MACFARLENE & SORRELLS

[2020] FamCA 1048

FAMILY COURT OF AUSTRALIA

MACFARLENE & SORRELLS [2020] FamCA 1048

FAMILY LAW – PROPERTY SETTLEMENT – Just and equitable - where the main asset of the relationship is the former matrimonial home – where the husband resides in the property with the children of the relationship – where orders are made for the husband to retain the property on the basis of a cash payment being made to the wife – where an adjustment is made in favour of the husband on the basis of his contributions and his greater responsibility for the support of the children.

FAMILY LAW – PROPERTY SETTLEMENT – Contributions – loans by family members – where both parties were advanced funds by their respective families – where the wife asserted a loan from her mother – where the husband denied that it was a loan – where there was no formal loan agreement nor any request for repayment – where although a loan it is not included as a liability in the asset pool and is instead taken into account as a contribution made by or on behalf of the wife.

FAMILY LAW – PRACTICE AND PROCEDURE – Transfer of proceeding – where the matter was transferred from the Federal Circuit Court.

Evidence Act 1995 (Cth) s 140
Family Law Act 1975 (Cth) ss 90SM, 90SF, 102NA

Af Petersens and Af Petersens (1981) FLC 91-095
Dickons & Dickons [2012] FamCA 154
Kennon v Kennon (1997) FLC 92-257; (1997) 22 FamLR 1
Pierce & Pierce (1999) FLC 92-844; [1998] FamCA 74
R v Watson; Ex parte Armstrong (1976) 136 CLR 248
Stanford & Stanford (2012) 247 CLR 108

APPLICANT: Ms Macfarlene

RESPONDENT: Mr Sorrells

FILE NUMBER: MLC 7928 of 2015

DATE DELIVERED: 17 December 2020

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Macmillan J

HEARING DATE: 22-24th June 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Radich

SOLICITOR FOR THE APPLICANT: Lampe Family Lawyers

COUNSEL FOR THE RESPONDENT: Mr Richardson

SOLICITOR FOR THE RESPONDENT: Vernon Da Gama and Associates

Orders

1. That on or before 1 February 2020 the husband pay the wife the sum of $130,018 (“the payment”).

2. If the husband fails to pay the wife the payment by 1 February 2021, the husband shall pay the wife interest on the amount outstanding from time to time from the due date to the date of payment (both days inclusive) compounding monthly at the rate prescribed by the provisions of the Family Law Rules 2004 (Cth).

3. That contemporaneously with the payment the wife and the husband shall do all acts and things and sign all documents necessary to:

   (a)Transfer to the husband all of the wife’s right, title and interest in the real property situated at and known as B Street, C Town, Victoria being the whole of the land more particularly described in Certificate of Title Volume … Folio … (“the C Town property”) at the husband’s sole expense (“the C Town property transfer”)

   (b)Contemporaneously with the C Town property transfer the husband shall do all acts and things and sign all documents required to discharge the mortgage registered over the C Town Property and thereafter the husband shall indemnify the wife in respect of any and all other liabilities affecting the property including but not limited to any outstanding rates.  

4. That contemporaneously with the payment, the wife do all such acts and things and sign all such documents that may be required to withdraw any Caveat lodged by her, on her behalf or in relation to any debt payable by the wife, on the C Town Property.

5. In the event that the whole of payment has not been made pursuant to Order 1 or if the husband is unable to refinance the mortgage over the C Town property into his sole name then the wife and the husband shall do all acts and things necessary for the C Town property to be forthwith placed on the market for sale by public auction, with the husband to nominate the Real Estate Agent to act on such sale of the C Town property on such terms and conditions as recommended by the agent with the conveyance of the sale to be managed by the husband’s solicitors and the sale proceeds to be applied in the following manner and priority:

   (a)Firstly, to pay all costs (including any legal costs incurred in relation to the conveyance), commissions and expenses of the sale;

   (b)Secondly to repay and discharge the mortgage and all other encumbrances encumbering the C Town Property;

   (c)Thirdly the payment, or such part thereof that has not been paid by the husband to the wife pursuant to Order 1 hereof together with interest calculated pursuant to Order 2; and

   (d)Finally, the balance to the husband less 43.5% of any amount paid at settlement by way of outstanding rates which is to be paid to the wife.

6. Pending the sale of the C Town Property:

   (a)The husband shall have the right to occupy the property and shall be liable for and pay the mortgage, the home insurance and all rates as they fall due;

   (b)Neither party shall encumber the C Town Property and

   (c)The parties hold their respective interests on trust.

