
   B superannuation (wife)
   L superannuation (husband)

   Liabilities

   Commonwealth Bank mortgage  $32,000

2. At separation the wife left the home.  The husband has remained residing in it although he concedes that he spends much of his time at his parents.  They live just a short distance from the matrimonial home.  The husband says that he has paid the rates and taxes and the utilities as well as the mortgage repayments.  He has also paid for the cost of electrical work in the sum of $439.50.

3. On 26^th April 2006 the husband increased the mortgage borrowings by an amount of $54,005.40.  This the wife points out occurred without her knowledge or approval.  Not to be outdone, on 28^th April 2006 the wife withdrew $54,500.  On that same day the husband withdrew $750 and again, the same amount on 1^st May 2006.  On 2^nd May 2006 the wife withdrew $1,532.50.  She says that she reimbursed the account with moneys taken, the total sum of $54,032.50 on 12^th May 2006.  The husband made a deposit of $25,000 on 11^th August 2006.  The parties have an agreed position as to the mortgage and drawings upon it since separation and it comprises:-

   Balance presently owing        $69,270.73
            Less  $30,609.31    $38,661.42

   The husband accepts liability for the balance, the sum of $38,661.42 and this is an amount which is to be an adjustment in the final settlement.

4. The parties agree to approach the matter upon the basis that the property and liabilities of the parties should be brought to account as follows:

   E Property  $520,000
   BMW motor vehicle (husband)    $23,400
   TAB shares (wife)  $1,000

   Superannuation:

   L (husband)  $19,552
        B (wife)  $14,169      $578,121
   Liabilities

   Mortgage balance  $30,609           $547,512

Final thoughts as to contribution

1. The period from marriage until separation is comparatively short and hence the contribution to which it relates can be identified and weighed.  At marriage it can be seen that the husband brought in property to the value of $51,000 or thereabouts comprising:-

   Equity in unit  $41,000
   Nissan motor vehicle  $5,000

   Bank account  $5,000        $51,000

2. The wife had an amount of $36,000 (rounding down)comprising:-

   X Term Deposit  $17,226

   Adelaide Bank Savings                 $18,885

3. The parties then contributed equally to the mortgage on the unit.  The wife’s father contributed further cash sums totalling $13,300.  When E property was purchased the husband’s parents contributed a further $14,000 towards stamp duty.

4. Each of the parties worked and made contribution from earnings.  The earnings paid for their ordinary living costs and as well contributed to the payments due on the mortgage, initially as to the premises at P and then E.  The wife says that she made the greater contribution as a home maker.  It is difficult to know what to make of the allegation.  She says that the husband’s efforts were in respect of maintaining and detailing his motor vehicle.  The husband says, and I believe that he made further contribution by painting the interior of the premises.  The paint cost $240 which the husband’s father obtained at a discounted rate.  Otherwise, he says he worked “hard” on the premises.  I believe that is the generality of the matter, whilst the wife was attending to the household duties, as she says, the husband was attending to other matters, not just his motor vehicle.  She does not say, for instance, that he was a lazy person or anything of that nature. 

5. Husband’s counsel did not refer to the benefits that the parties would have derived from the ability to have had the ownership of the P unit from the outset.  Emphasis has been made as to the contribution by the parents of a value in the unit, but it seems to me that there is also a component of contribution attributable to the husband by his having the unit in the first place and market forces operated over the next four years to effectively present the parties with a windfall.  Not an unimportant matter I would have thought.  Husband’s counsel in the Outline of Case also represents that the moneys owing on the mortgage on P property upon its sale in May 2004 totalled $23,000.  Wife’s counsel points to the husband’s assertion in paragraphs 38 and 39 of his affidavit of evidence-in-chief to the effect that the Commonwealth Bank mortgage on P had been effectively paid out at the time of its sale.  The husband is saying that he sold the P unit to his brother and his brother’s wife for $205,000 and the husband goes onto say that the net proceeds of sale of the unit was $203,570.91 which sum was credited to the mortgage which had been taken on E.  As wife’s counsel, Mr McQuade, points out the parties had effectively paid out the mortgage on P at the time of its sale.

6. The parties had the use of the motor vehicle supplied by the wife’s father and therefore saved the capital costs of purchasing a vehicle themselves.

7. The husband argues for an apportionment of contribution of 60:40 in his favour.  Husband’s counsel says that that represents a 10 per cent adjustment as between the parties.  However, I would prefer to look at what the apportionment actually represents, namely a 20 per cent difference between the respective totals of each of the parties.  The other concern about the adjustment being just 10 per cent is that it is subject to the risk that it comes from a 50:50 starting point.  That as a starting position has its own problems, per Mallet & Mallet (1984) 156 CLR 605.

