Manson and Manson
[2016] FCCA 3485
•9 September 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MANSON & MANSON | [2016] FCCA 3485 |
| Catchwords: FAMILY LAW – The use and keeping of firearms by a parent – general property proceedings – power of the Court to compel parties to expend monies on significant repair work to former matrimonial home. |
| Legislation: Family Law Act 1975 (Cth), ss.60CC, 75, 79, 106A, 117, Part VIII Firearms Act 1996 (NSW), ss.33, 40, 41, 42 |
| Cases cited: Bevan & Bevan [2013] fam CAFC 116 |
| Applicant: | MS MANSON |
| Respondent: | MR MANSON |
| File Number: | NCC 2114 of 2013 |
| Judgment of: | Judge Myers |
| Hearing dates: | 14 December 2015, 15 December 2015, 17 February 2016 and 18 February 2016 |
| Date of Last Submission: | 18 February 2016 |
| Delivered at: | Newcastle |
| Delivered on: | 9 September 2016 |
REPRESENTATION
| Solicitors for the Applicant: | Byrnes Lawyers |
| The Respondent appearing in person: | Mr Manson |
ORDERS
PARENTING
The father shall not keep upon his premises at which the children X born (omitted) 2006 and Y born (omitted) 2008 spend time, any firearm unless he holds a license entitling him to possess that firearm.
The father shall cause all firearms in his possession to be registered in accordance with the Firearms Act 1996 (NSW).
The father shall ensure that all firearms the father has in his possession at premises at which the children spend time shall be stored in accordance with sections 40 and 41 of the Firearms Act 1996 (NSW).
The father shall not remove from storage any firearm in the presence of the children other than as agreed between the parties in writing.
PROPERTY
Within 42 days the husband pay to the wife the sum of $267,363.52.
Simultaneously with the husband’s compliance with Order 5 above the wife do all acts and things and sign all documents necessary to transfer to the husband her right, title and interest in Property B.
The husband shall simultaneously with Orders 5 and 6 above refinance or pay out the mortgage over the Property B property so as to remove the wife as borrower or guarantor of the loan secured by way of mortgage over the said property.
Within 42 days the husband do all acts and things to list for sale his trailer and camping equipment for sale by auction on Ebay. The husband and wife shall be entitled to bid upon the said items. Upon the sale of the said items on Ebay the proceeds of the sale shall be divided 62% to the wife and 38% to the husband.
Should the husband fail to make payment to the wife in accordance with Order 5 above the parties shall be at liberty to relist the matter so that the Court can make Orders for the sale of the Property B property.
A base amount of $34,401.00 is allocated to the wife out of the husband’s interest in the Australian (omitted) Fund (“(omitted) Super fund”).
In accordance with section 90MT(1)(a) of the Family Law Act 1975:
The wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using the base amount referred to in Order 10 above; and
The husband’s entitlement (and the entitlement of such other person to whom splittable payments may be made) to payments out of the husband’s interest in the Australian (omitted) Fund, is correspondingly reduced.
Orders 10 to 12 of these orders have effect from the operative time and the operative time is 4 business days from the date of service of sealed orders on the trustee and the trustee shall be at liberty to apply to the Court in relation to these orders within that 4 day period.
The wife exercise a request pursuant to the Superannuation Industry (Supervision) Regulations 1994 for the rollover or transfer of the transferable benefits out of the husband’s interest in the Australian (omitted) Fund to a fund of the wife’s choosing.
Otherwise than as provided for in these Orders, each party shall be declared to be the sole beneficial order of all real property, monies in bank accounts, shares in public or private companies, superannuation, furniture and furnishings, motor vehicles and the like that stand in that party’s name or that are in that party’s possession as at the date of these Orders.
In the event that either party refuses or neglects to execute any deed or instrument that may be required to give effect to these Orders, the Registrar of the Court be appointed pursuant to s.106A of the Family Law Act 1975 to execute such deed or instrument in the name of such party or parties and do all acts necessary to give validity to the operation to the deed or instrument. The registrar be empowered to sign documents on behalf of either party to effect orders.
