Marinos & Marinos
[2023] FedCFamC2F 1659
•20 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Marinos & Marinos [2023] FedCFamC2F 1659
File number(s): ADC 3085 of 2022 Judgment of: JUDGE KELLY Date of judgment: 20 December 2023 Catchwords: FAMILY LAW – Property – weight to be attached to contributions – future needs Legislation: Family Law Act 1975 (Cth) ss.75(2), 79, 117 Cases cited: Bevan & Bevan [2013] FamCAFC 116
Borriello and Borriello (1989) FLC 92-04
Hickey & Hickey & Attorney-General of the Commonwealth (Intervener) (2003) FLC 93-143
In the Marriage of Pierce [1998] FamCA 74
Jabour v Jabour [2019] FamCAFC 78
Rosati v Rosati [1998] FamCA 38
Stanford & Stanford (2012) 247 CLR 108
Watson & Ling [2013] FamCA 57
Division: Division 2 Family Law Number of paragraphs: 108 Date of last submission/s: 21 November 2023 Date of hearing: 25-26 October 2023 Place: Adelaide Solicitor for the Applicant: Di Rosa Lawyers Counsel for the Applicant: Mr J Bowler The Respondent: In Person ORDERS
ADC 3085 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR MARINOS
Applicant
AND: MS MARINOS
Respondent
ORDER MADE BY:
JUDGE KELLY
DATE OF ORDER:
20 DECEMBER 2023
THE COURT ORDERS THAT:
In full and final settlement of all claims between the parties for settlement of property:
1.The wife shall pay to the husband no later than sixty days from the date of this Order the sum of $648,858.00 together with the sum of $500.00 in accordance with the costs order pronounced on 14 June 2023, totalling $649,358.00 (“the settlement sum”).
2.Simultaneous with payment of the settlement sum, the husband shall transfer to the wife his right, title and interest in the property located at B Street, Suburb C in the State of Australia, being the whole of the land comprised in Certificate of Title Register Book Volume … Folio … (“the B Street property”).
3.Simultaneous with Orders 1 and 2, the wife shall discharge or refinance into her sole name and at her expense the Mortgage secured upon the B Street property.
4.Subject to any specific term of these Orders, the husband is entitled to retain for his sole use and benefit absolutely the following:
(a)The settlement sum;
(b)His separate savings;
(c)Motor Vehicle 1 and Motor Vehicle 2;
(d)His furnishings and personal effects;
(e)His remaining interest in Super Fund 1.
5.Subject to any specific terms of the Orders the wife is entitled to retain for her sole use and benefit absolutely the following:
(a)The B Street property;
(b)The property located at D Street, Suburb C in the State of South Australia being the whole of the land comprised in Certificate of Title Register Book Volume … Folio … (“the D Street property”);
(c)Her separate savings;
(d)Motor Vehicle 3;
(e)Motor Vehicle 4;
(f)Her furniture and personal effects;
(g)Her jewellery;
(h)Her interest in Super Fund 2;
(i)Her entitlement pursuant to the superannuation splitting order.
6.Except as otherwise provided for in these Orders, each party shall be solely responsible for any debt in their sole name and release the other party from any such debt or claim.
Non compliance
7.In the event the wife fails to pay to the husband the said settlement sum in accordance with Order 1, then the husband shall notify her in writing that she is in default (“the default notice”);
(a)in that event the parties shall do all acts and things necessary to place the D Street property on the market for sale with a real estate agent to be agreed between them within 14 days of the default notice, and failing agreement, with an agent to be nominated by the President of the Real Estate Institute of South Australia;
(b)The property shall be listed for sale at a price to be agreed between the parties within seven (7) days or in default of agreement, at a selling price set by the nominated real estate agent; and
(c)the wife shall do all acts and things and sign all documents as may be necessary to finalise sale of the D Street property.
8.In the event the D Street property is sold to give effect to these orders, then each party shall be responsible for one half of any capital gains tax debt (“the CGT debt”) that follows.
