M and W
[2002] FMCAfam 318
•22 November 2002
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| M & W | [2002] FMCAfam 318 |
| FAMILY LAW – Property – agreement – effect of agreement on subsequent application for s.79 settlement – post-separation contributions – nature of s.79(2) discretion – s.75(2), s.79(4), s.79(2) Family Law Act 1975. |
Family Law Act 1975, ss.79, 75
Evidence Act 1995
Jones v Dunkel (1959) 101 CLR 298
Chazal v GIO (NSW) (1992) NSWLR 336
Australian Securities Commission v AS Nominees (1995) 133 ACR 1 at 12
In the Marriage of Lee Steere and Lee Steere (1985) FLC 91-626
In the Marriage of Ferraro (1993) FLC 92-335
In the Marriage of Clauson (1995) FLC 92-595
Russell v Russell (1999) FLC 92-877
Woodcock v Woodcock (1997) FLC 92-739
Burgoyne (1978) FLC 90-467
Dupont No3 (1981) FLC 91-103
Candish & Pratt (1980) FLC 90-123
White v Tulloch & White (1995) FLC 92-640
Tomasetti (2000) FLC 93-023
Sanders v Sanders (1967) 116 CLR 366 at pp379-380
Schoker & Edwards (supra)
| Applicant: | H M |
| Respondent: | A G W |
| File No: | PAM1719 of 2002 |
| Delivered on: | 22 November 2002 |
| Delivered at: | Parramatta |
| Hearing Dates: | 4 & 5 September 2002 |
| Judgment of: | Ryan FM |
REPRESENTATION
| Counsel for the Applicant: | Mr P Campton |
| Solicitors for the Applicant: | Harpers |
| Counsel for the Respondent: | Mr G Roberts |
| Solicitors for the Respondent: | Springwood Lawyers |
ORDERS
That within twelve weeks of the date of these orders the respondent husband pay the applicant wife the sum of $22,400.00.
That upon payment by the respondent husband to the applicant wife, the wife shall transfer to the husband the whole of her right, title and interest in the property situate at and known as 19 M Street, Villawood.
In the event that the husband does not comply with Order 1, the parties shall forthwith do all acts and things and sign all documents necessary to sell the property situate at and known as 19 M Street, Villawood for sale by private treaty with a real estate agent at a price to be agreed upon between the parties and failing agreement to be determined by the president of the Real Estate Institute of New South Wales or his nominee.
That the proceeds of sale pursuant to Order (3) above be disbursed as follows:
(a)firstly, in payment of the costs of sale including the real estate agents and legal fees;
(b)in payment of any outstanding rates and charges;
(c)in payment of 7 per cent of the net balance to the wife;
(d)the remaining 93 per cent to the husband.
That unless otherwise specified in these Orders each party shall be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party at the date of the making of these orders and for this purpose bank accounts are deemed to be in the possession of the person who’s name appears on the banks record thereof, insurance polices are deemed to be in the possession of the party who is named as the life insured, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements.
That unless otherwise specified in these Orders each party shall 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.
That if either party refuses or neglects to sign within 14 days of a written request to do so any document necessary to give effect to the terms of these Orders a Registrar or such other officer or person as may be appointed by the Federal Magistrates Court of Australia is hereby appointed pursuant to the provisions of section 106A of the Family Law Act to execute such documents on behalf of that party.
That all exhibits tended in these proceedings be returned at the expiration of one calender month unless an Appeal in lodged.
That all outstanding Applications are otherwise dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAM1719 of 2002
| H M |
Applicant
And
| A G W |
Respondent
REASONS FOR JUDGMENT
The Proceedings
These are proceedings for the adjustment of property.
The Application
H M (“the applicant”) filed an application for final orders at Liverpool Local Court on 4 January 2002. At the final hearing she sought orders contained in her amended response filed on 29 August 2002. In essence, the orders she sought were:
·That the former matrimonial home be sold and that she receive 65% of the net proceeds.
·That the husband pay her costs.
A G W (“the respondent”) filed a response at Liverpool Local Court on 5 February 2002. At the commencement of the hearing he filed an amended response that contained the orders sought by him at trial. In essence he proposed:
·That the application be dismissed.
·That the applicant transfer to him the whole of her right, title and interest in the former matrimonial home.
·That each party otherwise retain, subject to any liability attached to it, items of property in their possession.
·That the applicant pay his costs.
Short History
The respondent was born on 4 December 1946. He is 56 years old.
The applicant was born on 16 August 1947. She is 55 years old.
The parties were married at Windsor on 25 November 1967. This is when they commenced cohabitation.
There are two children of their marriage. M G W who was born on
23 April 1969 and D R W who was born on 21 April 1973.
On the applicant’s application a Decree Nisi was ordered on 12 July 1982.
On 11 September 1984 the applicant married her present partner P M at Casino. There are no children of their marriage.
Having divorced her second husband, the applicant married H N in 1991. They have subsequently divorced. The applicant and her second husband have resumed their relationship. They have not remarried.
The respondent has married S J W. They have a daughter, R J W who was born on 27 June 1988. R lives with her parents.
On 2 May 2002 the parties agreed that pursuant to s.44(3) the wife have leave to make an application for property orders out of time. That day the proceedings were transferred to the Federal Magistrates Court.
The issues
The primary issues are these:
·The comparative contributions made by each party as at the date of separation.
·The nature and extent of the parties’ comparative contributions made by each party subsequent to separation.
·The weight that should be attached to particular contributions.
·Whether the parties reached an agreement that they subsequently effected whereby the respondent paid out the applicant’s interest in the home.
·Whether the applicant allowed the respondent to act to his detriment believing that she would make no claim under s.79.
·The relevance of any agreement.
·Whether rental income received by the respondent from the former matrimonial home should be notionally added back.
The evidence
The applicant relied on the following evidence:
·Her affidavit sworn 20 August 2002 and filed 29 August 2002 and her oral testimony;
·Her financial statement sworn 13 May 2002 and filed 16 May 2002.
