Manners and Manners
[2009] FMCAfam 1338
•16 December 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MANNERS & MANNERS | [2009] FMCAfam 1338 |
| FAMILY LAW – Whether land in Thailand should be treated as belonging solely to wife – whether just and equitable for wife to receive interest in land in Thailand. |
| Family Law Act 1975 (Cth), ss.75(2), 79, 89 |
| Hickey [2003] FLC 93-143 C v C [2005] FLC 93-220 |
| Applicant: | MS MANNERS |
| Respondent: | MR MANNERS |
| File Number: | MLC 3703 of 2008 |
| Judgment of: | Phipps FM |
| Hearing dates: | 18 & 19 May 2009 |
| Date of Last Submission: | 19 May 2009 |
| Delivered at: | Melbourne |
| Delivered on: | 16 December 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr McFarlane |
| Solicitors for the Applicant: | Jane Baldwin |
| Counsel for the Respondent: | Mr Eidelsen |
| Solicitors for the Respondent: | David Wilkinson & Co |
ORDERS
The husband pay the wife the sum of $138,390 (the amount) on or before 29 January 2010 (the date).
Upon the husband paying the wife the amount on or before the date the wife transfer to the husband all her right title and interest in the property situate and known as Property P Victoria (the property).
If the husband does not pay the wife the amount on or before the date the property be sold in a manner and for a price agreed and if not agreed by an agent and in a manner nominated by the President for the time being of the Real Estate Institute of Victoria or his or her nominee and the proceeds applied:
(a)First in payment of the costs and expenses of the sale;
(b)Second to discharge the mortgage and other encumbrances on the property including all rates and taxes;
(c)Third in payment of the amount to the wife;
(d)Last by payment of the balance to the husband.
The wife retain for her benefit alone any interest in land located on Property S within, Thailand being registered land plot (1) and registered land plot (2).
Otherwise each party is declared to have no interest in property now in the possession or name of the other party.
Within 28 days the solicitors for the wife submit:
(a)Minutes of orders so that there is a splitting order of the husband’s superannuation in favour of the wife using a base amount of $20,000 and an operative date seven days after service on the trustee of the order;
(b)Evidence that the trustee of the husband’s superannuation fund has been given procedural fairness.
The application be adjourned to a date to be fixed for the making of the superannuation splitting order without any further oral hearing.
IT IS NOTED that publication of this judgment under the pseudonym Manners & Manners is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 3703 of 2008
| MS MANNERS |
Applicant
And
| MR MANNERS |
Respondent
REASONS FOR JUDGMENT
Introduction
The husband and wife have reached agreement on arrangements for their children, but disagree about the disposition of property.
The issues are:
a)What should be the percentage distribution of the assets?
b)Should the wife retain ownership of the land in Thailand?
The issues must be placed in the context of the four step property consideration process.[1] The steps are:
What are the assets and liabilities?
What are the parties’ contributions?
What are the parties future needs?
Is the order just and equitable?
[1] Hickey [2003] FLC 93-143. For superannuation C v C [2005] FLC 93-220
Background
The wife was born in Thailand [in] 1969. She is 40. She came to Australia in 1993 and is now an Australian citizen. The husband was born in Australia [in] 1956. He is 53 years.
The parties met in Thailand in 1991 and commenced a relationship. They married in Thailand [in] 1993 and moved to Australia. There are three children of the marriage, [X] born [in] 1992 in Thailand, [Y] born [in] 1994 in Australia and [Z] born [in] 1998 in Australia.
The parties separated under the one roof in December 2005. The wife moved out of the family home on 25 August 2006 taking [Z] with her. The two older children remained with their father.
[X] is 17 and moves between his parents’ homes. Consent orders of 19 May 2009 provide for [Y] who is now 15 to spend time with the husband on alternate weekends from Friday night to Sunday night and [Z] on alternate weekends from the conclusion school Friday until the start of school Monday and each alternate Wednesday from the conclusion of school until the start of school the next day. Both children spend time with their father during school holidays.
The husband moved to Thailand in 1989. He owned a property at Property M purchased in 1987 from the policies of a motor vehicle damages claim. He sold the property which was settled on the
19th November 1990. The net proceeds of the sale were $64,000. He sold a motor vehicle and household contents for $10,000.
He received a $35,000 loan from his mother of which he has repaid $3,900. The husband says on affidavit that whenever he spoke to his mother about the need to repay she became annoyed and refused to allow any repayment.