9.The parties do all things necessary to instruct the wife’s accountant (or if unavailable, then an accountant otherwise agreed between the parties) to calculate the anticipated CGT debt likely to arise from the sale of the D Street property, noting that the husband’s solicitors are authorised to liaise directly with the wife’s accountant or other agreed accountant in this regard.
10.Upon the D Street property being sold the net proceeds of sale shall be distributed as follows:
(a)In discharge of any outstanding council and water rates;
(b)In discharge of the Real Estate’s agent’s proper commission arising from the sale;
(c)In payment of all proper legal costs and expenses arising from the sale;
(d)In payment to the husband in the sum of $649,358, plus interest, and less an amount equal to one half of the anticipated CGT debt, such sum to be held in the husband’s solicitor’s trust account, pending the final calculation of the capital gains tax;
(e)The balance then remaining to the wife.
11.Upon final calculation of the CGT debt the husband’s solicitors shall release an amount equal to one half of the amount calculated to the wife, with any balance remaining to be released to the husband. In the event the funds held by the husband’s solicitors are insufficient to meet the husband’s one half share, then he shall pay the balance outstanding to the wife within 14 days.
Superannuation Splitting Order
12.The following shall apply to the husband’s interest in Super Fund 1 (“the said Fund”):
(a)The base amount of $36,864 is allocated pursuant to s.90XT(4) to the wife out of the husband’s interest in the said fund;
(b)In accordance with s.90XT(1)(a):
(i)The wife is entitled to be paid the amount calculated pursuant to Part XI of the Family Law Act (Superannuation) Regulations 2001 (Cth).
(ii)There will be a corresponding reduction in the husband’s entitlement to the said Fund.
(c)The Trustee of the said Fund must comply with the obligations imposed upon Trustees of eligible Superannuation Funds under the Act and the Family Law (Superannuation) Regulations 2001 (Cth).
13.Paragraphs 12(a) – (c) herein bind the Trustee of the said Fund and take effect from the operative time being the fourth business day after service of a copy of the sealed Orders upon the Trustee.
14.The wife serve a certified copy of the sealed Orders upon the Trustee as soon as practicable and thereafter sign all documents as may be necessary to implement the roll over or transfer of her transferrable benefits out of the Applicant’s interest into a superannuation fund of the wife’s choosing.
15.In the event either party refuses or neglects to execute any deed or instrument within 14 days of being requested to do so by the other party or by the Real Estate agent, then a Judicial Registrar be appointed pursuant to s.106A of the Family Law Act (1975) (Cth) to execute such deed or instrument on behalf of that party and do all acts and things necessary to implement the deed or instrument.
16.The proceedings are dismissed as finalised.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE KELLY
INTRODUCTION
The parties Mr Marinos and Ms Marinos separated on 25 August 2021 after a marriage of twenty five years. They have been unable to resolve property settlement issues arising from the breakdown of their marriage and it now falls to the Court to determine this dispute.
BACKGROUND
The husband was born in 1972 and is presently 50 years of age. The wife was born in 1975 and is presently 48 years of age. The parties were married and commenced living together in 1997 and separated on 25 August 2021, when the husband vacated the former matrimonial home and moved in to live with his parents.
At the time of their marriage the husband owned a property at E Street, Suburb F (subject to a mortgage), together with modest personal effects, a Motor Vehicle 5 and approximately $10,000 in superannuation. The husband estimated that his equity in the Suburb F property was approximately $22,000.[1]
[1] Husband’s trial Affidavit filed 4 October 2023 at para.23 and para.39
The wife owned a property at D Street, Suburb C (“D Street”) which her parents gifted to her in 1996 and was located across the street from their own home. The Transfer was stamped at a value of $162,000, reflecting the Valuer-General’s valuation at the time. The wife also held nominal savings and superannuation.