The respondent relied upon the following evidence:
·His affidavit sworn 21 August 2002 and filed 23 August 2002 and oral testimony;
·Affidavit of M G W sworn and filed 23 August 2002 and his oral testimony;
·Affidavit of L H sworn 31 September 2002 and filed 4 September 2002. This witness was not cross-examined, I accept his evidence.
Both parties tendered documents that became exhibits.
Relevant Events
At the commencement of cohabitation the applicant worked as a nurse’s aid at Penrith. She had no assets or liabilities of any significance. She continued to work as a nurse’s aid until early 1969, stopping work shortly before M was born. The respondent served in the Royal Australian Air Force. He owned a 1964 Morris 1100 motor vehicle and had approximately $200 in savings. He had no liabilities of any significance.
The respondent was discharged from the RAAF in 1970. Whilst with the RAAF he was based at headquarters operational command at Lapstone. Whilst in the RAAF in addition to his salary he received subsidised housing and health benefits. Upon discharge from the RAAF he worked for two years as a teller with the CBA Bank. Thereafter he obtained a position at Lever & Kitchen with whom he remained until his retirement. Lever & Kitchen was subject to a takeover by Visy Board, his final employers.
About three or four months after M was born the applicant resumed full time employment, working at Steel Mark as a receptionist. She again stopped work about two months prior to D’s birth and returned to work in late 1973 on a full time basis. Whilst the applicant was at work, the children were cared for by a babysitter. The applicant worked between 9.00am and 5.00pm. The respondent worked between 7.30am and 5.00pm when he was with the RAAF. I am satisfied that whilst he was with the RAAF the applicant was primarily responsible for delivering the children to the babysitter in the morning and collecting them in the afternoon. This pattern did not change after the respondent joined Lever & Kitchen.
In 1976 the parties bought their home at 19 M Road, Chester Hill. They paid $25,000 for it. Initially the mortgage was a bridging loan that was an interest only loan. The payments did not reduce the capital. $18,000 was then borrowed from St George Bank and a further $2,000 was borrowed from Sunlight Employees Credit Union[1]. These monies were all used in the purchase of the home. The balance came from their joint savings. The respondent has made all the mortgage payments.
[1] Exhibit L
In 1978 or 1979 D was injured in a motor vehicle accident. The respondent was the driver. As a result of the accident the respondent was charged with a PCA offence. On conviction he lost his licence for a period of time and was also required to attend Alcoholics Anonymous. When the accident occurred the applicant was holidaying in the United States with her sister. She curtailed the trip and returned home. D later received compensation for the injuries he suffered in the accident in the amount of $12,500. He received the monies when he turned 18.
Because it is so long ago the parties are unclear about the date they separated. The applicant swore her application for Dissolution of Marriage[2] on 29 March 1982. Because it was comparatively contemporaneous, it is likely to be more accurate than the parties’ latter recollections. Thus I am satisfied that the parties separated at the date identified in it. That is February 1981.
[2] Exhibit B
At separation the applicant commenced cohabitation with P M. She and the children lived in his home unit at Campsie for about six months. With the children she then moved to Casino where she lived with her parents, sister and a nephew. Mr M joined her in Casino, although it is not clear precisely when he did so.
On separation the respondent remained living in the former matrimonial home. The St George epitome of mortgage[3] reveals that the loan was for 25 years, repayable by 1999. As there is no evidence that prior to separation the parties made payments greater than the minimum monthly payments, I accept the respondent’s evidence that the mortgage had only reduced by about $2,000 below the capital sum initially borrowed. There is no reliable evidence from which I could conclude that the property was worth more than its original purchase price. Thus the equity in the home was approximately $9,000.00. The Sunlight Employees Loan had been paid out. Both parties took furniture that had of equivalent value. It had little value. At separation both parties retained a Datsun motor vehicle. The applicant’s car was worth about $9,000.00. The respondent’s was unencumbered and was three years older than the applicant’s. It was worth about $8,000.00. The parties had borrowed the entire purchase price of the applicant’s Datsun from Associated Midlands. At separation there was still a substantial sum owing to the finance company. After separation she returned her Datsun to the respondent because the engine had blown up and, I infer she could not make the loan repayments. Thereafter the respondent made the loan repayments in the approximate total sum of $8,000. He also had a credit card with the National Australia Bank on which $4,000 was outstanding. Those monies were subsequently repaid by the respondent without contribution from the applicant.
[3] Exhibit L
It is likely that the applicant did discuss settlement of property with her solicitors at the same time that she retained them to prepare her divorce application. Even if only briefly. That she chose not to take detailed advise from her lawyers reinforces the probability that she was not interested in making any further claim in relation to it.
Although she denies it I am satisfied that on 6 September 1982 the applicant executed a statutory declaration at Casino. During cross-examination she agreed that the signature affixed to the statutory declaration is hers. Her evidence generally on this issue was unsatisfactory and clearly intended to mislead the court. The statutory declaration[4] is to the following effect:
“I do relinquish all financial claims upon the estate of A G W of 19 M Street, Villawood. I do accept the sum of $5,000 as property and maintenance settlement. The property and contents at 19 M Street Villawood shall henceforth be in the sole name of A G W.”
[4] Exhibit G
The transfer was not effected.
The applicant consulted her solicitors again on 19 June 1987 and they wrote to the respondent on 19 June 1997[5]. Her solicitors informed the respondent that they advised the applicant in relation to family law matters and asked him to provide “all relevant documents relating tot he former matrimonial home”. The clear inference is that in spite of her earlier agreement to make no further s.79 claim, the applicant now contemplated doing so. Messrs Coleman & Greig, acting on behalf of the respondent, replied on under cover of letter 7 July 1987. That letter indicated that the parties had previously implemented the agreement. Attached to the letter was a copy of the statutory declaration apparently signed by the applicant. On 21 July 1987 the applicant’s solicitors replied to it. Excluding formal parts the letter is as follows:
“We are instructed by our client that her wish is that the two children of the marriage M G W born 23 April 1969 and D R W born 21 April 1973 have the benefit of the former matrimonial home in due course. Accordingly, she would agree to transfer the property to your client if the children’s future interests were protected.”