The husband says he believes that his mother has taken the balance of the $35,000 into account when making her will and expects to receive very little from the estate. The wife disputes that it was a loan.
The husband was a partner in a business "[G]” in Thailand when the parties commenced their relationship. When the lease came to an end he purchased a share in a [business] known as “[T]” using the proceeds of sale of the Property M property, his car and household contents, the money from his mother and $25,000 he had saved from earnings from "[G]”. He acquired the business about the time the relationship commenced and puts its value at that time at about $100,000.
The family moved to Australia in 1993. In 2001 they purchased the former matrimonial home at Property P Victoria for $156,000. They paid a deposit of $8,000 and borrowed the balance.
When they came to Australia the husband obtained employment, mostly factory work. The wife commenced working in 2002, working night shifts at [company omitted]. The husband says it was two to four nights a week and occasional weekend work. The wife claims she worked up to 14 hours a day. Since then both have been in employment.
The husband sold his share of “[T]” in 2003 for 3 million Baht, the equivalent of $100,000. The parties and the children travelled to Thailand partly for a holiday and partly to deal with the sale of the business. The wife says they spent $10,000-$15000 on travelling during the holiday. The husband says it was much less because they stayed in “[T]” for nothing and travelled by bus.
The proceeds of the sale were placed in the wife’s sister’s account. Some of the money was used to purchase two pieces of land in Thailand, one for 450,000 Baht, A$15,000, in the name of the wife and another for 1.25 million Baht, A$41,500, in the wife's sister’s name. The husband says the latter was done by the wife, he having little to do with it. The wife says it was done because she and the husband did not want to leave the money in the bank in Thailand as that was not particularly safe, so they decided to purchase land. Since the husband was not a Thai national he could not purchase land in his own name. According to the wife the second purchase was made in the sister’s name because they were returning to Australia and had to arrange the purchase quickly.
The wife’s says they brought back with them $10,000 when they returned to Australia. The husband says it was not as much as that. They were able to return $30,000 to Australia by paying the equivalent of that amount to the mother of a friend in Thailand and then her son, who was in Australia, payed them $30,000. That was paid off the mortgage.
The money paid for the land, $56,500, plus the $30,000 brought to Australia totals $86,500. The wife's evidence is that an additional $10,000 was brought back to Australia and the balance spent on the holiday. If this is correct it accounts for all the money.
The husband says that they paid for the holiday by purchasing air fares before they went and the rest by credit card. He denies that any of the sale proceeds of “[T]” were used for the holiday and denies the $10,000 was brought back to Australia. He asserts that the explanation for the discrepancy is that the wife's sister used it to pay or help pay for the construction of her house. The wife's sister has subsequently built a house on part of the land purchased in the name of the wife.
The husband's explanation of the manner in which travel and other expenses for the holiday were paid is the more probable. Air fares must be paid before travel, and so the parties had to pay for them before they left Australia. They could not have used proceeds from the sale of “[T]”.
The wife does not contradict the husband's evidence that they stayed with family and at “[T]”, and that they travelled by bus. Therefore, the husband’s explanation that the holiday was inexpensive is the more probable. They are unlikely to have spent the equivalent of $6,500 while in Indonesia which is what must have happened if the wife's explanation is correct.
What are the assets and liabilities?
Property P $330,000
Wives motor vehicle $5,000
Husband's motor vehicle $500
Land in Thailand wife’s valuation $54,774
husband’s valuation $120,000
Husband superannuation $58,570
Wife’s superannuation $18,500
Total Assets wife’s Thailand valuation $467,344
Total Assets husband’s Thailand valuation $532,570
Liabilities
Mortgage $60,000
Net Assets wife’s Thailand valuation $416,524
Nett Assets husband’s Thailand valuation $472,570
The land in Thailand was valued by Ms V of Knight Frank (Thailand) Company Limited. This was a valuation on behalf of both parties carried out pursuant to the order of 7 November 2008. The total valuation is 2,691,275 Baht. According to the wife that is A$109,549. Valuation of half of the land is $54,774. The husband's valuation of $121,000, given above, is taken from his outline of case document. Possibly it uses a different exchange-rate.
The land in Thailand is in two parcels. One of the parcels of land is in the name of the wife and the other in the name of her sister. The husband says he knew little of the purchase. The wife says the second parcel of land was purchased in her sister's name because it had to be done in a hurry because the parties were leaving Thailand for Melbourne and there was no time to purchase in her name.