IT IS NOTED that publication of this judgment under the pseudonym Manson & Manson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT NEWCASTLE |
NCC 2114 of 2013
| MS MANSON |
Applicant
And
| MR MANSON |
Respondent
EX TEMPORE` REASONS FOR JUDGMENT
This is a final decision in parenting and property proceedings between the applicant mother, Ms Manson and respondent father, Mr Manson. By way of agreement reached between the parties at hearing, the parties have resolved all issues for determination between them relating to parental responsibility and as to living and spend time with arrangements for the parties’ children, namely, X, born (omitted) 2006 and Y, save and except for a single issue.
FIREARMS
The single remaining parenting issue relates to that of whether the court should or should not make an injunctive order preventing the father from storing firearms at his residence. The mother seeks the court make an order prohibiting the father storing firearms at his residence. The father asks the court to decline to make such an injunction. It must be pointed out that the mother makes no complaint that the children would be exposed to harm at the hands of the father deliberately, but rather, essentially, her complaint is one where she fears that the children might be harmed by a firearm in the father’s household as a result of negligence.
By way of background, it is an agreed fact in the proceedings that the father has held a firearms licence that had entitled him to possession of, and to shoot target pistols. The father gave evidence that he had previously had in his possession an air-powered pellet pistol and a .22 (omitted) target pistol. The father deposes at paragraph 111 of his affidavit filed 9 November 2015 that he has not owned a firearm since late 2011, but does intend to own firearms in the future. It is the father’s evidence that when the parties were together the mother had purchased him a membership to the local pistol club as a birthday present.
The mother deposes at paragraph 141 of her affidavit filed 30 November 2015 that prior to separation that was on or about 27 January 2012, X said to her words to the effect, “I have a secret.” The mother deposes that she responded, “What is it?” The mother gives evidence X then stated, “Papa was looking after us today. He was showing me how to use a gun. He didn’t know it was loaded and it went off in his hand. He shot a hole in the wall. He has fired it. He told me never to tell you.” The mother deposes that she was concerned by what she describes as “this revelation” and that the father had previously assured her that he would never expose the children to firearms. The mother suggests at paragraph 143 of her affidavit that the incident caused her great concern about the father’s ability to properly care for the children.
At paragraph 106 of the father’s affidavit he deposes that he was a licensed firearm owner and a licensed shooting range safety officer. The father refers to the mother’s allegations at paragraph 101 to 107 of his affidavit and suggests that what had taken place was something similar, but different to that described by the mother, whereby the father had noticed X had been pointing a toy gun at him. The father decided that he wanted to teach X about firearm safety. The father agreed during cross-examination he had shown X his air-powered pistol. The father deposes that he gave X a lesson on firearm safety and said to X words to the effect, “You must always treat a firearm as loaded and never point a gun at anybody.” The father goes on to depose at paragraph 108 of his affidavit:
I then used an air-powered pistol and discharged a felt pellet into a plaster wall. The pellet made a 3 millimetre dent in the plaster wall.
The father conceded during cross-examination the felt pellet had been inadvertently left in the pistol after cleaning, and that the pistol was designed to shoot metal pellets. In effect the father accidentally shot the felt cleaning pellet into the plasterboard wall. The father deposes at paragraph 109 of his affidavit that he did tell X not to tell the mother that he had been giving X lessons in firearm safety, saying, “Don’t tell mummy what I was telling you about firearms.” At paragraph 110 of the father’s affidavit he deposes that he requested X not to tell the mother about the lessons, as he was concerned the mother would make issue about his possession of firearms whenever the children were in his care. The father’s reasoning at paragraph 110 is somewhat flawed, in that it appears the incident had taken place prior to separation.
The question to be determined is whether the court should or should not make an injunctive order against the father as proposed by the mother. The possession and usage of firearms is regulated in New South Wales by the Firearms Act 1996. The Firearms Act 1996 describes a number of licence categories available to licence holders in New South Wales. Those categories are categories A, B, C, D, H and separate firearm collector and firearms dealers licences. Section 7 and 7A of the Firearms Act 1996 prescribes that firearms may only be used in connection with the purpose established by the person as being a genuine reason for possession or using the firearm.
The firearms applicable to the various categories of licences are as follows. Category A: air rifles, rimfire rifles other than self-loading, shotguns other than pump action or self-loading, shotgun/rimfire combinations. All prohibited firearms are excluded from this category. Prohibited firearms are listed in schedule 1 of the Firearms Act 1996. Category B firearms: muzzle-loading firearms other than pistols, centrefire rifles other than self-loading, shotgun/centrefire rifle combinations. All prohibited firearms are excluded from this category. Prohibited firearms are listed in schedule 1 of the Firearms Act 1996. Category C firearms: self-loading rimfire rifles with a magazine capacity of no more than 10 rounds, self-loading shotguns with a magazine capacity of no more than five rounds, pump-action shotguns with a magazine capacity of no more than five rounds. These firearms are prohibited except for limited purposes. Some firearms, specifically those adapted for military purposes, are excluded under all circumstances from this licence category.