In 1998 the wife’s parents also gave her and her sister Ms G two homes each located at H Street, Suburb C. (“H Street homes”) were given to the wife but were registered in the joint names of the parties at the time of transfer, with a stamped value of $115,000, again reflecting the Valuer General’s valuation. Over the following years between 1998 and 2004 the parties had the benefit of living mortgage free in the D Street property as well as receiving rental income from the H Street homes.
The parties’ son Mr J was born in 2002. The wife experienced severe post natal depression following his birth, which was a very difficult time for the family. The wife was hospitalised for a period of time and subsequently relied heavily on support from her parents, a situation which the husband came to experience as intrusive, rather than helpful. [2]
[2] Ibid, para 85
Their daughter X was born in 2008. Fortunately the wife did not experience the same severe symptoms following their daughter’s birth, although the husband says she would “tire easily”. The family continued to receive regular support from the maternal grandparents.
In 2004 the parties decided to sell the H Street homes and achieved net proceeds of sale in the sum of $300,000, after capital gains tax.
The parties began searching for a new family home. The wife says she did not want to move as she was happy living in D Street with her parents’ support nearby, but felt pressured by the husband to purchase a new home, as he did not enjoy living in such close proximity to the maternal grandparents. In 2006 the parties purchased the property located at B Street, Suburb C, for the sum of $430,000 (“B Street”).
B Street was purchased with the net proceeds of sale from the H Street homes, together with a mortgage in the sum of $220,000. From those borrowings, the parties used $150,000 to meet the purchase price for B Street and the remaining $70,000 was directed towards extensions on the property. The husband claims he felt pressured by the wife and her parents to proceed with the extensions to B Street, but the parties’ respective attitudes to these financial decisions do not affect my overall determination.
In 2007 the parties took out a Line of Credit in the sum of $40,000, to enable them to complete the extensions.
The wife claims that the parties received further funds gifted by her parents to meet additional costs associated with the extension. The husband initially rejected this claim, but eventually conceded that the wife’s parents contributed a further $30,000 to enable the extensions to be completed. I will discuss this issue further in these Reasons.
The husband was employed full time during the marriage aside from a period of six to nine months during 2018-2019, when he was unable to work due to health issues. The husband worked for various employers as a transport worker and also established his own transport business where he would sub-contract to K Company. The husband continues to work as a transport worker.
The wife also worked throughout the relationship. She took parenting leave around the birth of both children but returned to work part time after a few months. She was employed as an administrative assistant with a local firm, L Company, before leaving that firm in 2009. The wife then worked in various part-time positions within the professional industry and undertook training to complete her qualifications in 2010. She has been employed part time as an administrative assistant with M Company since 2015.
Following the parties’ separation in 2021, the children have remained living in the wife’s care at the B Street property. Mr J is now over the age of 18 and is working part time and studying. X is 15 years of age and is completing Year 10 at N School.
THESE PROCEEDINGS
The husband filed his Initiating Application on 12 July 2022 seeking orders for property settlement.
A directions hearing took place before a Judicial Registrar on 22 August 2022 where the wife was self-represented. The Judicial Registrar made a range of standard property directions and ordered the parties to attend mediation with an agreed external mediator no later than 30 November 2022. The proceedings were adjourned before the Judicial Registrar on 30 January 2023.
The wife continued to represent herself and filed her responding documents on 22 September 2022.
At the subsequent directions hearing on 30 January 2023 the Judicial Registrar noted that the real estate valuations had not occurred, and further noted that the wife disputed the need to obtain independent valuations. The competing applications remained unresolved and accordingly the proceedings were adjourned to a Compliance and Readiness Hearing before His Honour Judge Cole on 21 February 2023, together with the usual directions requiring the parties to prepare for that hearing.
The parties appeared for the Compliance and Readiness Hearing on 21 March 2023. On that occasion the wife continued to represent herself. Judge Cole noted that valuations had still not been obtained and the matter was not ready to proceed to trial. His Honour then made the following orders and notations:
UPON NOTING THAT:
A. The wife has again been advised that it is extremely important that she obtains legal advice.
B. If the Compliance and Readiness Hearing does not proceed or the matter is unable to be listed for Final Hearing as a consequence of the non-compliance of one party, consideration will be given to a grant of leave to the complying party or parties to proceed on an undefended basis and to orders for costs.