[5] Exhibit H
There was no suggestion that the statutory declaration was not a document previously executed by the applicant or that it did not properly reflect the agreement previously reached between the parties. Relevantly, the letter does not claim that the $5,000 had not been received. If the money had not been received it is highly likely that this would have been addressed in the correspondence. The point of the correspondence was to discuss the applicant’s possible s.79 claim and the agreement. As well as what needed to be done to give effect to it. If any aspect of the agreement remained outstanding from the applicant’s perspective it was in this exchange of letters that the obligation would have been identified. Looking at the material as a whole I am satisfied that the applicant concedes that the only aspect of the agreement that remained outstanding was proof that the respondent would bequeath his interest in the property to the children. Her failure to identify that the $5,000.00 was outstanding is in effect an admission by her that it had been paid.
The respondent said that he paid the wife the $5,000 referred to in the letter. She denies receiving it. He says he paid it in about 1982 at a picnic at Stanwell Park using a bank cheque provided by his father. His father, D W did not give evidence. The respondent explained his non-participation in the proceedings. D Ws is in his late eighties and lives in Queensland. Because of his age and the perceived difficulties associated with taking his evidence the respondent did not ask him to give evidence. Counsel for the applicant pressed the court to apply the rule in Jones v Dunkel[6] to the failure to call D Ws. In Ghazal v GIO (NSW)[7] Kirby P, with whom Mahoney and Clarke JJA agreed, explained (at 343) the rule in Jones and Dunkel (supra) thus:-
“The rule in Jones v Dunkel is one of commonsense reasoning. It provides that an unexplained failure by a party to call a witness may, in appropriate circumstances, lead to an inference that the uncalled evidence would not have assisted the case of the party who might be expected to call the witness. It is important to note that this is a facility. It is not an obligation in the reasoning of the decision-maker.”
[6] (1959) 101 CLR 298
[7] (1992) NSWLR 336
Despite the passing of the Evidence Act1995 (Cth) a Jones v Dunkel (supra) inference may still be drawn (See Australian Securities Commission v AS Nominees)[8]. I have earlier made findings that I am satisfied that the $5,000.00 was paid. The respondent’s decision not to call his father to give evidence about a transaction 20 years ago is both understandable and reasonable. He had good reason to anticipate that he could satisfy the court by other means that the money had been paid. Because of the passage of time since it was paid, other available evidence to corroborate its payment, his father’s advanced age and that he lives a long way from the court I am satisfied that I should conclude that the respondent has explained to the courts comfortable satisfaction that his decision was reasonable. I do not make the Jones and Dunkel (supra) finding pressed by the applicant’s counsel.
[8] (1995) 133 ALR 1 at 12
The husband then executed a will[9] on 24 December 1987. The will bequeathed his entire estate “Unto to my trustee upon trust for such of my children M G W and D R W as shall survive me and if more than one in equal shares as joint tenants”. As the applicant had not yet executed a memorandum of transfer, on 10 March 1988 the respondent’s solicitors sent a copy of the will to her solicitors. The applicant’s affidavit is entirely silent about these negotiations. She makes no mention that she had solicitors advising her from time to time. Relevantly, the solicitors who prepared her divorce application in 1982 also initiated the exchange of correspondence, which started on 19 June 1987. The manner in which the applicant dealt with this and other issues was manifestly unsatisfactory. Where there is a conflict between her evidence and the respondent’s evidence unless I identify otherwise,
I prefer the respondent’s evidence.
[9] Exhibit D
In her affidavit evidence the applicant said, “The husband did not exercise contact to the children subsequent to separation except for one day at the home of my mother on the far north coast of New South Wales in about 1984” [10]. This is a deliberate untruth. Not only did the respondent have greater contact to the children, but also both children at different periods lived with him.
[10] Paragraph 43
When M was about 11 years old, probably in 1982, he returned to live with the respondent. He was still in year 7 at school. After a few months he returned to live with the applicant. He remained with her a short time. His school certificates reveal he was back at Chester Hill High School in late 1983[11] at which time he was certainly living with his father. M oscillated between his parents’ homes until he turned 13. From that time he lived with the respondent on a permanent basis, returning during school holidays and some weekends to see the applicant. The respondent paid for these trips. When he was about 14 years old M left the respondent’s care and for the next two years lived with his girlfriend and her parents. On occasion the respondent gave M’s carers money towards his support.
[11] Exhibit F
Ultimately the applicant conceded during cross-examination that D also lived with the respondent for about three or four months during 1987. Although the respondent alleges that D lived with him for about twelve months, while he was 14 and 15, I do not accept his evidence. D turned 14 years in mid 1987. The respondent’s NAB cheque book, which covers the period 12 June 1987 until 12 August 1987, contains butts for cheques paid to the applicant and to D. I do not accept that the respondent paid the applicant monies for D’s support during this period. Rather, I accept her evidence that the period D lived with the respondent was considerably less than twelve months. It did not start until at least August 1987. The cheques drawn for D were in lieu of child support and supplemented monies paid on 12 June 1987 ($50) and 10 July 1987 ($240) to the applicant.
In about 1985 M returned to live with the respondent. The respondent left the former matrimonial home in January 1987 when he commenced cohabitation with his present wife S W. M lived in the home for the next twelve months. It was then vacant for a short time. From September 1988, the respondent tenanted it for about three years. The tenants were evicted after they damaged the property and failed to pay rent.
In 1991 M, his wife and their two children moved into the former matrimonial home. M has lived there ever since. Before the applicant married her second husband she returned to live in the former matrimonial home with M between February and April 1991. She then departed Australia for Fiji.