The wife's sister built a house on the land in the wife's name. The wife says that she and the husband had a dispute with the sister and eventually she and the husband agreed to settle the dispute with the sister on the basis that the sister maintained a half share in the land which now has a house on it and the husband and wife a half share in the land which is in the sister’s name. The wife said they felt they had no choice about it because she already had built a house on it.
The husband says he had no knowledge of this, in particular that the wife arranged with her sister to use money from the sale of “[T]” to buy land in the sister’s own name. The husband's case is that the wife and her sister entered into an arrangement which meant that $70,000 of the proceeds of sale of “[T]” remained in Thailand for the benefit of the wife and her sister. His case is that the balance of the $70,000 after purchase of the land must have been used by the wife's sister for the erection of the house. Accordingly his case is that the land in Thailand should be quarantined from the Family Law Property settlement process and treated as an asset of the wife.
According to the wife only Thai nationals can own land in Thailand. The husband accepts this is correct. The wife says that large sums of money cannot be taken out of Thailand. There is no evidence to contradict this. Consequently, I consider that, even if the land could be sold, the evidence is the money cannot be returned to Australia, so neither party can use in Australia the benefit of the land in Thailand.
The husband agreed, or at least acquiesced, to the money going into the wife's sister’s account. He says he did not agree to it being used for the purchase of land in the sister’s name. Consequently, the parties always needed the sister’s cooperation to obtain the money. Common experience suggests that selling land rather than accessing a bank account will be more difficult without the sister’s cooperation, but that may be a wrong assumption so far as the land in Thailand is concerned.
The wife says that the agreement with her sister means that the parties can sell half the land in her name and half the land in her sister's name. The wife says that under Thai law the house belongs to her sister, so that it is the other half of that land which must be sold. I consider the best I can do is proceed on the basis that what the wife says is correct, and there is some prospect of recovering the value of half both pieces of land.
I do not consider that the evidence shows that the husband necessarily has been disadvantaged even if there was a deliberate scheme by the wife and her sister to transfer the money away from the husband. He knew of the purchase of the first piece of land in the wife's name. According to the wife the value of the parties’ share in both properties is now $54,774. The land has increased in value. If the money had remained in the sister's bank account, and she withdrew it and would not disclose its whereabouts or use, the money could not be recovered. The husband would have no cause for complaint so far is the wife is concerned because the money was in the sister's bank account with his concurrence.
In all the circumstances I consider that the proper approach is to treat an interest in half of the land in Thailand as described by the wife as an asset for the purpose of the first two steps of the four step process and then deal with any consequences under the third and fourth steps.
The husband's mother has never called in the balance of the loan of $35,000, even if it was a loan. The husband has remained living in the matrimonial home undertaking his share of the care of the children and paying the mortgage. Unless he borrows he does not have the capacity to repay the loan to his mother, and will not have that capacity in the future.
The money was given to the husband twenty years ago. His mother is unlikely to require payment. I do not consider that it is a current debt. The probable explanation is the one given by the husband in his affidavit, that is that his mother has taken it into account in her will. This means it is in the nature of a gift in lieu of an inheritance, and so not a debt for the purpose of determining the parties’ assets and liabilities.
Proposals
The wife’s proposal is for orders that:
a)The parties do all things necessary to sell the Thai properties and the net proceeds be divided equally;
b)The husbands superannuation be subject to a splitting order so that the superannuation is divided equally between the parties;
c)The remaining assets be divided 60% to the wife and 40% to the husband.
The husband's proposal is for orders that:
a)The husband retain the former matrimonial home at Property P, Victoria;
b)The wife retain ownership of the Thailand properties;
c)The husband pay the wife the sum of $43,000;
d)Each party retain their respective superannuation entitlements;
e)Each party retain their motor vehicle.
What are the parties’ contributions?
When the parties commenced cohabitation in 1991 the husband had his interest in “[T]”. The wife had no assets. The husband values his interest in “[T]” at that time at $100,000, the same as the sale price in 2003. A reasonable inference is that it had the same value at the time the parties commenced their relationship.
The party's first child was born [in] 1992, soon after the commencement of the relationship. They married [in] 1993 and moved to Melbourne in November 1993.
The husband commenced employment in Australia immediately. The wife commenced employment in 2002 when the youngest child was four years old.