7. The husband shall forthwith do all acts and things to sell the motorcycle 1 as soon as possible and the proceeds of sale to be divided 56.5% to the husband and 43.5% to the wife.

8. That the wife retain for herself to the exclusion of the husband:

   (a)       Furniture in D City;

   (b)       Jewellery; and

   (c)       Motor Vehicle.

9. That the husband retain for himself to the exclusion of the wife:

   (a)       All funds held in the Commonwealth Bank Account #...81;

   (b)His tools, equipment, motor cycles, lawn mowers, motor vehicles, photographs, his personal documents, certificates and all other items and belongings situated at the C Town property; and

   (c)All motor vehicles standing in the name of the husband.

10. That the husband be solely liable for and indemnify the wife absolutely against all payments and liability whatsoever in respect to the husband’s personal credit cards, Commonwealth Bank Credit Cards, rates and/or any other liability affecting the C Town property and any claim made by the estate of his late father.

11. That the wife be solely liable for and indemnify the husband absolutely against all payments and liability whatsoever in respect to the wife’s personal credit cards and any personal loan/s obtained by the wife.

12. That other than as herein provided the wife and the husband both be declared the sole legal and beneficial owner of all other items of property presently in their possession or control but not limited to:

    (a)All other real and personal property in their possession custody and control including but not limited to money, real property, motor vehicles, equipment, furniture, furnishings, choses in action and personal interests;

    (b)All interests in life insurance policies and superannuation funds standing in their sold names; and

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

IT IS FURTHER ORDERED THAT

Costs

1. All questions of costs be reserved for determination in Chambers.

2. By 4.00 pm on 29 January 2021 the parties file and serve any written submissions in support of any application for costs arising out of or incidental to the Wife’s Further Amended Application filed 14 May 2020 and the Husband’s Amended Response filed 29 May 2020.

3. By 4.00 pm on 26 February the parties file and serve any written submissions in reply to any applications for costs.

4. Any submissions as to costs should be limited to 10 pages.

5. That all extant applications be dismissed and removed from the list of cases awaiting hearing, save and except for any applications for costs.

IT IS DIRECTED THAT

1. All documents produced to the Court pursuant to subpoena and exhibits relied upon by the parties be returned by the subpoena clerk of the Family Court of Australia, Melbourne Registry, to the person or organisation who produced same.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Macfarlene & Sorrells has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 7928 of 2015

Ms Macfarlene

Applicant

And

Mr Sorrells

Respondent

REASONS FOR JUDGMENT

Introduction

1. The applicant de facto wife (hereinafter referred to as “the wife”) and the respondent de facto husband (hereinafter referred to as “the husband”) commenced a relationship in December 2007 separating finally on 15 July 2015, a relationship of some 8 years. The wife commenced proceedings in the Federal Circuit Court of Australia (“Federal Circuit Court”) on 24 August 2015 seeking both parenting orders and an adjustment of the parties’ property interests pursuant to s 90SM of the Family Law Act 1975 (Cth) (“the Act”).

2. In my view this was a matter that could and should have been dealt with by the Federal Circuit Court, however on 11 April 2018 it was transferred to this Court. Although the parties have been able to agree upon parenting arrangements and final parenting orders were made by consent on 6 June 2018 and despite two conciliation conferences they were unable to reach agreement with respect to a division of their property and there was an ongoing dispute between them, in particular, in relation to the property at B Street, C Town (“C Town Property”) and the contributions made by each party at the beginning, during and the conclusion of the relationship. As a result the matter has taken up a great deal of the Court’s time and the parties have spent significant sums on legal fees.

Background

1. The wife was born in 1975 and is currently 45 years of age. The husband was born in 1968 and is currently aged 52. The husband had a brain aneurysm in 2006 and is currently in receipt of a Disability Support Pension although there is some dispute with respect to what if any income he currently earns and his capacity to earn income.  The wife works as a driver, tailoring her hours to allow her to care for the children when they are in her care. It is the wife’s evidence that the hours she works have been reduced as a consequence of the Coronavirus Pandemic and she is currently in receipt of the Jobseeker allowance.

2. There are four children of the relationship W born in 2009 (now 11 years of age), X born in 2010 (now 10 years of age), Y born in 2014 (now 6 years of age) and Z born in 2015 (now 5 years of age). The children live with the husband and spend time with the wife during the school term in a two week cycle from after school or 3.30 pm, whatever is the earliest on a Friday until the commencement of school or 9.00 am, whatever is the earliest the following Thursday and each alternate Friday to Thursday thereafter. The children then spend half of the school holidays with each parent.