Category D firearms: self-loading centrefire rifles, self-loading rimfire rifles with a magazine capacity of more than 10 rounds, self-loading shotguns with a magazine capacity of more than five rounds, pump-action shotguns with a magazine capacity of more than five rounds, any firearms to which category C licence applies. These firearms are prohibited except for official purposes. Some firearms, specifically those adapted for military purposes, are excluded under all circumstances from this licence category. Category H firearms: pistols, including blank fire pistols and air pistols. Prohibited firearms are excluded from this category. Prohibited pistols are not authorised for sport/target shooters.
Section 33 of the Firearms Act 1996 provides that the Commissioner of Police is to maintain a register of all individual firearms in New South Wales. Section 73 of the Firearms Act 1996 provides firearms prohibition orders:
The Commission may make a firearm prohibition order against a person if, in the opinion of the Commissioner, the person is not fit in the public interest to have possession of a firearm. A firearm prohibition order takes effect when a police officer serves a copy of the order personally on the person against whom it is made. The Commissioner may revoke a firearm prohibition order at any time for no stated reason.
The storage of firearms is governed in New South Wales pursuant to section 40 and 41 of the Firearms Act 1996 that provides:
Section 40. Category A and B licence requirements.
(1)The holder of a category A or category B licence must comply with the following requirements in respect of any firearm to which the licence applies:
(a)when any such firearm is not actually being used or carried, it must be stored in a locked receptacle of a type approved by the Commissioner and that is constructed of hardwood or steel and not easily penetrable;
(b)if such a receptacle weighs less than 150 kilos when empty, it must be fixed in order to prevent its easy removal;
(c)the locks of such a receptacle must be solid metal and of a type approved by the Commissioner;
(d)any ammunition for the firearm must be stored in a locked container of a type approved by the Commissioner and is kept separate from the receptacle containing any such firearm;
(e)such other requirements relating to security and safety of storage may be described by the regulations. Maximum penalty: 20 units or imprisonment 12 months or both.
(2)a licensee does not have to comply with the requirements of this section if the licensee satisfies the Commissioner that the licensee has provided alternate arrangements for the storage of firearms in the licensee’s possession that are of a standard not less than the requirements as set out in this section.
Firearms Act 1996 section 41, category C, D and H licence requirements:
Category C, D and H licence requirements.
(1)The holder of a category C, D or H licence must comply with the following requirements in respect of any firearm to which the licence applies:
(a)when any such firearm is not actually being used or carried, it must be stored in a locked steel safe of a type approved by the Commissioner and it is not easily penetrable;
(b)such a safe must be bolted to the structure of the premises where the firearm is authorised to be kept;
(c)any ammunition of the firearm must be stored in a locked container of a type approved by the Commissioner that is kept separate from the safe containing such firearm;
(d)such other requirement relating to security and safety storage that may be required by the regulations. Maximum penalty: 50 penalty units or imprisonment for two years or both.
(2)A licensee does not have to comply with the requirements of this section if the licensee satisfies the Commissioner the licensee has provided alternate arrangements for the storage of firearms in the licensee’s possession that are of a standard not less than the requirements set out in this section.
Section 42 provides for the seizure of firearms if storage is not met and provides:
42. Seizure of firearms if storage requirements are not met.
(1)A police officer must seize any firearm or ammunition if the officer has reasonable grounds to believe it is not being kept in accordance with this part.
There is no suggestion that a firearms prohibition order has been made against the father. The father expresses his desire to own firearms in the future. The father suggested during the hearing, through his solicitor, he would be prepared to be bound by an order that prevented him removing a firearm from storage in the presence of the children. An injunctive order suggested by the mother is one that would interfere with the husband’s rights to have a firearm in his possession, locked in storage in accordance with storage requirements set out in the Firearms Act 1996 at his premises.
The court considers section 60CC of the Family Law Act 1975 when determining what is in the best interests of the children. The father accepted in cross-examination it was a stupid mistake to show X the pistol and a mistake that it discharged.
