Maina and Maina

FEDERAL CIRCUIT COURT OF AUSTRALIA

MAINA & MAINA

[2019] FCCA 2677

Catchwords:
FAMILY LAW – Property – where purchase price of former matrimonial home provided by husband’s parents – where presumption of advancement rebutted – where provision of purchase price may have been for an illegal purpose related to the First Home Buyers Grant – where husband’s parents did not seek joinder or declaration of resulting trust – where property treated as owned by the husband and financial contribution as made by him.

Legislation:

Family Law Act 1975 (Cth).

Cases cited:

Nelson v Nelson (1995) 184 CLR 538

Applicant:

MS MAINA

Respondent:

MR MAINA

File Number:

ADC 1463 of 2017

Judgment of:

Judge Young

Hearing date:

15 May 2019

Date of Last Submission:

15 May 2019

Delivered at:

Darwin

Delivered on:

20 September 2019

REPRESENTATION

Counsel for the Applicant:

Mr Roberts

Solicitors for the Applicant:

Adelaide Family Lawyers

Counsel for the Respondent:

Mr Lewis

Solicitors for the Respondent:

Rudall & Rudall

ORDERS

The wife is to provide draft orders within 14 days reflecting the reasons for judgment.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DARWIN

ADC 1463 of 2017

MS MAINA

Applicant

And

MR MAINA

Respondent

REASONS FOR JUDGMENT

This is an application for alteration of property interests. The applicant wife is 30 years old and the respondent husband is 32 years old. They have two children who are aged nine years and eight years.
The parties began to live together in March 2008, married in 2012 and separated in June 2015. Children's issues have been resolved. The children live with the mother and spend four nights a fortnight and approximately half of the school holidays with the father.
At the time of trial the father's arrears of child support stood at $7,075.
The father is a tradesman but is currently employed as a technician and earns about $75,000 a year. The wife is employed as a part-time technician and earns about $26,000 a year.
The primary dispute between the parties concerned the treatment of the proceeds of sale of the former matrimonial home. These stood at $286,229 at the time of trial and have been deposited in a solicitor’s trust account by agreement. An amount of $10,000 has already been paid to the wife as a partial property settlement.
The former matrimonial home was purchased in 2007 before the parties began to live together. It was not in dispute that the money for the purchase of the former matrimonial home at Property B (“the property”) in 2007 was provided by the husband’s family. The amount advanced was $283,291, made up of a deposit of $27,100 and a payment at settlement of $256,191.
The wife argued that the property had been purchased with funds from the husband's family and gifted to him at the time of purchase. The husband's position was that the money used to purchase the property was advanced to him as a loan. The husband said he owed this amount to his parents or the family trust. He said that after allowing for a set-off of a distribution owed to him by the family trust of $30,221 he owed $253,070 to his parents. He said this amount should be repaid from the proceeds of sale.
The other components of the asset pool and liabilities were agreed.
It was not in question that the resolution of the dispute was to be determined by an assessment of the intention, objectively ascertained, of the relevant parties at the time of the transaction. I found the evidence of the husband and wife about the question of limited assistance. There were no contemporaneous documents which could be considered determinative of the issue. However, there are a number of contemporaneous documents or documents produced before the dispute which shed some light on the relevant intention.
Among the documents that I have found of assistance are as follows:
a)On … 2007 the husband's father, Mr R Maina, signed a contract of sale for the property which was sold at auction by the Sheriff of South Australia pursuant to a warrant of sale.
b)Mr R Maina's trial affidavit annexed a copy of a page of a cash book for the company, Company C, which showed the payment of the deposit of $27,100 to the trust account of the real estate agent conducting the auction. His trial affidavit also annexed a later page from the same cashbook showing a payment of $256,191.74, which was the balance of the purchase price. The entry under the heading “Particulars" provides the address of the property and goes on to say "Bank cheque – [omitted] loan acc." The amount was apparently paid to a conveyancer, described as “Conveyancer D”. As Mr R Maina was a director of Company C at the time, along with his former wife Ms C Maina, I infer that the reference in the particulars probably indicates that the amount advanced was treated as a debit to Mr R Maina's director’s loan account.
Company C was wholly owned by Maina Pty Ltd, which was the trustee of the Maina family trust.
It is not in dispute that the property was transferred, pursuant to a nominee clause in the contract of sale, to the husband, Mr Maina, at settlement in about March 2007. The husband now appears as the sole owner of the property and there is no encumbrance registered on the title.