3. The parties bought the C Town property shortly after they commenced their relationship. Thereafter they transported and completed construction of a pre-built home on the land.  They moved into the property in late 2011 and lived there until July 2015 when the wife left the property and moved to Suburb E with the children following separation.

4. A final Intervention Order was made by the Magistrates Court at D City on 17 January 2020. The order is for a period of two years and lists the wife as the defendant and the husband and the children as protected persons. As a consequence an order was made pursuant to s 102NA of the Act and both parties thereafter applied to the Commonwealth Family Violence and Cross Examination of Parties Scheme and were legally represented.

The Evidence

1. The standard of proof is the balance of probabilities. Pursuant to s 140 of the Evidence Act 1995 (Cth) the court in determining that it is satisfied to the requisite standard must take into account the nature of the cause of action or defence, the nature of the subject matter and the gravity of the matters alleged.

2. The wife relied on the following documents in support of her case:

   a)Further Amended Initiating Application filed 14 May 2020;

   b)Affidavit of Ms Macfarlene filed 14 May 2020;

   c)Financial Statement filed 14 May 2020;

   d)Affidavit of Mrs F Macfarlene filed 14 May 2020; and

   e)Affidavit of Ms G filed 18 June 2020.

3. The husband relied on the following documents in support of his case:

   a)Amended Response to Initiating Application filed 29 May 2020;

   b)Affidavit of Mr Sorrells filed 29 May 2020;

   c)Affidavit of Ms H filed 29 May 2020; and

   d)Financial Statement of Mr Sorrells filed 29 May 2020.

4. Both the husband, the wife and the wife’s mother Mrs F Macfarlene were cross-examined and both parties tendered documents in support of their respective cases.

5. I have had regard to all of the evidence including the parties’ Affidavits and the Affidavits of their witnesses, the oral evidence of the parties and Mrs F Macfarlene and the documents tendered in evidence.

6. Although the asset pool in this case was relatively modest there were significant factual disputes in particular, although not limited to, the parties’ contributions and the contributions made by their respective parents during the relationship.

7. Having heard their oral evidence I generally preferred the wife’s evidence to that of the husband. Her recollection was better than the husband’s, she was able to provide significant detail which added weight to the credibility of her evidence and she made appropriate concessions.  Mrs F Macfarlene was both a cogent and measured witness, she was able to provide details which in my view added to the force of her evidence and she similarly made appropriate concessions.

Legal Principles

1. Section 90SM(3) of the Act requires the court to be satisfied that it is just and equitable to make orders adjusting the parties’ interests in property. This is a requirement that is readily satisfied in this case. The parties’ only asset of any significance is the C Town property which is registered in their joint names. The husband currently has the use of the property to the exclusion of the wife and in my view justice and equity requires that the parties both have access to the equity in this property.

2. Being satisfied that it is just and equitable to make orders adjusting the parties’ interests in property, the court must make such orders as it considers appropriate. Whilst the court has a broad discretion as the plurality in Stanford & Stanford (2012) 247 CLR 108 (at page 121) observed, citing R v Watson; Ex parte Armstrong (1976) 136 CLR 248 (at page 257) it is not an unfettered discretion and must be exercised “in accordance with legal principles, including the principles which the Act itself lays down.” Section 90SM(4) of the Act provides as follows:

   In considering what order (if any) should be made under this section in property settlement proceedings, the Court shall take into account:

   (a)The financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship or a child of the de facto relationship to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and

   (b)The contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship or a child of the de facto relationship to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them, or otherwise in relation to any of the last-mentioned property, whether or not that last mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and

   (c)The contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and

   (d)The effect of any proposed order upon the earning capacity of either party to the de facto relationship; and

   (e)The matters referred to in subsection 90SF(3) so far as they are relevant; and

   (f)Any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and

   (g)Any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.

3. Section 90SM(4)(e) of the Act is a reference to the matters in s 90SF(3) of the Act in so far as they are relevant to the particular case broadly speaking taking into account both the present and anticipated circumstances of the parties.

The Asset Pool

1. The first step is to identify the parties’ legal and equitable interests in property. By the conclusion of the hearing the parties had an agreed asset pool save and except with respect to whether the $30,000 paid to the wife by her mother should be included as a liability. The husband did not concede that it was a loan.

2. The wife deposed that in October 2008 her mother lent her and the husband $30,000. This was confirmed by the wife’s mother who deposed in her Affidavit that she had a verbal agreement with the husband and the wife with respect to repayment of the loan. She also said that she did not set a timeframe as she was aware that the husband and wife were in a difficult financial situation and that in hindsight she should have insisted that the husband and wife sign a written agreement.