The court must be careful to apply the law in proceedings such as these as opposed to determining a matter based upon personal views or preference. Some in society find the use of firearms abhorrent. For others in society, such as those living on the land, firearms are in many cases what might be regarded as a matter of necessity. Some people hunt and others do not. The issue around firearms is one of a matter of personal view or preference.
While the father did mistakenly discharge a cleaning pellet into the wall, which was a regretful incident, it is the view of the court that the children will not suffer physical or psychological harm through being subjected to or exposed to abuse, neglect or family violence, nor does or will the father lack the capacity to provide for the needs of the children, including their intellectual and emotional needs if the court were to refuse the mother’s application and put in place orders of a different type to prevent the children’s actual exposure to firearms in the father’s household.
The licensing, purchase, registration and storage of firearms in New South Wales is highly regulated. The court determines that the best interests of the child, having had regard to section 60CC, allow the Court to put in place a set of Orders that will firstly remind the father of his legal obligations and secondly mitigate against the children being exposed to firearms in a manner that does not prevent the father owning or storing forearms and makes orders in the following terms. The father shall not keep upon his premises at which the children, X, born (omitted) 2006 and Y, born (omitted) 2008 spend time, any firearm unless he holds a licence entitling him to possess that firearm. The father shall cause all firearms in his possession to be registered in accordance with the Firearms Act 1996 NSW. The father shall ensure that all firearms the father has in his premises at which the children spend time shall be stored in accordance with sections 40 and 41 of the NSW Firearms Act 1996. The father shall not remove from storage any firearm in the presence of the children other than as agreed between the parties in writing.
PROPERTY:
The parties seek orders for property settlement pursuant to section 79 of the Family Law Act 1975.
For the purposes of this section of the judgment, the Court will refer to the Applicant as the wife and respondent as the husband as this section concerns the adjustment of property between parties to a marriage.
The wife seeks final property orders as set out in her amended initiating application filed 20 July 2015, that provides, in essence:
(a)The former matrimonial home situated at and known as Property B, be sold
(b)Orders in respect of the conduct of the sale, including appointing an agent to nominate the sale price where the parties cannot agree, the former matrimonial home be marketed for sale by private treaty for a period of four months and then offered for sale by public auction.
The wife proposes that the net proceeds of sale after paying out the mortgage secured over the home, the payment of agent’s commission and legal costs of the sale be then divided, the greater, of 65 per cent, or $318,000.00 to the wife and 35 per cent or the remainder or balance to the husband. The wife sought orders that the husband pay the mortgage payments, council water rates and insurances on the former matrimonial home until the sale completes. The wife sought orders for an adjustment of the husband’s superannuation interests in her favour being 30 per cent of the husband’s superannuation entitlements.
The wife relied upon the following documents that the court has already considered:
a)further amended initiating application, filed 20 July 2015;
b)further amended reply response, filed 20 July 2015;
c)financial statements, sworn 23 August 2013, 13 November 2014, 13 November 2015;
d)affidavit of the applicant wife, filed 13 November 2015;
e)affidavit of Mr J, filed 3 December 2015.
The husband sought orders as set out in his further amended response filed 9 November 2015, that provided, in essence:
(a)The wife transfer her interests in the former matrimonial home at Property B, to the husband in 60 days.
(b)The husband refinance the mortgage over the former matrimonial home, removing the wife as borrower or guarantor; the husband pay to the wife $230,000.00 upon the transfer of the wife’s interest to the husband; should the husband fail to make payment to the wife and refinance the mortgage the former matrimonial home be sold. The husband pay to the wife the sum of $30,000 from his interest in the super fund by way of splitting order; otherwise, each party retain all of the property in their possession.
The husband sought an order pursuant to section 106A in relation to the execution of documentation by a Registrar to give effect to the orders. In support of the orders sought by the husband, he relied upon the following documents that the court has read and considered: further amended response filed 9 November 2015; affidavit of Mr Manson, filed 9 November 2015; financial statement of the husband, filed 9 November 2015; affidavit of Mr M, filed 13 February 2015.
A notable feature in the orders sought is that the husband seeks to retain the former matrimonial home at Property B, and make payment to the wife in the sum of $230,000.00, and the wife seeks the former matrimonial home be sold and proceeds be paid to her as to the greater of 65 per cent or $318,000.00. There is, in these proceedings, a dispute as to the value of the former matrimonial home and submissions on the question of waste by the husband.