Another set of documents appearing in Mr R Maina's affidavit were schedules of insurance. It was not in dispute that at all material times Mr R Maina paid the insurance on the property and was recorded as “the insured” in respect of the property.
Also annexed to Mr R Maina's affidavit were valuation documents relating to a valuation of the property, conducted on 13 October 2014. It was not in dispute that the valuation of the former matrimonial home was undertaken at the request of the husband's father, Mr R Maina and his mother, Ms C Maina, as part of his parents’ matrimonial property proceedings. His parents had separated in 2013.
Property B was valued by the same valuer and at about the same time as eight other properties owned or part-owned by Mr R and Ms C Maina senior or their associated entities. Property B appears to have been added subsequently to the list of properties to be valued in a handwritten note signed by Mr R Maina. In the note to the valuer he wrote "please add my son [Mr Maina] house at [Property B] (sic) to the list of properties". In evidence, Ms C Maina said that it was at her suggestion that this property was added to the list of properties to be valued in the matrimonial property proceedings between herself and Mr R Maina.
Another document of more questionable relevance is a document headed "loan acknowledgement" dated 14 October 2016. This document was signed by Mr Maina and purported to acknowledge his indebtedness in the sum of $283,291.74 to Maina Pty Ltd as the trustee for the Maina family trust. He undertook to repay the amount advanced within 60 days of receiving written notice. A written "notice of demand" signed by Mr R Maina as director of Maina Pty Ltd was sent to Mr Maina on 27 July 2018.
It is to be noted that the "loan acknowledgement" document was signed by the husband about 16 months after his separation from the wife and five months before she commenced these proceedings.
Another relevant document is a consent order made in this court on 28 February 2018 in proceedings between Ms C Maina and Mr R Maina, the husband's parents. Relevantly, it contained the following clause:
Loan from Mr Maina
1.12The net sum (after payment of any costs or recovery expenses) of $253,070 due from the parties’ son Mr Maina shall be divided equally between the parties upon payment of the funds by Mr Maina to the parties and the husband shall take all steps required to issue a Notice of Demand in respect of the loan to Mr Maina, either in the capacity of Director of Company C or Director of Maina and to the extent that it is required, the wife shall authorise by the terms of this order the said Notice of Demand to issue.
That consent order was made almost a year after the present proceedings between the husband and wife began and about three months before the matter was set down for trial, initially, on 14 May 2018. The wife first made her claim that the Property B property had been given to the husband as a gift in her affidavit in support filed on 13 April 2017. The husband first made the claim that the sum advanced for the purchase of the property was by way of a loan from the family trust in his affidavit filed on 29 May 2017. I am satisfied that at the time of the consent order between Mr R Maina and Ms C Maina that both were aware that the nature of the sum advanced for the purchase of the property was in issue between their son and his wife in these proceedings. The wife was not a party to the consent order and there is no evidence that she was even aware of it. The order does not bind the wife by way of an estoppel or in any other way. It was not argued otherwise. In my view the order is of no significance in these proceedings.
As noted, Property B was purchased before the husband and the wife began their relationship. The wife gave evidence that the husband had "always" told her that the property was a gift from the husband’s parents and she said that she "never heard" the husband or his father make any comment or statement about the home in any other terms. She denied that she had ever heard any discussion of a loan arrangement in respect of the property or discussion of expectation of repayment.
She said she became aware part way through the marriage that the husband's father was paying the insurance on the home. She said she thought nothing of this other than it was the act of a generous parent or grandparent. It was implied she did not become aware of that claim until the proceedings commenced.
The wife's evidence was contradicted on a number of points by the evidence of the husband, the evidence of Ms C Maina and the evidence of Mr R Maina. The husband said that he had mentioned to the wife on a number of occasions that he felt guilty about not repaying his parents’ "loan" in respect of the house. I have reservations about the reliability of Mr Maina's evidence and I am not satisfied that such conversations took place.