3. The husband deposed that the wife had told him that her mother had $30,000 in trust for her future and that she had made it available to them when they were building the house. Both the husband and the wife and the wife’s mother were cross-examined about the alleged loan. The wife’s mother was able to recall where she was when she and the wife had a telephone discussion about the loan and it was her evidence that the husband was with the wife at the time. When it was put to Mrs F Macfarlene that she would not have had any idea if the husband was present it was her evidence that she could hear him in the background. Mrs F Macfarlene readily conceded that there was no time frame, that she had not asked the husband and wife for repayment prior to or following their separation and in cross examination said that had the husband and wife stayed together she may not have asked them to repay the loan.  

4. Whilst the wife and her mother were able to provide significant detail with respect to the conversation they say took place, the husband generally denied any knowledge of that conversation and although he acknowledged the $30,000 paid by the wife’s mother he denied that there had been any reference to it being a loan until after the proceedings commenced. I found the evidence of the wife, and in particular the evidence of her mother, persuasive and I do not accept as submitted by counsel for the husband that the Court would require further evidence such as a loan agreement if it were to find that the $30,000 was a loan. I am satisfied on the balance of probabilities that there was a discussion about the loan and that the husband was present and knew that it was intended to be a loan.

1. However, that being said the wife’s mother has not made any demands for repayment and given her evidence and the amounts she has since advanced to the wife I am not satisfied that she is likely to require repayment. As Nygh said in Af Petersens and Af Petersens (1981) FLC 91-095 (at 76-669):

   It is fairly common in this Court to meet a situation where a parent has made a loan to a child which is in all respects legally enforceable, but which is not in fact enforced and would not really be expected to be enforced. It is no doubt an ``obligation'' but if the obligation is not likely to have to be met, it should not be taken into account.

   (Emphasis Added)

2. Notwithstanding that I am satisfied that it was a loan it does not necessarily follow that the loan should be included as a liability in the asset pool. In all of the circumstances of this case I do not propose to include the $30,000 as a liability in the asset pool and will as submitted by the husband take it into account as a contribution made by or on behalf of the wife.

1. On that basis the asset pool less the liabilities available for division between the parties is as agreed (“Exhibit W1”) as follows:

Owner	Value ($)
ASSETS
1	B Street C Town Victoria	Joint	$380,000
2	Furniture at B Street C Town Victoria	Respondent Husband	$1,000
3	Incomplete motorcycle 1	Respondent Husband	$200
4	Motorcycle 2	Respondent Husband	$2,600
5	Incomplete motorcycle 2	TO BE SOLD
6	Motorcycle 3	Respondent Husband	$200
7	Two push bikes	Joint	$300
8	2008 motor vehicle	Applicant Wife	$2,500
9	2001 motor vehicle	Respondent Husband	$500
10	Ride on Mower	Respondent Husband	$800
11	Back-hoe	Respondent Husband	$3,000
12	Motor vehicle 3	Respondent Husband	$1,000
13	2 project cars	Respondent Husband	$700
14	Tools and equipment	Respondent Husband	$1,000
15	Four guns	Respondent Husband	$1,000
16	Furniture with the Applicant at D City	Applicant Wife	$800
17	Jewellery Collection	Applicant Wife	$500
Total Assets			$396,100
Liabilities
18	ANZ Mortgage	Joint	$81,500
19	Respondents’ ANZ Credit Card	Respondent Husband	$7,000
20	Respondents’ Line of Credit	Respondent Husband	$700
Total Liabilities			$89,200
Superannuation
22	Husband’s ATO Superannuation	Respondent Husband	$1,657
23	Wife’s Superannuation	Applicant Wife	$716
Total Superannuation			$2,373
TOTAL ASSET POOL			$309,273

Contributions

1. Although the wife in her Affidavit referred to a history of family violence she ultimately did not submit that this was a case in which the principles in Kennon v Kennon (1997) FLC 92-257 would be applicable. Rather it was her case that as a consequence of the husband’s family violence she suffers from anxiety and depression and has Post Traumatic Stress Disorder which has impacted upon her ability to earn income.

2. The parties otherwise submitted by the conclusion of their respective cases that the Court should find that they had made equal contributions during the relationship and post separation save and except with respect to monies advanced or gifted to them by their families. There was also a significant dispute with respect to the husband’s initial contributions.  