By way of background, the wife was born on (omitted) 1968 and the husband was born on (omitted) 1964. The parties did not cohabit before their marriage and married on (omitted) 2000. After the marriage, the parties began living together at a rental property in (omitted). At the commencement of the marriage, both parties agreed that the wife had some $59,000 in savings. The wife suggested in addition she had a Mitsubishi (omitted). The husband deposes that the Mitsubishi was worth some $11,000.
The husband suggests that he had bank accounts. The wife set out at paragraph 35 of her affidavit the husband asserted he had deposited $23,000 into her (omitted) Bank account prior to the marriage. The wife did not admit that assertion. The wife also noted the husband asserted that he had $18,000 at the time of the parties’ marriage. The wife similarly did not admit that assertion.
The wife gave evidence of having worked as an (occupation omitted) with (employer omitted) from 1996 and had accumulated superannuation entitlements as at the date of the parties’ marriage. At the time the parties married, the wife was working with (employer omitted) and the husband was working as an (occupation omitted). The wife annexed to her affidavit a statement of her superannuation plan, showing a balance of some $23,894.13 as at the time of the marriage.
The wife gives evidence of the husband having an interest in a business in (country omitted), consisting of a truck that was hired out. In 2001, the parties purchased a property at Property G. The wife suggests the purchase price was for $320,000. The husband gave evidence the parties obtained a first home buyers’ grant for the purchase in the sum of $14,000.
Sometime between 2001 and 2002, the wife lost her job with (employer omitted) and thereafter took up employment in a (employer omitted). In about August 2003, the husband took up employment as an (occupation omitted). In early 2003, the wife obtained employment at the (employer omitted) as an (occupation omitted). Somewhere between February and April 2003, the parties purchased a property at Property H.
On (omitted) 2006, the parties’ son, X, was born. The wife gave evidence of having received 12 months paid maternity leave, and following the 12 months did not return to the workforce, remaining at home to care for X. The husband suggests that somewhere between 2004 and 2005 his interest in the (country omitted) (omitted) business was sold and he thereafter received the sum of $10,000 that was utilised on renovations, a holiday and the mortgage.
In 2007, the husband arranged a new work roster, and the parties moved to live in the Property H property in (omitted). Between 2007 and 2009, the parties rented out the Property G residence. The husband gave evidence that he managed the rental privately. On (omitted) 2008, the parties’ daughter, Y, was born. On or about 1 July 2009, the parties sold the Property H property, and for a time rented a property at (omitted).
On or about 1 February 2010, the parties sold the Property G property. Some time in late 2009, the parties purchased a property at Property S, The husband gave evidence they retained the property for 210 days. The wife gave evidence they retained the property for some seven months. The property was subsequently sold, and the parties thereafter purchased Property B, on 30 July 2010, for approximately $467,000.
The parties separated on January 2012, but remained under the same roof until July 2012. The husband suggests separation occurred as early as October 2011. For the purposes of these proceedings, it makes little difference as to the dates of separation suggested by the parties. Ultimately, the parties ceased residing under the same roof in July 2012. At the time of the hearing, the wife was working at (employer omitted) as a (occupation omitted) four days per week, and lives in rental premises.
At the time of swearing her affidavit and financial statement, the wife was earning some $780 per week gross and received a single parenting payment and Family Tax Benefit of $310 per week, plus child support of some $299 per week. The wife disclosed she was in a relationship with a fellow known as Mr S, but gave evidence that she and Mr S maintained separate residences and separate finances. The husband disclosed in his financial statement to earning a gross income from his employment of some $1650 per week.
These are proceedings governed pursuant to section 79 of the Family Law Act 1975 and generally Part VIII of the Family Law Act 1975. In the case of Stanford & Stanford (2002) 293 ALR 70, the High Court at paragraphs 78 and 79 considered the matter in which the court should approach and determine property proceedings, and held:
It is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.
The court has historically determined property proceedings in accordance with its well-established principles set out in Hickey & Hickey (2003) FLC 93 at 143, embarking upon a four-step process. The first step requires the court to identify and value assets, liabilities and financial resources of the parties at the time of the hearing. The second step requires the court to consider the parties’ contributions and consider any adjustment that should be made between the parties. The third step requires the court to consider the actual circumstances of the parties and to make adjustment for those circumstances, considering a variety of factors set out at section 75(2) of the Family Law Act 1975. The last step, step 4, requires the court to satisfy itself as to the actual effect of the orders being just and equitable.