Ms C Maina alleged that the wife knew that the property was not a gift and became aware of that fact, if she was not already aware of it, when it was valued in 2014 by the valuer commissioned by her and Mr R Maina for the purpose of their own property proceedings. Ms C Maina asserted that the wife was present when the valuer undertook his valuation at the property. The wife denied this. Ms C Maina said that she had keys to the property because she often looked after the parties’ two children and could come and go at the house as she wished so it would have been possible for her to enter the house without the wife being present. I have reservations about the reliability of Ms C Maina's evidence and I am unable to find whether or not the wife was present when the valuation took place.
Mr R Maina gave evidence that he told the husband and the wife that Property B would need to be valued to determine what "our asset pool was". This was a reference to the property proceedings between him and Ms C Maina. This was presumably around the time of the valuation of the property. I generally accept that the oral evidence of Mr R Maina was honest and reasonably reliable, although I take a somewhat different view of parts of his trial affidavit. I consider that it was probable that the wife was told that the property was being valued for the purpose of the proceedings between Mr R Maina and Ms C Maina. Whether she was aware of the significance of this I cannot say but I would have expected this news to alert her to the fact that the purchase of the property might not have been seen as a gift to the husband, at least by Mr R and Ms C Maina.
The evidence of the husband and his mother, Ms C Maina, was closely aligned. Essentially, both agreed that the original intention was to purchase the property on behalf of the family trust and that the decision to purchase the property was largely taken by Mr R Maina who had first noticed the property, had attended the open inspection alone and had signed the contract at auction. Both Ms C Maina and the husband agreed that the decision to transfer the property to the husband at settlement was only made after Ms C Maina’s sister, a Ms E, who was also the bookkeeper for the family business, suggested that, if the property was transferred to Mr Maina, the First Home Buyers Grant would be available to him. It was said that about that time the grant was around $7,000. The husband said that there was then a family conference involving Mr R Maina, Ms C Maina and himself where there was "a specific agreement that these funds were loaned to me and that the funds would be repayable when I was able to do so, or if I sold [Property B]".
This was supported in the trial affidavit of Mr R Maina. He said, after describing the suggestion by Ms E that the property be placed in Mr Maina's name in order to claim the First Home Buyers Grant:
[Ms C Maina] and I further discussed this and we decided that to facilitate [Mr Maina] receiving the First Home Buyers Grant the property could be purchased in his name. We discussed with [Mr Maina] that although the property would be registered in his name, that we expected that the amount provided for the purchase of the property would need to be repaid at some time when he was able. [Mr Maina] agreed to this. We had no intention of charging interest on the loan amount and hoped to be able to do something similar for our other children in the future.
In cross-examination by counsel for the mother Mr R Maina's evidence painted a different picture (at page 65 to 67 of the transcript):
Why was it that you were concerned to buy or assist [Mr Maina] with the purchase of this property rather than your other children?‑‑‑The property wasn’t bought with the intention of for [Mr Maina]; the property was bought for the family trust. We – we had money in the bank account, and I thought it would be a good investment at the time, and, at the time, [Mr Maina] was living with a couple of mates, and I was trying – after purchasing that, I thought it would be wise to get him away from the environment he was in. That’s – that’s – that’s where it came from.
So you had this discussion with [Mr Maina], and – about whether he would live there?‑‑‑Mmm.
And when you went to the auction, had you had a discussion with him about buying it in his name or in the family trust name or anything?‑‑‑It – it was always – the intent was always in the family trust’s name. That’s – the contract was signed by myself for [Maina Pty Ltd].
Right. So up until the auction, there had been no discussion with him about he was going to borrow money from you or you were going to give him money or anything like that?‑‑‑No.
Not at all?‑‑‑It – the – [Mr Maina] – [Mr Maina]’s name came into it after the auction.
So even at the auction, there was no discussion about, “We will loan you this money, [Mr Maina],” or anything like that?‑‑‑The – the intent was always that that property was to be purchased by the family trust.
Right. Now, when do you say that that intent changed?‑‑‑When my bookkeeper of the day informed me if it was put in [Mr Maina]’s name, he could then claim the first home loan grant.
And thus pass on a benefit?‑‑‑He – he could gain the benefit of it, being his – his first purchase.