C. If the contents of the Certificate of Readiness are found not to be accurate, consideration will be given to a grant of leave to the non-defaulting party or parties to proceed on an undefended basis and to orders for costs.
D. Any adjournment of the Compliance and Readiness Hearing event is at the discretion of the presiding Judge, and such requests must be made in writing jointly to the presiding Judge’s Chambers no less than 7 days prior to the Compliance and Readiness Hearing.
THE COURT ORDERS THAT:
1. The parties take all steps necessary to undertake a valuation of the properties with costs to be shared equally between the parties NOTING THAT the initial costs of the valuation is to be paid by the husband with the wife’s share to be paid from her share of the property settlement.
2. The wife take all steps necessary to provide the valuer with access to the property for the purposes of undertaking the inspection of properties.
3. The parties take all steps necessary to undertake a valuation of the cars in the wife’s possession with the costs to be shared equally between the parties NOTING THAT the initially costs of the valuation is to be paid by the husband with the wife’s share to be taken from the property settlement.
4. The parties attend a Conciliation Conference with a Judicial Registrar of the Federal Circuit and Family Court of Australia on 14 June 2023 at 9:00 am.
5. The applicant pay the Conciliation Conference fee in accordance with the Family Law (Fees) Regulation 2012 at least 28 days prior to the Conciliation Conference unless otherwise exempted from payment.
6. The wife reimburse the husband one half of the Conciliation Conference fee from her share of the property settlement.
7. All valuations or any other relevant documents that the parties wish to rely upon be exchanged 14 days prior to the Conciliation Conference pursuant to Chapter 6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
8. No less than 7 days prior to Conciliation Conference each party must:
a. ensure that any private expert report that is relevant to the proceedings has been filed;
b. provide to the Court (by email to [email protected]) and to the other party a single collated bundle of documents comprising:
i.a Confidential Outline of Case (Dispute Resolution);
ii.a detailed minute of Orders Sought;
iii.details of any previous or current family violence orders;
iv.a copy of any document exchanged between the parties which is directly relevant to an issue remaining in dispute (with relevant passages highlighted);
v.particulars of any financial resource;
vi.a valuation or market appraisal of any real estate or other asset the value of which is in dispute;
vii.statements for, and where applicable, valuations of any superannuation interest;
viii.written confirmation that the trustee of any fund that may be the subject of a splitting order has been afforded procedural fairness.
9. The proceedings are listed for a Compliance and Readiness Hearing on 27 June 2023 at 9:00 am NOTING the parties are required to personally attend on this day UPON FURTHER NOTING it is requested that counsel properly instructed for trial attend and in the event they are not available, the file principal attend.
10. In accordance with the FCFCOA Central Practice Direction – Family Law Case Management, no less than 7 days prior to the listing, each party must file and serve:
a. An Amended Application or Response as appropriate, setting out the precise orders sought, if the most recently filed Application or Response is not current;
b. An undertaking as to disclosure in accordance with Rule 6.02 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth); and
c. A Certificate of Readiness in the approved form.
11. The parties no less than seven (7) days prior to the Compliance and Readiness Hearing date provide to the Court a case outline including:
a. A joint table of assets and liabilities noting those items agreed, those remaining in dispute and the steps to be taken to resolve the disputed items;
b. A brief Summary of Argument including a Minute of Orders sought;
c. A trial plan indicating estimated length of trial sought and witnesses relied upon at trial;
d. The factual issues requiring determination at a Final Hearing;
e. The main legal and factual contentions advanced in relation to each issue in dispute;
f. Whether interpreters are required; and
g. Whether any other step is required in order for the matter to proceed to a Final Hearing.