In the Full Court decision in Bevan & Bevan, the Full Court considered the decision in Stanford and the implications of that decision when looking at the four-step approach taken by the courts. Bryan CJ and Thackray J held at paragraph 59:
Prior to Stanford, property applications were commonly dealt with by reference to what the trial Judge called “a four stage process”. This process was described at paragraphs 31 and 32 of his Honour’s reasons. The jurisprudential basis for the process was well established – see the line of cases cited in Hickey & Hickey.
The four-step process involves the identification and valuation of the property of the parties; identification and evaluation of the contributions of the property, including property no longer owned by the parties; identification and assessment of the various matters set out at section 75(2); considerations of matters of justice and equity.
Although the four step process has been regularly applied, the Full Court has stressed it is no more than a means to an end, since the statutory obligation is to alter existing interests only if it is just and equitable to do so. Thus, in Norman & Norman [2013] FamCAFC 116, Finn, May and Murphy JJ said:
It is the mandatory legislative imperative (to reach a conclusion that is just and equitable) that drives the ultimate result. For all its usefulness and merit as a “disciplined approach” or a “structured process of reasoning”, the “three-step” or “four-step” approach merely illuminates the path to the ultimate result.
To like effect, in discussing the four step approach in our joint judgment in Martin & Newton, we said that the approach is not legislatively mandated, and the Full Court in Hickey said it is simply the preferred approach. This is because it will be sufficient, in most cases, to have regard to the overall justice and equity of the orders after determining the asset pool, consideration of contributions and assessment of the relevant section 75(2) factors.
But in our view, there is no requirement that the justice and equity of orders as prescribed by section 79(2) must only be considered at the fourth and last stage. In our view, the requirement to make an order that is just and equitable permeates the entire decision making process, and it is not impermissible to consider it at an earlier point if the particular case requires it. We consider this is such a case.
What is clear from the case law is that the four-step approach, whilst not legislatively mandated, continues to be adopted by the courts when determining applications under section 79 of the Family Law Act 1975 for adjustment of property interests, as it is a means by which the court is able to illuminate a pathway towards a result that is just and equitable. The approach is well-established in authorities; in that regard, see the cases In the Marriage of Lestere (1995) FLC 91-626; In the Marriage of Ferrero (1993) FLC 92-335; In the Marriage of Klausen (1995) FLC 92-595. In the case of Whinton & Whinton (2014) FamCA 102, where Johnston J stated:
In our view, it will be less likely that a separate issue arises under section 79(2) and (4) will be conflated if judges refrain from evaluating contributions and other relevant factors in percentage or monetary terms until such time as they have first determined that it would be just and equitable to make an order.
This is a case where the assets of the parties are not divided evenly between them, and the court takes the view that, in this case, the court ought to make a finding as to whether it is just and equitable to make an order when identifying, according to the ordinary common law and principles of equity, the existing legal and equitable interests of the parties.
In Stanford, the High Court suggested that in many cases where an application is made for a property settlement order the just and equitable requirement is readily satisfied by observing that as a result of a choice made by one or both of the parties the husband and wife are no longer living in a matrimonial relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be a common use of property by the husband and wife. This is one of those cases. The court finds that it is just and equitable to make a property settlement order adjusting the parties’ property interests.
During the hearing, the court will sometimes utilise the evidence of experts, such as valuers, agreement between the parties or the making of findings upon the evidence presented to identify the value of property, liabilities and financial resources. Tendered during the proceedings is the joint balance sheet forming exhibit C. There are some three items within the balance sheet, the value of which is in dispute, being that of the former matrimonial home at Property B, the value of camping gear and trailer in the husband’s possession and the value of a diamond ring in the husband’s possession.
An examination of the joint balance sheet reveals that the husband contends the Property B property is worth $440,000, and the wife contends that the said property is worth $530,000. Interestingly, both parties rely upon the evidence of the single expert valuer Mr J, found within his affidavit as forming the foundation for their contentions as to the value of Property B. It is not a disputed fact in these proceedings that the property has a number of what the valuer described as defects that stem from site drainage deficiencies.
The valuation provides a value $440,000 at page 6 of 19. At page 7 of 19, the method of valuation sets out the market value as the estimated value for which an asset should exchange on the date of valuation between a willing buyer and willing seller in an arm’s length transaction after a proper marketing wherein the parties had each acted reasonably, prudently and without compulsion.