Although neither parent ever said the house was his, both have told M that the house will be left to him and his brother. I infer in equal shares. Although a formal lease has never been drawn up, M has paid rent at about $500 per month since he returned to the house. Additionally, he has made substantial repairs to the property as well as contributing to improvements to it. During 1995 or 1996 the respondent paid out the mortgage. From September 1988 the primary source of repayments was the rental income. Rental income since then has been used for rates and contributions to repairs identified in paragraph 26(b) and identified in the husband’s affidavit[12]. The amount contributed to the paragraph 26(b) repairs by the respondent cannot be quantified.
[12] Paragraph 26(b)
On 4 June 2001 the applicant severed the joint tenancy on the former matrimonial home. The parties now own the property as tenants in common in equal shares.
Since separation the applicant has paid $900 towards the former matrimonial home. This comprises half of the council and water rates subsequent to the severing the joint tenancy.
After separation the applicant received about $20,000 as compensation for a motor vehicle accident that she was injured in. Those monies were used to buy a home at Casino with her second husband. At about the same time they opened a restaurant, which unfortunately failed. Their home was sold and after discharging their debts they received about $2,000 from its sale.
Although the applicant alleged that she had taken s.79 property proceedings against her third husband in the Family Court Parramatta registry, her counsel subsequently conceded that no such proceedings were taken. The applicant did not effect a formal property settlement with either her second or her third husbands.
The respondent last worked in 1990. He and his wife now live in Brisbane in a home that she owns. In May 2002 S W underwent a mastectomy. Her cancer is terminal and she is unlikely to return to the paid workforce.
The applicant and her partner returned to live in Sydney, when they did so is not in evidence.
At about the same time as the applicant started these proceedings she told M that he must vacate the former matrimonial home. He has not done so.
Relevant Law
The approach to the determination of an application under section 79 is well established by authority (In the Marriage of Lee Steere and Lee Steere[13]; In the Marriage of Ferraro[14]; In the Marriage of Clauson[15] the process ordinarily involves a multiple part procedure. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined in section 79(4)(a) to (c) and the effect of any proposed order upon the earning capacity of either party. I must then evaluate the matters contained in section 75(2) insofar as they are relevant, any other Order made under the Act affecting a party or child and any child support under the Child Support (Assessment) Act 1989 that a party to the marriage is to provide, or might be liable to provide in the future, for a child to the marriage.
[13] (1985) FLC 91-626
[14] (1993) FLC 92-335
[15] (1995) FLC 92-595
In determining what order the court should make under section 79, the court must be satisfied in all the circumstances that it is just and equitable to do so [Section 79(2)]. It is the justice and equity of the actual orders that the court must consider. Russell v Russell[16].
[16] (1999) FLC 92-877
An important issue in this matter was whether the parties had entered into an agreement as to the adjustment of property and if so, the effect of that agreement. In Woodcock v Woodcock[17] the Full Court of the Family Court answered two questions stated by Frederico J regarding the application of the doctrine of estoppel to applications for property settlement and spousal maintenance pursuant to the Family Law Act 1975. After discussing previous authorities, including Burgoyne[18] as well as In the Marriage of Dupont (No3)[19] and Candlish and Pratt[20] to which this court was taken the Full Court held as follows. “In our view the cases referred to above clearly indicate that the Court’s jurisdiction to grant relief under s.74 or s.79 can only be ousted by court order or by agreement approved pursuant to the provisions of s.87. It may be that the ability to take into account the terms of an unapproved agreement creates in the words Hoffman LJ, “the worst of both worlds” as it will be impossible to predict from case to case, exactly what weight should be given to the agreement (Schokker v Edwards: agreement followed; cf Klesnik: agreement given little weight). However it is the unwavering thread of all the cases that the parties cannot by their conduct or agreement oust the jurisdiction of the Court.”
[17] (1997) FLC 92-739
[18] (1978) FLC 90-467
[19] (1981) FLC 91-103
[20] (1980) FLC 90-123
Woodcock (supra) clearly establishes that an agreement[21] does not establish an estoppel. The facts and circumstances relied upon to establish the agreement is nonetheless relevant in a s.79 application. For example the agreement may be relevant to whether it is appropriate to make an order (s.79(1) as well as whether it is just and equitable to make any and if so what s.79 order (s.79(2). I respectfully agree with Nygh J’s statement In the Marriage of Dupont (No 3) (supra), “It may be that where a party to an agreement allows the other to assume by tacit acceptance of compliance with the agreement that no claim will be made under s.79 and the other party acts on that assumption to his or her detriment” that this is a matter that can be taken into account pursuant to s.75(2)(o). The court is not limited to taking the agreement into account in only one instance. It can be relevant in a number of respects in the same case. This is clear from the Full Courts statement in Candlish and Pratt (supra) “The fact that the parties have entered into a Deed relating to their financial affairs (whether or not registered) is a relevant factor for the Court to consider (under s.75(2)(o) and under s.79(2) and also on general principles…”[22]
[21] other than an approved s87 deed of agreement
[22] at par 75,169
Assets and Liabilities as at the Date of Hearing
I find that the parties’ assets and liabilities as at the date of hearing are as follows. Although both parties have items of personalty of modest value, neither invited the court to make findings as to their identity nor value. Other than an issue concerning the home that the respondent lives in, it was implicitly agreed that the available assets were of approximately equivalent value and would not cause the court to exercise its discretion in favour of either party. This was a pragmatic response to the limited evidence upon which the court could make reliable findings. Otherwise the only asset is the home at 19 M Street, Villawood. Its value is agreed at $320,000.00.
The applicant has superannuation with MM Group Super Plan worth approximately $5,143.25. The respondent does not have any superannuation.
Section 79(4) Contributions
At the commencement of cohabitation neither party had any assets of value. The husband’s car and small savings were the only assets that either brought into the marriage. Neither had any liabilities. A few years prior to cohabitation the husband had jointed the Defence Forces Superannuation Scheme and had accrued a small financial resource that continued to grow until he was discharged from the RAAF. Other than two short periods when she stopped work to have the parties’ sons, both the applicant and respondent worked full time throughout the marriage.