Right. So this isn’t at the auction at all; this happened some time later?‑‑‑It would have been between the auction and settlement.
Right. So might have been a week. Might have been 10 days. Whatever?‑‑‑Whatever, yes.
Right?‑‑‑Yes.
So it’s at that time that the discussion took place – the decision took place, rather, to put the property into [Mr Maina]’s name?‑‑‑Correct.
And who made that decision?‑‑‑Would have been myself in consultation with my wife. There – there wouldn’t have been a – a big discussion. It would have just been, “This can occur,” and ‑ ‑ ‑
So you were used to making these sorts of unilateral decisions; is that correct? You were the primary decision-maker?‑‑‑Yes, I – I would say so, yes.
Do you recall having a discussion with [Mr Maina] about him accessing the First Home Owner’s Grant and the like?‑‑‑It would have – as I say, it came from my bookkeeper, who is, in fact, [Mr Maina]’s aunty.
Was she at the auction?‑‑‑No.
Right?‑‑‑This – she – she – at the time, she worked in my office, and it was her that would have been organising the conveyances for the property and – somewhere between the auction and the settlement date, that would have come into it because ‑ ‑ ‑
Right. But when did the discussion take place between you and [Mr Maina]?‑‑‑Some time in between that time.
All right. Do you recall ‑ ‑ ‑?‑‑‑It – it – it was always going to be in the name of the trust.
But then it changed, did it not?‑‑‑Only on the title deed. The intent was that it would always come under the auspice of the family trust.
Right. But then – the point I’m trying to get to, [Mr R Maina], is at what point did you have a discussion with [Mr Maina] and say, “We’re going to put this in your name,” or words to that effect, “so that you can get the First Home Owner’s Grant”?‑‑‑Well, as I say, it would have been at some point between those dates I’ve mentioned. I can’t be any clearer than that.
Do you – you don’t recall where it took place?‑‑‑I just – I – I have no recollection of it.
Right. Did you have any discussions with him about, “If we do this, certain consequences would flow”?‑‑‑Basically, we would have had discussions ‑ ‑ ‑
No, did you have those discussions, not would have. Do you recall them?‑‑‑We – we had discussions that if – at some point in time, that – that property remained or belonged to the family trust, and I’m sure the discussion would have been along the lines – if anything happened to me, it would have been distributed through the family.
At page 68 of the transcript there is further cross-examination of Mr R Maina:
And you’re familiar with it’s important to have an appreciation of whose name properties are registered in and the like?‑‑‑If you’re hinting at the – because – the name on the – on the – the document is what the law says, well, I agree with that, but I have an – an agreement with [Mr Maina] that that’s not the case.
Well, we will get to that in a minute. But at the auction, you were familiar – sufficiently familiar to keep your options open to be able to sign a contract, “[Mr R Maina]and/or nominee”?‑‑‑Correct, or [Maina Pty Ltd] in that – in that point.
“And/or nominee”. Because you were able to transfer the benefit of that contract to [Mr Maina], weren’t you, and then settle on it?‑‑‑Yes. Yes.
Right. And then when you – when it settled in [Mr Maina]s name, he was the legal owner of it. You realise that?‑‑‑He – he would be the legal owner of the property, but he still owed us the value of the property.
Right. So you say you had an agreement, and you say that at some time between the day of the auction and settlement, there was an agreement that the property would go into [Mr Maina]’s name?‑‑‑Correct.
Now, is this agreement documented in writing anywhere?‑‑‑It’s just a verbal contract.
Right. So verbal contract. What would you tell the court that you believe are the terms of it?‑‑‑Basically, the – the basis of that contract would – would have been if we were in need of the money, [Mr Maina] would then have to sell the property and repay us. If something happened to me, then [Mr Maina] would have to equalise the property with his mother and brothers and sister.
Was anyone else present when this discussion took place?‑‑‑No, it would have just been [Mr Maina] and I.
HIS HONOUR: Sorry. I beg your pardon? Just [Mr Maina] and ‑ ‑ ‑?‑‑‑Would have just been [Mr Maina] and I.
Just you and [Mr Maina] ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ had this discussion about ‑ ‑ ‑?‑‑‑And – and it wouldn’t have come out as a sit down, this is the way it’s going to be; it would have just – it would just been general conversation to make him aware of what the expectations were.
Now, was there any discussion at that time with respect to paying you back over a period of time?‑‑‑No.
So there was no interim payments that you say?‑‑‑It – it would have – would have been on – as I said, on a needs basis. If we needed the – the cash, if something went astray somewhere else in the business and that’s what needed to occur, then – if the sale of that property need to occur to prop up the business or make some payments for whatever reason, that would have been a reason for that.