Under the heading General Comments found at paragraph 10 within the valuation, it states:
We have been provided with a copy of a building report prepared by Mr P dated 11 June 2014 which highlights a number of defects which stem from site drainage deficiencies. The report highlights a series of defects, along with estimated repair costs including cracked cladding, cracked entry tile grout, glass brick window cracking, northeast corner footing foundation movement, incomplete concrete retaining wall, subsided timber decking around the pool impacting pool structure, inadequate draining, twisted, split balcony timbers and staining to the lounge room ceiling. The costs estimated to rectify the noted defects by Mr P is $30,718.60 including GST.
Further damage noted includes a water leak in the lounge room which has damaged the ceiling plasterboard around the areas previously noted as staining only. While it is common for dwellings on sloping sites to experience movement and settlement cracks, the extent of the defects is considered to have a negative impact of the value and marketability of the property. Sale of dwellings requiring significant works often result in a depreciation of value greater than the cost to complete the works, particularly when buyers are often restricted to builders, home renovators or bargain hunters who allow some level of profit and risk and purchase resale cost.
There is often little relationship between the cost of the partially completed works and the added value of those works. A potential purchaser may consider the acquisition of the property in its current state in order to effect repairs and/or renovate for future sale to generate profit. The amount which the as-is value is depreciated in such cases depends on the quantum of costs, which include repair costs, purchase and resale costs, agent’s fees, marking and legal fees, stamp duty and finance cost, as well as profit and risk allowance.
The valuer prepared what I might describe as a calculation of expenses.
Calculation:
$30,718.00 repairs
$15,000.00 profit and risk
$15,619.00 stamp duty on purchase
$18,558.00 agent’s fee on resale
$2,750.00 legal fees on purchase to resale
$ 7,500.00 contingency allowance for costs increase
since 2014 and repairs to ceiling roof leak
The valuation is of the property being worth $440,000 as-is. The wife seeks a value of $530,000 being the suggested value of the property after repairs. The husband seeks a value of $440,000.
To be clear, the Court does not accept the submissions of the solicitor for the wife. The Court cannot compel either party to expend moneys and undertake repair work to the property more than the Court could order parties in any other property proceedings to knock down an existing home and build another or to do such things as add a second story, addition or pool if the overall value of the property were to be increased by such work. The value of the Property B property is what it is, as the property is now, not what it might be or could possibly be. The Court finds the value of Property B as being $440,000.00.
The husband suggests his camping gear and trailer are worth nil. The wife suggests they are worth $4000.00. The Court has no expertise in valuation. As a means of dealing with the value, the Court will order the items be listed for sale by the husband on eBay and the parties shall not be excluded from purchasing the single items themselves by bidding on the items. The proceedings will thereafter be divided between the parties.
The husband suggests the engagement ring in his possession is worth $2000. The wife suggests it is worth $9000 as an estimate. The wife offered no evidence as to the value of the ring. The husband annexes to his affidavit a valuation of (omitted) dated 9 September 2013. The valuation suggests that the ring has a retail replacement value of $6600 and a value second-hand in its current state of $2000. The Court accepts the value of the ring at $2000.
In submissions on behalf of the wife, the solicitor for the wife suggested the husband had sought to deliberately devalue the Property B property. In the decision of Kowaliw (1981) FLC 91-092, the Full Court of the Family Court held that the financial losses incurred by the parties or either of them in the course of their marriage should be shared by them, although not necessarily equally unless one of the parties has embarked on a course of conduct designed to reduce the value of the assets, or one of the parties has acted recklessly, negligently or wantonly with the assets, causing reduction or minimisation of their value. This is often referred to as waste.
The Court has considered the cross-examination of the husband and has read and considered the report of Mr P that forms annexure J to the husband’s affidavit. The Court finds that the evidence does not establish that the husband embarked upon a course of conduct designed to reduce the value of Property B, nor did the husband act recklessly, negligently or wantonly with Property B causing reduction or minimisation of the value of the property.
The wife seeks to include her unpaid legal fees of $20,000 as a liability in the pool of assets and liabilities. The Court notes the provisions of section 117 with respect to each party paying their own costs unless the Court finds it is justified in making a costs order, and makes an order it considers just having regard to those matters set out at section 117(2A). The Court does not allow unpaid legal fees as a liability.