Prior to separation the respondent received about $1,000 in 1972 from the Commonwealth Savings Bank when he cashed in his superannuation and about $3,000 from Lever & Kitchen when it was taken over by Visy Board. Visy Board gave Lever & Kitchen employees the option to take out their superannuation. The respondent took up the option. The money received was contributed to the household’s joint expenses.
A significant issue in the proceedings was the manner in which the parties spent their wages. Both allege that the other abused alcohol and that by inference money that was sorely needed for household expenses was wasted. Both deny that they abused alcohol. The respondent did abuse alcohol on the occasion that he drove whilst under its influence. This incident is insufficient to establish the course of conduct alleged by the applicant. If a party wishes to establish a controversial fact based on their own uncorroborated evidence of necessity their evidence needs to be generally credible. The applicant’s evidence on too many occasions did not withstand reasonable scrutiny. Thus I do not accept her largely uncorroborated testimony that the respondent wasted money on alcohol.
The applicant’s evidence is that after D was born, each payday the respondent would attend her workplace and collect her pay packet unopened. He then gave her about $10.00 a week, which she used as petrol money. The respondent denies her allegation. He says, “I recall that the wife used most of her income to gamble and buy alcohol. She only contributed a very small amount of her income towards family matters.” He agrees that he took responsibility for paying the mortgage, household bills, children’s clothing, his clothing and otherwise the day to day living expenses for the home. Thus it is not surprising that the applicant was unaware that he had a credit card debt with NAB at separation.
M W attempted to corroborate aspects of the respondent’s evidence. Relevantly, he said, “I recall that my parents both drank. I didn’t notice that either of them drank very much at all … I know that my mother drank. She would go out and stay out late at night on at least one or two occasions a week, but it could have been more often …”.[23] The force of his evidence was significantly undermined by his assertion that the applicant had a gambling problem. During cross-examination he conceded that his knowledge of the applicant’s gambling was limited to seeing the applicant participate in family card games at Christmas and on rare occasions throughout the year either at Evans Hill and/or Casino. He also recalls arguments about it. Otherwise, M’s evidence relates to events after separation. That she and her second husband may have played poker machines or that she gambled in 1991 does not corroborate the husband’s assertion that she also gambled during the course of the marriage.
[23] Paragraphs 12 & 13
The applicant’s evidence that she only had $10 a week from her wages given to her is inconsistent with her having sufficient monies to travel to the United States for a holiday with her sister. Because of the nature of the parties’ employment I infer that they earned a modest income. When he retired in 1990 the respondent’s income had risen to about $30,000. On balance, I am satisfied that both parties contributed their wages earned during cohabitation to joint matrimonial purposes. When evaluated comparatively the respondent made a slightly greater financial contribution as at the date of separation.
Only the respondent claims to have maintained the property by taking care of the garden, household maintenance, doing the lawns and taking care of the cars. At as the date of separation I am satisfied that he made a greater non-financial contribution to the conservation of the parties’ assets than the applicant did.
Both parties allege that they were solely responsible for the housework and primarily responsible for the care of the children. Indeed, the applicant asserts she was “solely responsible” for meeting the children’s needs. M purported to corroborate the respondent’s evidence saying, “I recall that while my father was with my mother he did all the housework”[24]. During his evidence he proffered that this was an exaggerated account and that he recalled that the applicant did a spring clean of the house about once every six months and that she may have helped prepare some meals.
[24] Paragraph 15
Ultimately, I am satisfied that both parties’ and M’s evidence on this issue is exaggerated. At separation, apparently without demurrer, the respondent agreed that the applicant could leave the matrimonial home with the two children. This outcome is inconsistent with the tenor of the respondent’s evidence that the applicant drank one or two bottles of Scotch at home per week, that she went to a club playing poker machines and drank three evenings a week and that he was solely responsible for caring for the children. It is inherently improbable that against that background the respondent would have allowed the applicant to remove the children from the home.
Similarly, the applicant’s evidence, “[the husband] did not provide me with any assistance to meet the children’s needs on a day to day basis during the period we lived together”[25] is unsustainable. Both parties were in paid full time employment. The applicant agrees that the respondent did the grocery shopping, I infer also, and bought clothes for the family when he accompanied her shopping. Because his hours of work were longer than the applicant’s, I am satisfied that she had more time to spend with the children and to do housework than the respondent did. She delivered the children and collected them from the babysitter most days. Partly, this was because the respondent left home before she did and arrived after she and the children were already at home. On balance, I am satisfied that during cohabitation the applicant made a greater contribution as a homemaker and to the welfare of the family than the respondent did.
[25] Paragraph 21
I have already made findings about the value and identity of the parties’ assets at separation. Drawing these together I am satisfied that at separation the house was worth $25,000, the furniture $4,000, the applicant’s car $9,000 and the respondent’s car $8,000.00. There is no evidence that either had any financial resources of value. Their liabilities were the St George mortgage at $16,000.00, the Associated Midlands car loan of $8,000.00 and the respondent’s NAB credit card at $4,000.00. Thus there was a net equity in the matrimonial assets of $18,000.00. The respondent took assets, including the applicant’s car when it was returned to him worth $44,000.00. He also assumed sole responsibility for repayment of the matrimonial debts at $28,000.00. On his salary this was an onerous financial burden. Although she initially took the car, the applicant relinquished it rather than pay the loan. Thus she received assets worth $2,000.00. Importantly she was debt free.
Shortly after separation, in furtherance of their agreement, the respondent paid the applicant $5,000.00. Thus the applicant received assets worth $7,000.00 as compared to the respondent’s $16,000.00. The $5,000.00 advanced by the respondent’s father was a gift to him. It is a contribution made on his behalf. See Gosper[26].
[26] (1987) FLC 91-818
Other than $900.00 paid towards rates during 2001, the applicant has made no financial contribution to the home. During the periods that M and D lived with her she supported the children from income earned by her with almost no financial contribution by the respondent. D turned 18 in 1991. At least since that time she has used all her income for her own purposes. Nor since separation has the applicant made any non-financial contribution to the maintenance, conservation and improvement of the matrimonial assets.