Initial Contributions

1. The wife deposed that at the commencement of the relationship she had a 1979 motor vehicle which was worth, at that time, approximately $1,800.  She further deposed that the husband sold the vehicle for approximately $1,800 in or about November 2009 and retained the proceeds. The husband deposed in reply that the vehicle was in disrepair and riddled with rust and that it was sold for $500. He also deposed that the wife kept the proceeds. In any event, although I generally prefer the wife’s evidence, I am satisfied that the wife had assets of very minimal value at the commencement of cohabitation.

2. The husband set out a table in his Affidavit of the assets he said he had at the commencement of cohabitation and the values he attributed to them. They included an interest in the property he owned with his former wife, they having agreed that she would pay him $60,000 for his interest. The husband said based upon this table that he had assets at the commencement of the relationship valued at $153,000. The table of assets in the husband’s Affidavit was as follows:

Assets	Value ($)
1	An interest in the J Town property with my ex-wife Ms H. On 10 September 2008 my ex-wife Ms H and I agreed on a division of our joint property with a case settlement payment to be made to me in the sum of $60,000.	E60,000.00
2	Motor vehicle 4	10,000.00
3	Motor vehicle 5	18,000.00
4	Bus	2,000.00
5	Tandem horse float	4,200.00
6	Ride-on mower 1	2,200.00
7	Ride-on mower 2	1900.00
8	Ride-on mower 3	3,400.00
9	Ride-on mower 4	3,000.00
10	Mower	362.00
11	Motorcycle 4	865.00
12	Dune buggy	1,950.00
13	Motorcycle 5	510.00
14	Motorcycle 6	8,700.00
15	Motorcycle 7	3,500.00
16	Motorcycle 8	3,000.00
17	Motor vehicle 6 restored	5,700.00
18	Motor vehicle 7	920.00
19	Tilt trailer 7 x 5	455.00
20	Aluminium boat and canopy	4,150.00
22	Motorcycle 9	2,600.00
23	Motorcycle 10	1,860.00
24	Motorcycle 11	1,570.00
25	Motorcycle 12	1,350.00
26	Motorcycle 13	1650.00
27	Motorcycle full exhaust system	175.00
28	Chainsaw 1	350.00
29	Chainsaw 2	600.00
30	Chainsaw 3	750.00
31	Automotive repair shop tools including s/s workbenches	2,000.00
32	Panel repair shop tools including welder	2,500.00
33	Household furniture including vintage kitchen table	1000.00
34	Aluminium boat and trailer	1,100.00
TOTAL	152,317

1. I am satisfied that a number of the items in the husband’s table are still in his possession and are part of the asset pool including the motor vehicle 4, a ride on mower, although it is not clear which mower as there were a number of ride on mowers listed and the husband has tools and equipment which have an estimated value of $1,000. It is not clear what if any of those tools he had at the commencement of the relationship save that there is no mention in his Affidavit of the sale of any tools.  

2. The wife for her part deposed that at the commencement of the relationship the husband had the following assets:

   a)A Motor vehicle 4 which she estimated was worth $10,000 although it was later sold for $400;

   b)A Motor vehicle 5 with an estimated value of $18,000;

   c)A mini bus body with an estimated value of $2,000;

   d)A horse float with an estimated value of $1,000;

   e)A ride on mower with an estimated value of $800;

   f)Three motor bikes with an estimated total value of $3,000;

   g)A ”tinny” fishing boat with an estimated value of $1,500; and

   h)The $60,000 property settlement to be paid to the husband by his former wife.

3. The husband attributed values to most of the items in his list based primarily upon the amount he said they were sold for producing invoices and receipts and eBay sales records evidencing the alleged sales of the various items.

4. There were a number of issues with respect to the husband’s evidence in relation to this issue. Firstly the wife disputed the items the husband said he had owned at the commencement of cohabitation. The wife was able to answer questions about having seen or not seen specific items whereas, although the husband produced photographs of some of the items he said he owned and the wife was cross-examined at length about these items, he had to acknowledge that there were some inaccuracies in his evidence. One example was with respect to a motor bike the husband deposed he had sold to meet the costs of construction but was not included in the list of assets he said he had at the commencement of cohabitation.  

5. The wife also gave evidence about some of the items referred to by the husband being in parts and the husband buying and fixing up cars, motor bikes and other items such as ride on mowers for resale. I note that although the husband said during cross-examination that he only bought new not old stock for resale and had not restored any cars, motorbikes or machinery during the relationship, it was put to the wife in cross-examination by way of a challenge to the reliability of her evidence, that the husband had bought and sold motor vehicles from time to time during the relationship. The husband also agreed in cross-examination that he was “pretty good” at fixing motorbikes and vehicles.