The Court finds the assets and liabilities of the parties available for division are as follows:
Asset:
a)Property B, held in joint names, $440,000.00.
b)Contents and furnishing in the wife’s name, $2000.00.
c)Wife’s bank account, $4487.00.
d)Husband’s contents and tools, $2000.00.
e)Husband’s trailer and camping gear, to be sold.
f)Wife’s car, (omitted) Mazda, wife’s name, $14,300. 00.
g)Husband’s bank account, $1951.00.
h)Husband's (omitted) Bank trust account, $980.00.
i)Diamond ring in the position of the husband, $2000.00.
Total pool: $467,718.00.
Liabilities:
a)Mortgage, joint, $1100.00.
b)Husband's (omitted) MasterCard, $2351.00.
c)Wife's (omitted) Visa card, $671.00.
Total: $4122.00.
Total: 467,718 less liabilities 4122, net asset pool $463,596.00.
Superannuation:
a)Husband's (omitted) Super, $166,030.00.
b)Wife's (omitted) Super, $180,362.00.
Total: $346,392.00
Total pool excluding super: $463,596.00. Total pool including super: $809,988.00.
When considering contributions pursuant to section 79(4)(a), the Court accepts that the wife made a greater initial financial contribution as at the commencement of the parties’ marriage. Otherwise the Court accepts the parties were for the remainder of their marriage in a joint enterprise. The Court has considered the evidence of that work the husband has completed that might best be described as building or renovation work, the type of which falls into a category of contributions found at section 79(4)(b).
The Court has considered the evidence of the wife with respect to having done the majority of domestic duties and having cared for the children by way of contribution to the marriage as homemaker and parent. That falls into a category of contributions found at 79(4)(c). The Court allows 55 per cent to the wife and 45 per cent to the husband based on contributions.
The Court considers the effect of the proposed orders and considers that it will have no effect on the parties’ earning capacity. The Court considers those factors set out at section 75(2). The Court notes with respect to the age and state of health of the parties the husband is 52 years and the wife is 48. Both parties are in good health.
The Court has considered the income, property and financial resources of each of the parties and their physical and mental capacity for appropriate gainful employment. The husband earns twice that which the wife currently earns. Both have the physical and mental capacity for gainful employment. The Court considers the parties have no financial resources other than the pool of assets available division.
The Court takes into account that the wife has the care of X and Y. They live with her and spend time with the father. The Court notes the commitments of each of the parties that are necessary to enable the parties to support himself or herself. There are no other children of the marriage. There are no other children of the parties outside of the marriage. The Court notes the wife receives a payment from Centrelink. The Court considers both parties will be afforded a standard of living that in all the circumstances is reasonable.
The Court considers the duration of the marriage and the extent to which it has affected the earning capacity of the parties. The Court considers the wife’s argument with respect to the effect of the length of the marriage upon her earning capacity where she gave up work to care for the children. The Court gives some weight to the mother’s argument.
The Court considers whether either party is cohabiting with another person and the financial circumstances relating to that cohabitation. The Court notes the wife is currently in a relationship; however, the Court determines she is not cohabiting with that person. The Court notes that on the face of the evidence, neither party is cohabiting with another person, the type of which should be considered and given weight pursuant to section 75(2), subparagraph (m).
The Court considers the child support paid by the husband to the wife. The Court considers that there are no other facts or circumstances which, in the opinion of the Court, the justice of the case requires to be taken into account pursuant to section 75(2)(o). There are no financial agreements binding upon the parties to the marriage. There are no Part VIIIAB financial agreements binding upon the parties to the marriage. The Court finds 57 per cent to the wife and 43 per cent to the husband for section 75(2) factors.
The Court notes the father pays child support to the mother. The Court finds an overall adjustment between the parties as to 62 per cent to the wife and 38 per cent to the husband. When standing back and considering the effect of the orders, taking into account section 79(2), the Court determines that it is not just and equitable to make a further adjustment between the parties. Based upon the adjustment between the parties on the assets as found by the Court, the Court makes the following orders.
I certify that the preceding sixty-seven (67) paragraphs are a true copy of the reasons for judgment of Judge Myers.
Date: 27 April 2017
Key Legal Topics
Areas of Law
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Family Law
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Property Law
Legal Concepts
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Remedies
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Jurisdiction
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Statutory Construction
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