At separation she took the assets that she wanted to have and upon payment of the $5000.00 and in effect abandoned responsibility for the home and joint matrimonial debts. The respondent was placed in a precarious financial situation, left to service comparatively significant debt from his limited wage. I am satisfied that only by adroit financial management was the respondent able to pay out the joint liabilities. Over the term of the balance of the mortgage, when interest is taken into account, he paid considerably more than the $16,000.00 outstanding at separation. Clearly the applicant wished to leave the home and to start a new life with her partner. She had somewhere to go and to a considerable degree was uninterested in what she left behind. Without the respondent’s commitment to the property in the sense that he tried to keep it, it is likely that it would have been sold. Similarly, unless he had agreed to take over responsibility for the Associated Midlands debt after the applicant failed to make payments, the applicant’s Datsun would have been sold by the finance company. It is probable that after selling costs, agent’s commission and repayment of the debts attached to the home and car there would have been only a few thousand dollars remaining.
The respondent’s willingness to retain the home and accept responsibility for all of the matrimonial debt is a contribution that has pivotal importance to the proceedings. Had he not accepted responsibility for the debt and home and then met that responsibility it is likely that there would have been no assets of value within about 12 months of the parties’ separation.
His contribution continues to this day. He lived in the home until January 1987. Throughout that period he made all mortgage payments, maintained the property and paid all its outgoings. M lived in the home, without apparently paying rent for 12 months. The home was then vacant until the respondent tenanted it. The tenants paid $100.00 per week which income the respondent received. The income contributed to the expenses incurred for rates, water, house insurance and towards the mortgage. The combined rates totalled about $1,500.00 per year.
The wife’s counsel submitted that the court would notionally add back the rental income earned over the years. This included rent from the 1988 rental as well as that paid by M. The respondent used this money to primarily support the property. After 1990 it was his primary source of income. To the extent that any money was left over, I am satisfied that it has been used for his day to day living expenses. Because of the passage it would be a grave injustice in these circumstances to add back and then redistribute the rental income between the parties. I am not satisfied I should do so.
At some time, after M, his wife and children moved into the former matrimonial home, the applicant stayed for a period of time. There is no evidence that suggests that she made any financial or non-financial contribution to the property whilst she lived there.
When evaluated comparatively since separation the respondent has made a significantly greater financial contribution than the applicant has.
In addition to minor running repairs, the respondent paid for significant improvements to the home. Between September 1984 and April 1992 he spent $18,270.00 completing the repairs identified in paragraph 26(a) of his affidavit. This included cladding the house and replacing its windows in 1994. These improvements cost $8,900.00 and were paid for from a gift received from the respondent’s father. This is a contribution made on his behalf.
I have already made findings about the improvements made by M to the home. Although primarily paid for by M, the respondent made a financial contribution in some instances, the extent of which cannot be quantified. The respondent maintained a responsible, active interest in the home’s state of repair and has not allowed M to treat the property as his own. The respondent was very dissatisfied with his first experience as a landlord and I infer that M’s occupation of the home is conditional upon his paying rent as well as maintaining the property in reasonable repair. It appears likely that there is a connection between the amount of rent paid and the responsibility, not usually undertaken by tenants, to maintain and improve the property. M’s contributions to the property are an indirect contribution made on behalf of the respondent. That is because the respondent alone accepted responsibility for the property, its state of repair, contributed in some instances to improvements made by M and in a general sense oversaw his occupation.
Post separation both parties made a contribution to the welfare of the family. The applicant made a greater contribution than the respondent did. Other than for the short periods to which I have earlier made reference, D lived with the applicant continuously after separation. She received little financial support. Although she denies it I am satisfied that the respondent did “send pocket money and money for special purposes such as school uniforms and requested”[27].
[27] Wife’s Application for Dissolution of Marriage Exhibit B.
During the periods that M lived with him the respondent supported M without contribution by the applicant. Additionally, the respondent paid for the children’s travel between Casino and Sydney. M travelled more frequently than D did. When M left the family the respondent made occasional payments to M’s carers. The amounts were insignificant and I do not take them into account. When evaluated comparatively, the applicant’s contribution to the welfare of the family particularly in her capacity as parent are greater than the contribution made by the respondent post separation.
In my view the parties’ contributions during cohabitation, a period of approximately 14 years should be regarded as equal. Both contributed their income to joint matrimonial purposes. Both contributed to the welfare of the family, although the Applicant’s contribution was greater than the Respondent’s. He maintained the property and made a greater non-financial contribution than the Applicant did.
Since separation the applicant’s contribution as homemaker and parent exceeded the respondent’s. The respondent’s greater financial and non-financial contributions to the property comprise a substantial contribution that must have very considerable weight. It must be taken into account in a real and substantial way. Had the applicant taken any active interest in the home it may have been that by leaving the asset intact she contributed to it after separation. She did not do this. Metaphorically, she washed her hands of the their property and the matrimonial debts. Although she had a legal responsibility (excluding the NAB credit card debt) she ignored her responsibility. Other than on one occasion, from which I am satisfied she hoped to achieve a forensic advantage, she ignored her liability to pay rates. Thus I am satisfied that the applicant did not contribute to the property, other than paying $900.00 after separation.
The applicant’s post separation contribution as a homemaker and parent must be given real weight. Weighing the parties’ contributions during the course of cohabitation resulted in a finding that they were equal. After separation the applicant made a greater contribution to the welfare of the family than the respondent did. The applicant made no financial contribution post separation. The contributions by the respondent financial and non-financially to the home after separation must have significant weight. The applicant’s contributions ceased when D turned 18. The respondent’s have continued for a further 11 years. I am satisfied that the parties’ contributions should be valued as 15% by the applicant and 85% by the respondent. In reaching this conclusion I have given the applicant’s contribution to the welfare of the family real weight. It is the particular significance of the respondent’s contribution post separation, as well as its duration, which when his care of M is considered substantially compels this result.