While part of this passage of evidence where Mr R Maina said “he still owed us the value of the property” might be considered as consistent with a loan I consider that remark was against the grain of the majority of his evidence. If any doubt remained this was clarified by Mr R Maina’s answers to some questions from the bench (at page 71 of the transcript):
So that was the motivation for transferring to [Mr Maina], was it – to take advantage of the First Home Owners’ Grant?‑‑‑Yes, for [Mr Maina] to gain the benefit of that.
Okay. So you’re saying that it was always understood that – you say that the property was really held for the benefit of the trust, that is ‑ ‑ ‑?‑‑‑Correct.
‑ ‑ ‑ the family?‑‑‑Yes.
‑ ‑ ‑ and that, because he’s your son, you thought he would do the right thing if he was called on to do it?‑‑‑I don’t think. I know he would do the right thing.
You know he would do the right thing?‑‑‑I know he would do the right thing.
Yes. So, that being the case, there would never be any need for a discussion of repayment of the loan, because there never was a loan?‑‑‑Correct.
Would you agree with that?‑‑‑Yes.
The evidence above indicates clearly that there was no “specific agreement” of the kind claimed by the husband and Ms C Maina and I do not accept that any such agreement existed. I am also satisfied that the affidavit evidence of Mr R Maina, to the extent that it is inconsistent with his oral evidence above, must be rejected. Mr R Maina's oral evidence had a ring of truth about it and I assessed his oral evidence recorded above as truthful and reliable, notwithstanding that something rather different had been conveyed by his affidavit evidence.
I also reject the “loan acknowledgment” as evidence of a loan. Mr R Maina described the document in cross-examination as follows: “I don’t think that document is worth a cracker…”. Mr R Maina said that it was prepared on the advice of lawyers. I am satisfied the document was prepared to bolster the loan claim and nothing more.
I am not satisfied that there was a specific agreement for a loan of the kind referred to by the husband and his mother. I am satisfied there was in fact no specific agreement of the kind claimed by the husband. Although I accept that each of the wife, the husband and Ms C Maina were not being deliberately untruthful, I am satisfied that their evidence about events which had taken place some 10 years before was a reconstruction. Similarly, I do not accept the wife's vague assertions about the husband describing the purchase of the property is a gift. As noted, I accept Mr R Maina as an honest witness and his oral evidence is inconsistent with the existence of a loan agreement.
I am also satisfied that there was no intention to make a gift of the property or of the purchase price to the husband. In my view the transaction was a family transaction and it was not thought necessary to be specific about the nature of the transaction. That much is evident from Mr R Maina's evidence. However, objectively, my interpretation of the material, supported by the oral evidence of Mr R Maina, is that the intention in transferring the property to the husband was that it was held for the benefit of the family or as part of the family trust. It is somewhat unclear precisely who should be seen as having advanced the money. In the first instance, it appears to have been advanced to Mr R Maina by Company C and entered in that company's books as an advance to Mr R Maina and recorded as a debit to Mr R Maina's director’s loan account.
There were no documents produced which recorded the advance as a loan to Mr Maina. Although no record of distributions to the beneficiaries of the family trust, which included Mr Maina, was produced I am satisfied, in the light of the evidence of Mr R Maina, that any such record would not be likely to show Mr Maina as the beneficiary of a discretionary distribution of the purchase money.