6. The wife’s evidence about this issue was in my view much more persuasive than the husband’s evidence. In cross-examination she was able to identify items that she said that husband may have had at the commencement of their relationship and made appropriate concessions. I also accept her evidence with respect to the husband buying and fixing up items for sale. The wife also referred to the husband having told her about items he had sold prior to them commencing cohabitation and I note that some of the receipts and/or invoices he annexed to his Affidavit were for transactions in December 2007 shortly after the commencement of cohabitation.  To the extent that the husband relied upon the eBay records I note that there is no record of the date of the sales on those eBay records he produced.   

7. In so far as the husband relied upon the various invoices and receipts annexed to his Affidavit with respect to value of the items on his list this evidence was in my view far from conclusive. Some of them appear to be written on scraps of paper, some are undated, the receipt for the motor vehicle 5 which the husband said was sold in March 2008 had the address of his former matrimonial home and some of the invoices did not appear to be in order. One example was invoice number …43 for the sale of the ride on mower 1 which was sold according to the invoice on 23 December 2007 and invoice number …41 for the sale of an aluminium boat on 23 December 2007. Whilst it is possible that the husband inadvertently completed the invoices out of order in my view it raises questions about the reliability of this evidence.  

8. Ultimately I am not satisfied that the husband had all of the items he said he later sold at the commencement of cohabitation, that he sold those items without having restored or worked on them during the marriage or that they were worth the value he attributed to them. In any event even if I had been satisfied this is not an accounting exercise in which the Court attributes a value to the parties’ initial contributions and adjusts their entitlements according to the respective value of those contributions. The Court is required to weigh up all of the parties contributions.  

9. I am satisfied that at the very least the husband had the items deposed to by the wife albeit the values both the husband and wife attribute to them are far from clear. The husband ultimately submitted that the Court should accept that he had brought to the relationship items worth at least $40,000. Although I am not satisfied on the balance of probabilities based upon the evidence that the husband either had all of the items he says he had at the commencement of cohabitation or that they were worth or realised the amounts he says and I cannot make findings with respect to specific dollar amounts, I am satisfied that I should and I have had regard to the husband’s greater initial contributions.

Other Financial Contributions During the Relationship

1. As previously referred to I propose to take into account the $30,000 advanced by the wife’s mother as a contribution on the wife’s part. I am also satisfied that the wife’s mother paid $5,000 which was held as security by K Council and ultimately repaid on 24 November 2011.  The wife’s also said that her mother had given her $5,000 which she used to pay for the colourbond roof and that her grandmother had given her $5,000 which she put towards the cost of the house and some smaller amounts which her grandmother had told her to spend on herself and the children. The wife also deposes and her evidence was not challenged that her mother would regularly help out with grocery shopping and other expenses. The wife’s mother confirmed the wife’s evidence. The parties agree that they repaid $5,000 to the wife’s mother. Although the husband deposed that another $5,000 was repaid to the wife’s mother on 21 April 2010 he based that on what he said was the wife’s notes on a bank statement which said “repaid mum’s deposit” although he also acknowledged that it had been crossed out. This was not put to the wife or her mother in cross examination and in all of the circumstances I prefer the evidence of the wife and her mother. Although the husband agreed that the wife’s grandmother had given her $5,000 he did not agree that it had been all used for the house. Whether it was all applied to the construction of the house I am satisfied that it was a contribution made on the wife’s behalf.

2. The husband’s father also assisted the parties the husband says lending him $13,000 although he said later in his Affidavit the figure was $15,000 towards the deposit on the C Town property which the husband says he repaid out of the settlement he received from his former wife. The husband also said that his father lent him $5,000 in December 2010, $5,000 in January 2011 and a further $5,600 in July 2011, a total of $15,600 and that there is over $10,000 still owing to his father’s estate. The wife deposed that they used $10,000 of the money they received from the First Home Buyers Scheme to repay the husband’s father and that the husband painted his father’s property to cover the balance of the loan. Although the husband agrees that he did some painting work for his father and does not recall being paid for that work he denied that they paid his father $10,000. I generally prefer the wife’s evidence and on that basis I am satisfied that there are no monies owing to the husband’s father which need to be taken into account either as a liability or alternatively as a contribution on the husband’s behalf.

3. On this basis I am satisfied that during the relationship there were contributions made by family on the wife’s behalf of in excess of $40,000 whereas any monies lent to the husband have been repaid.