The parties attended a Conciliation Conference before Judicial Registrar McDonald on 14 June 2023. The Judicial Registrar noted the Conference could not proceed as there were still no real estate valuations completed and that the Respondent wife was unwilling to participate in obtaining valuations for the two properties. She further noted that the wife “was unable to communicate with the Court and the solicitor for the Applicant in a respectful manner”. [3] As a result the Judicial Registrar ordered that the Respondent pay the Applicant husband’s costs in relation to preparation for the Conciliation Conference in the sum of $500, to be paid at the conclusion of these proceedings.
[3] Order dated 15 June 2023 notation B ii
The parties appeared before His Honour Judge Cole for a further Compliance and Readiness Hearing on 27 June 2023. There were still concerns about the readiness of the matter, as the Respondent continued to refuse to allow a valuer access to the properties. Nonetheless His Honour listed the matter for a three day trial commencing 25 October 2023.
THE TRIAL
The trial proceeded before me on 25 October 2023. The husband was represented by Mr Bowler of Counsel and the wife represented herself, as she has done throughout these proceedings.
The husband relied upon the following documents:
(1)His Initiating Application filed 12 July 2022;
(2)His Affidavit filed 4 October 2023;
(3)His Financial Statement filed 4 October 2023;
(4)Affidavit of Aladino Di Rosa filed 20 March 2023;
(5)His Outline of Case document filed 25 October 2023.
Counsel for the husband also tendered a range of documents which I have taken into account. Finally Counsel for the husband also tendered a proposed Minute of Order marked for identification “MFI H1”.
The wife relied upon the following documents:
(1)Her Response to Initiating Application filed 19 September 2022;
(2)Her Affidavit filed 18 October 2023;
(3)Her Financial Statement filed 18 October 2023;
(4)Affidavit of her sister Ms G filed 22 October 2023;
(5)Affidavit of her brother-in-law Mr P filed 22 October 2023;
(6)Her Outline of Case document filed 25 October 2023.
Both parties gave evidence and were cross examined, as were the wife’s two supporting witnesses. Counsel for the husband objected to substantial portions of the supporting witnesses’ Affidavits and those objections were largely upheld. In circumstances where the wife was representing herself, the Court permitted her to call her sister and brother-in-law to give oral evidence on certain limited issues.
Counsel for the husband agreed to interpose the wife’s supporting witnesses so that their cross examination could take place early in the hearing. This enabled the wife’s sister to remain in the Courtroom as a support person for the wife.
The wife cross examined the husband directly. This was clearly a difficult process for her, given her unfamiliarity with court proceedings. In addition, the wife found the whole trial process very emotionally demanding. While she endeavoured to put proper questions to the husband, more often she simply stated her view on a topic and became frustrated when the husband disagreed with her. The whole tenor of the wife’s cross examination was to the effect that the husband made no financial contribution to the family and that he was responsible for all the difficulties during their married life.
The husband generally maintained a calm demeanour during the cross examination. I accept that he gave his evidence honestly and to the best of his recollection, although his recollection was not always clear on detail.
The wife endeavoured to give her evidence fully but was very emotional during her own cross-examination. The wife had a detailed recollection of the parties’ financial circumstances, but at times she found it difficult to respond directly to questions put to her in cross examination. It was apparent during that the wife and her supporting witnesses view the husband through a lens of hostility and distrust. This affects the weight to be placed upon their testimony, but I am satisfied that they each endeavoured to give their evidence to the best of their recollection.
LEGAL PRINCIPLES
Section 79(2) of the Family Law Act 1975 empowers the Court to make orders altering the property interests of the parties provided that the Court is satisfied in the circumstances of the case that it is just and equitable to do so.