8. Wife’s counsel seeks a finding as to equality of contribution.

9. The property pool excluding the superannuation totals $559,400.  The liabilities are an agreed amount owing on mortgage of $30,610 (rounding up), therefore a net sum of $528,790.  10 per cent of that sum is $52,879. 

10. The wife is 26 years of age.  The husband is nearly 30 years of age.  The superannuation of the husband and wife is $19,552 and $14,169 respectively.  Given the ages of the parties, the values attributing to their current superannuation entitlements and the fact that ordinarily they would not accrue until the parties are 60 years of age, these are matters which persuade me not to bring the superannuation to account with the other property of the parties.

Final thoughts as to contribution

1. The marriage was not of great length and hence the initial contributions which can be attributed to the parties, respectively is a significant component of contribution.  So too, later capital sums introduced by or on their behalf.  As best as can be discerned, these contributions represent in moneys worth $49,300 to the wife and either $65,000 or $66,000 to the husband.  The wife’s contributions of this kind represent 43% of the total contributions, the husband 57%. 

2. There are other contributions which need to be accounted for.  To start the marriage, owning your own accommodation is an important factor, as well as the payment out of the mortgage on P property achieved in part by payments of $300 per week towards the mortgage.  Whilst the period in question is not five years, it is a period of sufficient length to warrant a consideration of the contribution of the parties as home makers.  Each of the parties has made significant contribution.  Overall there is not a significant difference in their respective contributions and I believe that should be reflected in the apportionment to be attributed to them.  Bringing to account that 10 per cent represents $52,879, I would apportion contribution at 47.5% to the wife and 52.5% to the husband; a difference between them of 5 per cent or $26,439.50.

3. There should be no splitting order as to the superannuation.  The parties should retain their respective entitlements.

Section 75(2)

1. As previously mentioned the wife is 26 years of age and the husband is nearly 30 years.  Each of them have work and otherwise enjoy good health.  There are no dependant children.  The marriage was of somewhat short duration and there is no suggestion that its impact had an effect upon the earning capacity of either of the parties.  In these circumstances, no adjustment is warranted on account of the section.  This approach accords with the position taken by each of the parties.

Just and equitable

1. The parties are at odds as to what is to become of the former matrimonial home.  They each seek it.  The husband is in occupancy but it seems he is there at the premises little of the time.  His parents live nearby and it seems he spends as much if not more time at the home of his parents as he does at the former matrimonial home.  He says that whilst he and the wife looked at the home for the purposes of redevelopment, he has no such intentions at this time.  He seeks to retain it simply as his place of abode.

1. On the other hand, the wife seeks that the property be transferred to her.  She seeks to redevelop it.  She says the property is suitable only for the purposes of redevelopment, that the home in its present condition should be wholly or partially demolished.  She says that she wishes to proceed and develop the property as was originally intended by her and the husband and she significantly, I believe, considers that the husband is harbouring similar intentions.  She says that the proximity of the home to the husband’s parents’ residence was never a factor in the decision made to purchase the property and she takes the view that it is not a matter which ought to be weighed in the determination of what should become of the property at this time.

2. I am satisfied that the matrimonial home should be sold.  It seems to me that only by the property being placed on the market for sale with each of the parties being given liberty to bid that the claims of each of the parties can be recognised.  It seems apparent from the outset they were both minded to redevelop the property.  In these circumstances it would be unfair to require one party by order to transfer his or her interest in the property to the other.  The husband says that he would wish to retain the home as a place to live but there is nothing in the circumstances in which he has retained possession of the property that would suggest that that of itself is a factor and it may also be that whilst he is presently of the view that he would wish to retain the property, that is not to say that he will not in due course take a different view as to the matter.  The wife is uncompromising in her position as to the initial desire to redevelop the property and her ongoing attitude in that regard.

3. As mentioned, consent orders can be made as to the sale of the engagement ring and the distribution of furniture.  The sale of the home would involve the following calculations:

   Total property (excluding superannuation)  $544,400

   Net property excluding home  $24,400

   Wife 47.5%  $11,590

   Wife has:  $1,000

   $10,590

   The net proceeds of sale of E should be apportioned as to 52.5% to the husband:
   less the sum of $10,590.00 payable to the wife
   less the sum of $38,661.42 which it is agreed the husband should pay towards the mortgage as mentioned in paragraph 27 hereof.

   The wife would receive the $10,590.00 payable by the husband and otherwise 47.5% of the net proceeds based on a mortgage liability of $30,609.31.

4. The parties may wish to confer as to the appointment of an agent for sale and the methodology to be adopted, viz, whether auction, tender or private treaty.  They may also have views as to the asking price.  I will hear from them in that regard.

I certify that the preceding forty seven (47) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Forbes.

Associate: 

Date:  18.4.07