Contribution based Entitlements

1. As previously referred to an assessment of the parties’ respective contributions is not a mathematical exercise nor is it based solely upon their financial contributions. As the Full Court said in Dickons & Dickons [2012] FamCA 154 at [24]:

   …There can be little doubt that the classification of contributions by reference to terms such as “initial contributions”, “contributions during the relationship”, and “post-separation contributions”, can be helpful as a convenient means of giving coherent expression to the evidence in a s 79 case and to giving coherence to the nature, form and extent of the parties’ respective contributions. However, the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship.  So much is clear from the terms of s 79 itself and, in particular, s 79(2). The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship. 

2. In my view the parties and in particular the husband, as evidenced by the way  in which he put his case have focused on their financial contributions ignoring their other contributions. For example the husband put his case on the basis of a comparison of the parties’ financial contributions concluding that 73% of those financial contributions being referable to the husband the Court should find that he is entitled to 70% of the asset pool. The figures he used were the $60,000 that the he received by way of settlement from his first wife, $40,000 for the property he said he brought to the relationship as against the $30,000 the husband said the wife received from her mother, the $5,000 he said she received from her grandmother and $1,800 being the value of the wife’s car at the commencement of cohabitation. Even if I accepted the husband’s figures and I do not, this is not the correct approach and completely disregards the other contributions the parties have made over the course of their relationship and since separation.

3. In so far as it was submitted referring to the decision of the Full Court in Pierce & Pierce (1999) FLC 92-844 that the parties may not have had a house were it not for the husband’s significant initial contribution it could equally be applied to the contributions made by the wife’s family on her behalf which whilst not as great as the husband’s initial contribution were also not insignificant in the context of this case.

4. In my view the husband made initial contributions of $60,000 and had various items of property which he which he either sold or which still form part of the asset pool. The wife for her part received $40,000 from her family plus some smaller amounts from both her mother and grandmother. The parties contributions which include the income they earned during the relationship, the work they did on the property and their care of each other and the children over a period of some 8 years are otherwise equal. In my view the difference between the financial contributions made by the husband and the commencement of the relationship and on behalf of the wife during the relationship must be weighed up against all their other contributions and assessed in that context. In all of the circumstances I am satisfied that the parties contributions should be assessed as 53/47 per cent in the husband’s favour, the difference in dollar terms between their respective entitlements based upon a pool including superannuation of $309,273 is $18,556.

Other Considerations

1. The husband is 52 years of age and is in receipt of a disability pension. The wife is 45 years of age and works part time as a driver. The children live with the father 8 nights per fortnight and 6 nights per fortnight with the mother. They share the school holidays. The children are 11, 10, 6 and 5 respectively.

2. It is the husband’s case that he should receive an adjustment of between 2 and 5 per cent in his favour having regard to his more limited income earning capacity and his greater responsibility for the children’s care.

3. There is no dispute that the husband suffered a brain aneurism in 2006 and has been in receipt of a disability benefits since 2007. However it is the wife’s case that at the commencement of the relationship she was working as a sales agent for a company and that the husband was working in sales for the same company. The wife says that she stopped working after the birth of their first child. The wife also deposed that although the husband stopped working whilst they were building the house in 2012, after the house was completed, he went back to working as a salesperson for the same company. She says this involved him being away for periods of 4-6 weeks at a time. The wife also deposed that the husband did small car repair jobs, gardening and fencing for cash. The wife’s evidence was that the husband told her that he did not declare his income to Centrelink because he did not want it to affect his disability benefits.  

4. Although the husband admitted doing some small car repair jobs and occasional gardening he said that he had never worked away from home for 4-6 weeks at a time and denied not declaring his income.

5. The wife was cross-examined briefly about her evidence in relation to the husband working. It was put to her that she had not produced any documents to support her evidence and it was her response that the husband was paid in cash and that there were no records apart from references in bank statements to petrol and food purchases when he was away working.

1. However, significantly in my view the husband deposes that at the commencement of the relationship both he and the wife were working in sales on a casual basis and also says (at [41] of his Trial Affidavit) that he “tried very hard to continue my line of work as I loved my job” but that he could not perform well enough to continue. What he does not say is when he stopped work and there is no evidence before me as to his current capacity for employment. Although the husband refers to having undertaken a Job Capacity Assessment in 2008 I am satisfied that whatever that assessment may have been he was in employment after it was completed.

2. In her Affidavit the wife’s mother also deposed to having stayed with the wife and the children for some weeks in 2014 while the husband was working as a sales representative in NSW and country Victoria. She described the husband as the major breadwinner at that time.  