Section 75(2)
Subsection (a)
The applicant is 55 years old. She is in good health. The respondent is 56 years old. He is in reasonable health. I make no adjustment pursuant to the subsection.
Subsection (b)
The applicant is employed full time with TLE Electrical and Data Suppliers. She works in administration and sales in a clerical capacity. She earns $673.08 salary from which she pays tax of $145. She has household effects and a credit union account balance of $1,500. The respondent has not worked in the paid workforce since he moved to Queensland. Until recently, his wife S worked part time and he has taken responsibility for their home and daughter. His income comprises the rent monies received from M and a Centrelink parenting payment of $87 per week. He has a 1972 and a 1975 Datsun motor vehicle. Each has a current market value of $1,000. Otherwise he has savings of $18 and personal assets of $200. Both parties have comparable physical and mental capacity for employment. Section 75(2)(b) requires that “the income, property and financial resources of each of the parties’ be taken into account. The case law indicates that financial interests that may constitute financial resources rather than property include:[28]
·the potential “interest” of a beneficiary under a family trust;
·prospective superannuation benefits;
·a non-transferable business licence;
·future long-service leave entitlements;
·an ability to control assets as a company director, shareholder, trustee or appointor of a trust.
[28] As discussed by Anthony Dickey in Family Law (4th Edn), Lawbook Co., 2002 at pp. 720-721.
In Bonnici and Bonnici (1992) FLC 92-272 the Full Court of the Family Court stated (at p.79,020) that “[t]he expression “[financial] resource” is and should be confined to those interests which do not fall into the definition of property as such to which the parties have a present entitlement”. The Full Court held (at p.79,020) that an inheritance received by the husband was “property” and considered whether it should be treated like other property in which the parties have an interest.
In White and Tulloch v White (1995) FLC 92-640, the Full Court of the Family Court (per Fogarty, Kay and Hilton JJ) stated (at p.82,458) that they “do not consider that a prospect of an inheritance can be regarded as a “financial resource”” as that term “connot[es] some degree of entitlement to, control over, or relative certainty of receipt of property.” A will “is a mere expression of intention at the time it is made and may be freely revoked or altered … and … it has no legal effect until the death of the testator.”
Doctor L H concluded “Mrs [S] W now has incurrable cancer….it is almost impossible for medical treatment to cure the condition….A life expectancy of two years could be considered generous”.[29] I am satisfied that she is likely to die within the next two years. During cross-examination the respondent said that his wife has bequeathed her home to R. He has a right of occupation, but he is unsure of its duration. The applicant’s counsel submitted that his right of occupancy should be treated as a financial resource. While in some circumstances that may be so, this is not one of them. However, because this is a matter in which s.75(2) has considerable prominence, this finding does not exhaust the relevance of the possible inheritance. It must be considered further but within the context of s.75(2)(o). The applicant has a greater income than the respondent has as well as the opportunity to earn an income for at least another 5 years. She has the chance to grow her superannuation albeit to a limited extent, which he does not. I make an adjustment pursuant to this subsection in favour of the respondent
Subsection (c)
[29] Report dated 2 September 2002
Neither party has responsibility for the care or control of a child of the marriage. I make no adjustment pursuant to this subsection.
Subsection (d)
The applicant is able to meet her expenses from her income. Her income is significantly greater than the respondent’s. Because he lives in his wife’s home, the respondent does not have rent or mortgage commitments that he is personally responsible for. Were it otherwise, his income is insufficient to provide for his necessary commitments. The respondent has a responsibility to support his daughter R and foster son B. His responsibility for R will continue for no more than four years. B has his own income of $200 per week. I infer that this income is provided by state welfare authorities and is secure. It is sufficient to meet B’s needs. The respondent does not assert that he has financial commitments attributable to B that are not met from the allowance received for B. Thus I do not take commitments incurred for B into account. I make an adjustment pursuant to the subsection in favour of the respondent.
Subsection (e)
The applicant does not have a responsibility for any other person. Her partner is apparently self-sufficient. Because of her ill health the respondent may find that his wife will need his financial support. Unless he sells M Street or borrows against it he does not have the capacity to meet this possibility. I will deal with this issue under s.75(2)(m). I make no adjustment pursuant to the subsection.
Subsection (f)
The respondent receives a Centrelink parenting payment of $87 per week. This is a modest sum. Since separation the applicant has contributed to the MM Group Super Plan which plan has a current value of $5,143.25. She has the opportunity to grow the fund from her earnings. The respondent does not have superannuation and will not acquire any. I make a small adjustment under the subsection in his favour.
Subsection (g)
Since separation, both parties have lived in apparently modest circumstances. For a number of years the respondent lived in the former matrimonial home, which home is modest. The applicant bought a home at Casino which she lived in until it was sold to repay debts. Since then she has lived in rented accommodation. The respondent has lived with his second wife in a home that she owns. The parties appear to have continued a standard of living that is reasonably comparable to that which existed during the course of their marriage. Neither party obviously spends money on extravagances, nor are they wasteful. Nonetheless the evidence does not reveal why the applicant and her husband, both of whom have been in full time paid employment, have not bought themselves a place to live. I am not satisfied that after they resumed cohabitation that they could not have done so had they wanted to. I make no adjustment pursuant to this subsection.
Subsections (h) – (k)
I make no adjustment under these subsections.
Subsection (l)
The respondent and his wife decided that he would be primarily responsible for R and B’s care. He will continue his full time role as a parent. R and B are 14 and 15 years old respectively. Because of their ages the respondent’s parenting responsibilities do not require the intensive supervision that younger children need. R and B have reached an age where they don’t need the respondent to be at home and available for them within ordinary working hours. I make no adjustment pursuant to this subsection.