The husband has made the greater financial contribution throughout the relationship. This is balanced by the wife's role in caring for the children and the homemaker role. Contributions during the relationship are equal.
Since separation the husband has remained in the matrimonial home and paid the mortgage. The wife has rented a residence. They have shared the care of the children although the two older children, the boys, have spent a greater amount of the time with the husband. Notwithstanding this, I consider the post separation contributions are equal.
The major matrimonial assets, the former matrimonial home, was purchased for $156,000 and is now worth $330,000. The parties paid a deposit of $8,000. The mortgage was reduced by $30,000 in 2003 with money from the sale of “[T]”. The mortgage is now $60,000.
The relationship lasted for about 15 years. The effect of the husband's initial contribution has been reduced or eroded by the length of time of the relationship, but not entirely. Taking this into account, I consider that the contributions are 55% by the husband and 45% by the wife.
The overall division is 60% to the wife of 40% to the husband.
What are the parties future needs?
The relevant s.75(2) matters are these:
The age and state of health of each of the parties
The wife is a 48 and the husband 53. Both are in good health.
Income property and capacity for employment
Both husband and wife have capacity for employment. The husband earns a little over $1,000 per week as a [omitted]. The wife is employed as a [omitted]. Her employment is casual. Earlier this year she was earning about $125 per week. At the time of the hearing she was receiving $200 net per week. I consider that the husband has a greater capacity for earning income.
The husband will retain the former matrimonial home, unless he is unable to raise the funds to pay the wife, in which case the house will be sold. The wife will have the interest in the Thailand properties. My reasons for ordering this are set out under the consideration of what is just and equitable. The wife may or may not be able to obtain the benefit of the interest in the Thailand property. I take that into account either under the consideration of the property she owns or as something which is a fact or circumstance to take into account pursuant to s.75(2)(o).
Care of children
The wife has the greater care of the two younger children. The youngest child will turn 18 in 2016.
Commitments for support and standard of living.
The parties have normal commitments to support themselves and maintain a standard of living similar to that which they had prior to the separation.
Child-support
According to the parties financial statements no child support is payed. The wife receives a majority of the family tax benefit.
Taking all these matters into account I consider that there should be an adjustment in favour of the wife of 15%
Is the order just and equitable?
The wife says she has an agreement with her sister that the parties own one half of each Thailand property and the wife’s sister the other half. The husband disputes this. The wife's proposal is that there be an order that each party do all things necessary to sell the interest in the Thailand property. This order was made on an earlier occasion, but the parties’ interest in the properties has not been sold. A further order is likely to have the same fate. This means that they would continue for an uncertain time into the future as co-owners of property in accordance with an order made under s.79 of the Family Law Act 1975 (Cth).
Section 89 of the act requires the court, as far as practicable, to make such orders as will finally determine the financial relationships between the parties and avoid further proceedings between them. The order proposed by the wife is unlikely to meet this requirement. The just and equal way to resolve this dilemma is to order that the wife retain sole interest in the Thailand properties and take into account, as I have, under the s.79(2) considerations that she may have difficulty recovering the value of the land, and if she does, bringing the money to Australia. The wife says she and her sister do not now get on. Nonetheless, the wife has a better chance of obtaining benefit from the land in Thailand than the husband.
For superannuation the wife proposes a splitting order so that superannuation is equal. The husband proposes that each retain their own superannuation benefits and the adjustment be made in the cash payment he makes to the wife. This is in the context of his proposal that he pay the wife a relatively small cash amount.
The husband must make a substantial payment to the wife if he wishes to retain the matrimonial home. Including in that a cash amount to the wife instead of superannuation spitting would not be just and equitable. The parties’ superannuation has accrued during the relationship in Australia. Their contributions are equal and none of the s.79(2) matters will apply when they receive payment. I do not have details of the trustee, nor evidence of procedural fairness to the trustee. Therefore I will make orders for submission of minutes of orders and evidence of procedural fairness to the trustee.
Distribution of assets
Asset Wife Husband
Property P $270,000
Wife’s motor vehicle $5,000
Husband's motor vehicle $500
Land in Thailand $54,774
Payment $138,390
Total superannuation is $77,070. Equal division requires a splitting order of the husband's superannuation in favour of the wife with a base amount of $20,000.
I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of Phipps FM
Associate: Jan Smith
Date: 16 December 2009
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