In the decision of Stanford & Stanford (2012) 247 CLR 108 (“Stanford”) the High Court confirmed that the starting point in any Application for property settlement is:
…. 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.[4]
[4] Stanford & Stanford (2012) 247 CLR 108, para 37
In the earlier decision of Hickey & Hickey & Attorney-General of the Commonwealth (Intervener) (2003) FLC 93-143 the Full Court noted that a four-step approach is generally appropriate when determining an application for property settlement as follows (at para.39):
(a) identify and value the parties’ property, liabilities and financial resources as at the date of hearing;
(b)identify and assess the parties’ contributions pursuant to s.79(4)(a)-(c) [or s.90SM(4)(a)-(c)];
(c)identify and assess the other factors relevant pursuant to s.79(4) (d)-(g) [or s.90SM((d) – (g)], including the matters referred to in s.75(3), [or s.90SF(3)]; and
(d)consider the effect of the findings made above and determine what Order would be just and equitable in all of the circumstances of the case.
The Full Court has made it clear that the assessment of justice and equity permeates the whole decision making process[5] and that the Court should adopt a holistic process when assessing the parties’ contributions and making any adjustment in relation to the other relevant factors, including their future needs. The “four-step” approach is simply one means to the proper end of addressing the relevant legislative requirements and ensuring that the orders are just and equitable.
[5] Bevan & Bevan [2013] FamCAFC 116 at para.84; Watson & Ling [2013] FamCA 57 per Murphy J
In determining this matter I have considered all of the evidence presented before me. I am satisfied that it is just and equitable to make property settlement orders, given the parties have separated and can no longer manage their jointly owned assets.
The Court is not required to address or rule upon every factual issue in dispute in the proceedings, particularly during a long marriage such as this. Rather I will focus on those issues most relevant to determining a just and equitable outcome between the parties. In these Reasons statements of facts should be considered findings of fact.
ASSET POOL
The parties are largely in agreement regarding the asset pool but there are significant disputes in relation to the valuation of substantial assets within the pool as follows:
(1)B Street, Suburb C
(2)D Street, Suburb C
(3)Motor Vehicle 2
(4)Motor Vehicle 4
Before setting out my findings in relation to these disputes, it is important to address the wife’s claim that the D Street property should not be included in the matrimonial asset pool at all. I acknowledge that the wife’s parents gifted D Street to the wife and it is registered in the wife’s sole name, but that does not exclude it from the asset pool. The property has increased in value throughout the marriage and it would be unjust and inequitable to exclude the D Street property from the asset pool now. However, the gift of real estate from the wife’s parents is a significant factor when assessing each party’s direct financial contributions and I will address this further in these reasons.
Regarding the real estate values, the wife refused to co-operate with a formal valuation process regarding the two properties, despite orders of the Court in that regard. As a consequence the only independent evidence before the Court consists of “drive by” appraisals by real estate agents organised by the Applicant husband.[6] In the unusual circumstances of this case, I accept that the appraisals are the best available evidence before me.
[6] Exhibits H2: Appraisals by Q Company; H3: Appraisals by R Company; H4: Appraisals by S Company
In any dispute regarding valuation, a trial judge must satisfy herself or himself that she or he has applied proper principles in arriving at an appropriate value. The trial judge should not simply adopt “a mean average” between the competing valuations (or appraisals, in this case).[7]
ASSETS
[7] Borriello and Borriello (1989) FLC 92-04 @ 92-049
Former matrimonial at B Street, Suburb C
The parties purchased the property in 2006 for the sum of $434,000. Based on the three appraisals tendered by the husband, I note that the estimated values at trial are as follows:
·S Company $1,050,000 – $1,150,000
·R Company $1,150,000 – $1,250,000
·Q Company $1,050,000 – $1,150,000
The wife initially estimated the value of the B Street property at $886,000. This figure reflects double its original purchase price, an approach that she “thought was fair”. In cross examination, the wife eventually conceded that the B Street property could be valued at $1,150,000, based on the lower R Company appraisal.
The husband’s estimated value for the property is $1,300,000. He contends that his higher value is appropriate, arguing that the appraisers were unable to assess the renovations located at the rear of the property, which would justify an increase in value. The husband seeks to add an extra sum of $50,000 to the highest appraisal to reach his estimated value of $1,300,000, however it is not open to the Court to simply accept his estimated increase in value.