Subsection (m)
Both parties have re-partnered. The applicant lives with her second husband. On average he earns $528 per week. Details of his assets, expenses and financial resources were not provided. Because the applicant and her partner are living in rented accommodation, I infer that he does not own a home in which they could live. His modest income increases the likelihood that he has few assets. S W owns her home at 13 Windsor Street, Alexandra Hills. There is a paucity of evidence as to its value and whether or not it is encumbered. Until her recent illness, she had an average weekly income of $385. Including B’s income, the respondent’s family had a total income of about $800 per week. This modest sum makes it likely that S W has few savings and her assets, other than her home, are limited in value. Because she is terminally ill, it is unlikely that she will return to the paid workforce. Consequently, her income will fall. She is likely to be entitled to Centrelink benefits. Thus the family will have little income other than government benefits upon which to live. Possibly the respondent will need to realise his interest in M Street or increase its earning capacity to support borrowings he may secure against it. His evidence did not reveal how he and his wife planned to cope financially because of her illness. As he is highly unlikely to ever work again they are in a very difficult situation. However because of the paucity of evidence as to their management of this issue I cannot come to any clear conclusion about it. I make no adjustment pursuant to this subsection.
Subsection (n)
The orders will provide that the applicant will be paid a comparatively modest sum of money. It may provide her with a capital sum that can be used towards the deposit on her own house or unit. She will need to borrow a sizeable sum of money if she is to re-enter the property market. I cannot assess whether she is likely to be able to do so. The respondent will have an asset worth about $280,000.00 (nett) more than the applicant will receive. Section 75(2)(n) achieves a cross-referencing between s.75(2) and s.79. In the Marriage of Todd (No.2) [30]. The terms of the order result in an outcome favourable to the respondent. This outcome is just and equitable. Were I satisfied that the applicant was likely to incur significant costs, for example stamp duty on a purchase I would have considered an adjustment in her favour. Because such a conclusion is speculative at best I cannot be satisfied that she is likely to incur them. I make no adjustment pursuant to the subsection.
Subsection (na)
[30] 1976 (FLC) 90-008
This does not arise.
Subsection (o)
I am satisfied that the respondent is likely to have the right to live in his wife’s home after she passes away. Their marriage is apparently a strong one and they agree that he will continue his role as their daughter’s prime carer until she reaches her majority. There is no suggestion that his relationship with his daughter is other than a happy one. Thus his right of occupation is a valuable resource that means he will have a home to live in indefinitely. I make an adjustment pursuant to the subsection in favour of the applicant.
Subsection (p)
This issue does not arise.
Having regard to all of the section 75(2) factors I find it appropriate that there should be an adjustment in the respondent’s favour having regard to subsection 75(2)(b) and (d) as weighed against the findings in the applicant’s favour pursuant to section 75(2)(o). The appropriate adjustment to make in the respondent’s favour is 8 per cent. This outcome reflects the cumulative outcome of the findings I have made pursuant to section 75(2). See Tomasetti .[31]
[31] (2000) FLC 93-023.
Section 79(2) is this a just and equitable outcome?
Twenty years ago the applicant relinquished any interest, not in a legal sense, in the assets and liabilities acquired during the marriage. She accepted a distribution of the assets that was favourable to the respondent by about $9,000.00. When the realisable value of the assets is considered the distinction is minuscule. When she accepted the $5,000.00 she confirmed their earlier agreement that she would make no further claim for property settlement. She unequivocally represented that she would not pursue an application for property settlement. Whether or not the respondent managed to keep the house by servicing all the joint matrimonial debts was of little interest to her.
Five years later when it appeared that the respondent would save the assets, with the benefit of further legal advice again she unequivocally declared that she would make no further claim for property settlement. This was conditional upon the respondent’s agreement that he would bequest the home to their children. He agreed to do so and gave her a copy of his will. Thus to the extent possible it was done. Since then the respondent’s actions have ensured that the assurance he gave that the property would be available on his demise for their adult children would be given effect to. I am satisfied that once he made his will and gave the applicant his assurance he has at all times intended to honour their agreement. He still does and given the opportunity would do so.
During the ensuing 15 years by her conduct the applicant continuously implied that no claim was to be made. Does justice and equity demand that the agreement in these circumstances be enforced by the court. Although the discretion is wide it is not unfettered. The nature of the discretion was discussed by the Full Court of the Family Court in Schoker and Edwards (supra). The majority comprising Gun and Elliot J’s said “As Windeyer J commented in Sanders v Sanders (1967) 116 CLR 366 at pp379-380 in connection with the effect of the “just and equitable” phraseology in s.86 of the repealed Act: “the discretion must of course be exercised according to accepted principle, for what is just and equitable in this jurisdiction is not a matter of unfettered individual opinion”.
One of the important factors in Schoker and Edwards (supra) which resulted in the majority in effect upholding the agreement was the hardship that would be caused to the husband and his present wife if the s.79 orders made in the court below were given effect to. The court accepted that he and his present wife would incur a considerable loss of the wife’s investment upon the sale of their assets. That is not the situation here. Whilst I accept that the respondent would prefer not to encumber or sell the home, doing so will not result in such manifest hardship that the applicant’s s.79 entitlement is outweighed. There is a reasonable possibility that he may be able to borrow the sum he is ordered to pay the applicant. He can service the repayments from the rental income. If he is unable to borrow money the house must be sold. As he has a home that he can live in this does not justify the court exercising its discretion pursuant to s.79(2) to make orders inconsistent with its findings made pursuant s.79(4) and s.75(2).
Thus the respondent must pay the applicant 7 percent of the nett value of the home. He must pay her $22,400.00. He will have 12 weeks within which to do so. This slightly longer periods recognises that he will need to make detailed enquires of lending bodies to find one that may lend him money. Otherwise the house must be sold. From its proceeds, after payment of the costs of its sale the applicant shall receive 7 per cent and the respondent the remaining 93 percent.
I am satisfied that in the particular circumstances of this case the outcome is just and equitable.
For these reasons I make the orders identified at the start of this judgment.
I certify that the preceding one hundred and two (102) paragraphs are a true copy of the reasons for judgment of Ryan FM
Associate:
Date: 22 November 2002
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