3. Weighing up all of the evidence I am satisfied that the husband has been in employment notwithstanding his health issues and that he currently has some capacity for employment and can earn income as he did during the relationship doing panel beating work and other odd jobs.

4. Whilst the wife hopes to obtain employment in real estate she is currently in receipt of jobseeker payments and is working 2 or 3 shifts a fortnight driving. I am ultimately satisfied that neither party in this case has a significant income earning capacity.

5. The parties have very limited superannuation entitlements and in these circumstances it is not surprising that neither party sought superannuation splitting orders.

6. The wife’s capacity to contribute to the children’s support beyond those times when they are in her care is presently limited. In these circumstances the husband is meeting a greater proportion of the children’s expenses. Given the wife’s limited income earning capacity this is not likely to change significantly in the foreseeable future albeit if the wife’s income does increase her obligation to pay child support will also increase.

7. The husband has had the benefit of the C Town property since separation now almost 5 years ago. However it is also the children’s home and the only home they have known.

8. In all of the circumstances which includes in this case the limited assets owned by the parties and the parties desire for the children to continue living in the C Town property I am satisfied that there should be a further adjustment of 3.5 per cent in the husband’s favour, having regard in particular to his greater responsibility for the support of the children. This represents in dollar terms a further adjustment in the husband’s favour of $10,824. The difference between their respective entitlements based upon a 56.5/43.5 per cent division in the husband’s favour is $40,205, with the wife’s 43.5 per cent entitlement rounded up in order to come to a total of $309,273. I am satisfied orders giving effect to an adjustment in these terms is just and equitable.

Effect of the Orders

1. On this basis the husband is entitled to $174,739.  

2. The husband wishes to retain the C Town property for himself and the children and the wife is in favour of him doing so subject to him paying her entitlements based upon my findings.

3. On that basis the husband would be keeping the real property subject to the mortgage, the other items he owns which have an agreed value of $12,300, his superannuation and he will be responsible for payment of his ANZ credit card and the line of credit, a total of $7,700, amounts the parties agree were owing at separation. On this basis he will retain net assets of $304,757. As at the date of the final hearing there were outstanding rates of approximately $8043. Although at the commencement of the hearing it was the husband’s case that he and the wife should be equally liable for those rates he ultimately conceded that as he had had the benefit of living in the property he should be responsible for the rates and the orders reflect that position. Whilst this will not be an issue if the husband makes the payment to the wife and the property is transferred to his name, if the property is to be sold and some or all of the rates remain outstanding whatever amount is paid out at settlement needs to be accounted for out of the husband’s share of the net proceeds.  

4. On the basis of a 56.5/43.5 per cent split in the husband’s favour the wife is entitled to $134,534. She has her furniture which the parties agree is worth $800, jewellery worth $500, a motor vehicle worth $2,500 and superannuation entitlements of $716. If the husband wishes to retain the C Town property he will need to pay the wife $130,018.

5. It is the husband’s case that he has pre-approval for a loan of $100,000, however if he wishes to retain the C Town property he will need to borrow and additional amount of approximately $30,000 or sell some of the other items he is to retain as part of his entitlements.

6. Although it was initially the husband’s case that he should be given 6 months to pay the wife having indicated that I was not satisfied that the time frame he proposed was either necessary or that it would be just and equitable for the wife to have to wait a further 6 months, he ultimately proposed that he be allowed 60 days in which to make the payment.  The wife sought orders based upon a payment within 30 days. As previously referred to the husband has had the benefit of living at the C Town property since separation whereas the wife has either had to live with her mother or pay for rental accommodation. These proceedings have been on foot since 2015 and in my view the wife should receive her entitlements and the parties ongoing financial relationship should be brought to an end as soon as possible. It is now some months since the hearing concluded and the husband having already obtained pre-approval for a loan, has also had the time to investigate the possibility of borrowing more than $100,000. In all of the circumstances I am satisfied that I should allow him 45 days in which to make the payment to the wife.

7. In the event that the husband is unable to obtain the finance he needs to retain the property, the property will be placed on the market for immediate sale and the proceeds divided as to 56.5/43.5 per cent in the husband’s favour with adjustments made for any outstanding rates or other charges which the husband is responsible for and the other items they have each retained.

8. Finally there was a motorcycle 1 which was to be sold and I propose to make orders for its sale and the division of the net proceeds of sale on a 56.5/43.5 per cent basis.  

I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Macmillan delivered on 17 December 2020.

Associate: 

Date:  17 December 2020