In turn, the wife submitted that there had been no internal appraisal of the properties to assess the poor state of the original B Street dwelling, which would lower the value. In circumstances where the wife refused to allow any valuation of the property, I place no weight on her evidence regarding damage or cracks to the original home. These alleged deficits could have been properly considered if she had allowed a valuer to inspect the properties. The wife chose not to do so and she cannot now ask the Court to accept her estimated value.
Taking into account the limited nature of the evidence available before me, I note that the estimated value of $1,150,000 was included within each of the three appraisals. In the circumstances I will value the former matrimonial home at B Street, Suburb C at $1,150,000, which reflects some measure of agreement between the real estate agents.
Investment property at D Street, Suburb C
The husband has valued the D Street property in the sum of $1,020,000 and the wife has valued the property at $915,000. The wife says her estimate relies upon the figure initially promoted by the husband at the commencement of these proceedings in mid-2022, but the husband’s “guestimate” of the value in mid-2022 is not evidence that the Court can rely upon at trial.
The three appraisals tendered by the husband were as follows:
·S Company $900,000 – $950,000
·R Company $800,000 – $880,000
·Q Company $925,000 – $950,000
I acknowledge the difficulties faced by the husband given the wife’s refusal to co‑operate with the valuation process. The wife should not benefit from her refusal to comply with Court orders, nor should the husband’s case be disadvantaged.
In the circumstances I will value the D Street property at $950,000, based on the figure promoted by two of the real estate agents in their appraisals.
Motor Vehicle 2
The husband purchased the Motor Vehicle 2 in 1999, from the net proceeds of sale of his property at Suburb F. There is no evidence regarding the amount paid for Motor Vehicle 2 but the vehicle has been valued in the sum of $40,000.[8] The wife does not accept the valuation, arguing that the valuer, Mr T, told her that the vehicle was worth no more than $15,000. I prefer to rely upon the written valuation presented to the Court.
[8] Exhibit H5 Formal Valuation by U Company dated 6 June 2023
I therefore find the Motor Vehicle 2 motor vehicle is valued in the sum of $40,000.
Motor Vehicle 4
The husband gave evidence that he purchased Motor Vehicle 4 in 2004 from the wife’s father, using funds from the sale of a Motor Vehicle 6 that he had previously owned, together with an agreement where he gave an old Motor Vehicle 7 to the maternal grandfather.
The wife gave evidence that the husband purchased his sister’s half share of the vehicle for the sum of $5,000 in 1999. Little turns on the acquisition date of the vehicle.
The parties are in dispute in relation to the current valuation of the vehicle. The husband again relies upon a valuation from U Company, in the sum of $20,000.[9] Ultimately, the wife acknowledged that there was no other evidence before the Court and accepted that valuation.
[9] Exhibit H6 Valuation regarding Motor Vehicle 4 from U Company dated 6 June 2023
Accordingly, I find that Motor Vehicle 4 is valued in the sum of $20,000.
LIABILITIES
The parties agree as to the debts secured against the B Street property being the mortgage in the sum of $135,546 and the Line of Credit in the sum of $43,018.
The husband also seeks to include two debts allegedly owing to his sister. He says that he borrowed $14,000 to purchase his Motor Vehicle 1, together with the sum of $45,000 to assist with his legal fees. There is no independent evidence before the Court to confirm the alleged debt of $14,000 and I decline to include that debt in the matrimonial asset pool. I also decline to include the debt allegedly relating to the husband’s legal fees, as those fees remain the husband’s responsibility, in accordance with s117(1) of the Family Law Act (1975) (Cth).