I find that any presumption of advancement is rebutted by the evidence of Mr R Maina. Ordinarily, the provision of the purchase price by someone other than the legal owner creates a resulting trust in favour of the provider of the funds. The difficulty in this case is that, on the face of it, the acquisition of the property by the husband was intended to disguise the real transaction: an acquisition on behalf of the family trust, or an entity associated with it, in the husband’s name in order to obtain the First Home Buyers Grant. Although there was no evidence on the point, that may have constituted a fraud on the Commonwealth or otherwise been illegal. The parties did not make any detailed submissions about this matter, perhaps not surprisingly as it was a situation inconsistent with both cases.
The court raised with Mr R Maina the question of whether the trustee company, of which he is a director, or he or any other entity wished to join the proceeding in order to prosecute a claim that the property was held beneficially by someone other than the legal owner, the husband. Mr R Maina said he did not. He also told me that Company C, the company that actually advanced the money, had been deregistered.
Had such a claim been advanced on behalf of the family trust or Mr R Maina then the issues raised by the High Court in Nelson v Nelson (1995) 184 CLR 538 would have needed to be addressed. That was a case where a property was registered in the names of a son and daughter but the purchase price had been paid by the mother. It was held that the purpose of the transaction was to enable the mother, if she wished, to subsequently purchase another house with the benefit of a subsidy under the Defence Service Homes Act. She made a false declaration. The majority of the court held that the illegal purpose which had been furthered by the transfer meant that the any declaration of the mother's beneficial interest would be subject to a requirement that she be denied the benefit obtained by her unlawful conduct.
It is not necessary to resolve those questions in this case because Mr R Maina has chosen not to prosecute a claim that the property is held on a resulting trust. He did not explain his reasons for adopting this course but that course may have avoided the need to repay the amount of the grant and avoided any associated difficulties if a false declaration had been made. I make no finding about whether such a declaration may have been made. Of course, there may have been other reasons for the course he adopted.
Mr Lewis, counsel for the husband, suggested in closing submissions that the provider of the funds ought to be joined in the proceeding, presumably with a view to seeking a declaration of resulting trust. That was a very late stage for the husband to make such a suggestion and in view of the lack of interest of Mr R Maina who, either as a director of the trustee company or as the provider of the funds himself, was the person who would need to prosecute such a claim I decided it was neither just nor necessary to adopt such a course.
Consequently it is not necessary that this court make any finding about whether the property or the funds derived from the sale of the property are subject to a resulting trust. I am satisfied that there was no loan and I am satisfied that the property was not a gift. Further, in view of the course adopted by Mr R Maina, I am satisfied I do not need to look behind the legal ownership of the property by Mr Maina. However, the reality is that whatever legal interpretation might be adopted it is clear that the financial contribution to the purchase of the property was made by the husband's parents or entities associated with the husband's parents and this should be seen as a contribution by the husband.
The other items in the pool were agreed by the parties. I find the property pool is as follows:

Description	Wife	Husband	Total
Assets
1	Proceeds of sale of former matrimonial home	$286,229
2	Partial property settlement paid to wife	$10,000
3	Wife’s jewellery	$800
4	Proceeds of sale of husband’s vehicle s	$25,207
5	Plant and equipment	$1,500
6	Distribution owing to husband from family trust	$30,221
Total assets	$10,800	$343,157	$353,957
Liabilities
7	Money owed by husband to Ms F	$960
Net assets	$10,800	$342,197	$352,997
Superannuation
9	Wife’s Superannuation	$17,000 (est)
10	Husband’s Superannuation	$18,900
Total Superannuation	$17,000	$18,900	$35,900

Contributions

In addition to the financial contribution to the former matrimonial home some other issues were agitated in relation to contribution. The husband operated a joinery business throughout the marriage. He was provided with rent-free premises by his father or associated entities. It was unclear what the value of this benefit was through the years of the marriage. There was no expert evidence although the husband claimed it was $30,000 to $40,000 a year. An issue raised by the wife was the allegation that the husband at around the time of separation in 2015 or 2016 had caused serious damage to the former matrimonial home while under the influence of methamphetamine. The husband admitted doing some damage in the circumstances. Although he was non-specific the mother's evidence also lacked specificity. Her approach rested on the valuation of the property obtained by the parents in October 2014 at $330,000, the actual sale price in June 2018 of $308,000 and a hearsay assertion that the property had "recently" sold for $450,000. I was asked to accept that these figures indicated the value of the damage caused by the husband. In my view, there are other possible explanations, including fluctuation in property values over time. There was also no expert evidence about the specific nature of the damage or the cost of repairing it or how it might have affected the sale price of the property. I am unable to make any finding specific finding on this issue, although I accept that the husband caused some damage to the former matrimonial home while under the influence of illicit drugs.
The father's trial affidavit, which was originally intended to address parenting issues as well, annexed a report dealing with the husband's drug use. The report records the husband as saying "that for about eight years he ‘gave up drugs’ for the mother and that he also ‘gave up’ his circle of friends, under pressure from the mother”. The report recorded that from March 2016 the husband “said that his drug use (methamphetamine/‘ice’) escalated from what he estimated to be a once a month use to what he described as ‘the more serious end’ of drug use, that is about 1.5 g per week or about $400 a week through September and October 2016”. The husband also said that his business failed in early 2017, leaving “significant debts” although there was no detail about them and they appear to have been cleared by the time of trial. He claimed that he was earning $50-$60,000 a year running the joinery business during the marriage. The husband's trial affidavit did not directly address the question of whether or not he used drugs during the marriage, and what his expenditure on drugs, if any, may have been.
The wife appears to have worked throughout the marriage, other than time away from work when the children were born. Apart from the provision of a house for the parties I am left with some reservations about the extent of the financial and non-financial contributions by the husband. I take into account not only the period of the marriage but also the period after the marriage when he admitted to serious use of methamphetamine, resulting, at one point, in his hospitalisation. I also take into account the fact that there is a significant child-support debt. This is relevant to the question of his post-separation contributions. I am satisfied that the non-financial contributions of the wife have significantly outweighed those of those of the husband.
Overall, I find that contributions were 70% by the husband and 30% by the wife.

Section 75(2) factors

The wife has the care of two relatively young children, one of whom requires additional care, including medical. The husband has employment skills and is employed as a technician earning $75,000 a year. The wife has fewer skills and is employed as a technician, apparently working part-time and earning $26,000 a year. I am satisfied the husband's earning capacity is considerably greater than the wife's.
Both parties appear to be in good health, although the husband suggested that he has some physical limitations. In the absence of medical evidence, I am not persuaded that those claims should be given weight. Overall, I find that there ought to be an adjustment in the wife's favour of $70,500 (of which $10,000 has been paid in part settlement) which represents an overall split of 50% to each party or an additional 20% of the non-superannuation pool to the wife.
Neither party sought a superannuation split.
This results in the following:

Description	Wife	Husband	Total
Assets
1	Proceeds of sale of former matrimonial home	$286,229
2	Partial property settlement paid to wife	$10,000
3	Wife’s jewellery	$800
4	Proceeds of sale of husband’s vehicle s	$25,207
5	Plant and equipment	$1,500
6	Distribution owing to husband from family trust	$30,221
Total assets	$10,800	$343,157	$353,957
Liabilities
7	Money owed by husband to Ms F	$960
Net assets	$10,800	$342,197	$352,997
Husband pays wife	$165,699	($165,699)
50%/50% (after rounding)	$176,499	$176,498	$352,997
Superannuation
9	Wife’s Superannuation	$17,000 (est)
10	Husband’s Superannuation	$18,900
Total Superannuation	$17,000	$18,900	$35,900

There will be an order that the sum of $165,699 be paid to the wife out of the funds representing the proceeds of sale of the former matrimonial home and the balance paid to the husband.
The wife is to provide draft orders within 14 days reflecting these reasons.

I certify that the preceding fifty one (51) paragraphs are a true copy of the reasons for judgment of Judge Young

Associate:

Date: 20 September 2019

[2019] FCCA 2677

20 September 2019

Key Legal Topics

Areas of Law

Family Law

Legal Concepts

Remedies