I now find the matrimonial asset pool is as follows:
Ownership
Description
Value
ASSETS
1
Joint
B Street, Suburb C
$1,150,000.00
$950,000.00
$40,000.00
$20,000.00
$14,000.00
$16,000.00
Nominal
$1,169.00
Nominal
Nominal
Nominal
$2,191,169.00
2
Wife
Property at D Street, Suburb C
3
Husband
Motor Vehicle 2
4
Husband
Motor Vehicle 4
5
Husband
Motor Vehicle 1
6
Wife
Motor Vehicle 3
7
Joint
Westpac bank account
8
Husband
Personal account husband
9
Wife
Personal savings wife
10
Wife
Furniture & personal effects
11
Wife
Jewellery
TOTAL
LIABILITIES
1
Joint
Westpac First mortgage, B Street, Suburb C
$135,546.00
2
Joint
Westpac Line of Credit, Second mortgage, B Street, Suburb C
$43,018.00
TOTAL
$178,564.00
NET NON SUPERANNUATION ASSET POOL
$2,011,505.00
SUPERANNUATION
1
Husband
Super Fund 1 (agreed)
$149,062.00
2
Wife
Super Fund 2 (agreed)
$75,334.00
TOTAL
$224,396.00
TOTAL ASSET POOL
$2,235,901.00
The parties have adopted a two pool approach regarding their tangible assets and their superannuation entitlements and I agree this is appropriate.
CONTRIBUTIONS
The husband’s initial direct financial contributions
The husband owned a property at E Street, Suburb F at the date of marriage, with an estimated equity of $24,000. The husband sold the property in 1999 and retained a net equity of $43,000. He also owned a half interest in Motor Vehicle 2 with his sister (which he estimates at $8,000), superannuation valued at approximately $11,000 and a Motor Vehicle 5 and personal effects of nominal value. All of these figures are estimates only.
The proceeds of sale from the Suburb F property were used towards the purchase of Motor Vehicle 8 and the Motor Vehicle 2.
The wife’s initial direct financial contributions
The wife owned the D Street property which had been gifted to her by her parents prior to the marriage. The transfer reflecting the gift was allocated a stamped value of $162,000. The wife claims that the actual market value may have been closer to $200,000 and the husband concedes that the value of D Street may have been higher than the stamped value, but there is no evidence to confirm this. The wife also held nominal superannuation. The D Street property reflects a significant direct financial contribution on behalf of the wife.
In addition to the D Street property, in 1999 the wife’s parents also gifted her the H Street homes, with a stamped value of $115,000. The property was registered in the joint names of the husband and the wife but I find this gift is a contribution made by the wife’s parents on her behalf, noting that a similar parcel of real estate was given to her sister at the same time.
The wife’s direct and indirect financial contributions
The H Street homes were initially rented out and the wife received the rental income. The parties also lived rent free in the D Street property before they purchased B Street in late 2006, for the sum of $430,000. At that point the D Street property was rented out and the rental income was used by the parties to meet the mortgage repayments for B Street. Accordingly, the parties have effectively lived in rent-free accommodation with the assistance of the maternal grandparents, both while living at D Street and, subsequently at B Street, where the D Street rental payments met their mortgage repayments.
The parties’ contributions to the B Street property
The H Street homes were sold and the net proceeds of sale were directed to the purchase of the B Street property, in the sum of $300,000. This represents a direct financial contribution on the wife’s behalf to the B Street property. The parties also took out a mortgage in the sum of $220,000 and from that sum, $150,000 was directed towards the purchase price and the balance of $70,000 was directed to a proposed extension to the property. The parties later established a Line of Credit and borrowed a further $40,000 to assist with the ongoing extension expenses. The repayments for both loans were met from the D Street rental payments.
The wife says that she was unhappy with the decision to move from D Street. She enjoyed the immediate support from her parents who lived directly across the road, but felt pressured by the husband to move away. The husband agreed that he wanted to move away from the maternal grandparents, as he felt they overly interfered in the parties’ family life. In turn, the husband did not want to commence renovations so quickly, but says he felt pressured by the wife and her family.
Whatever the negotiations and disagreements may have been between the parties, the reality is that they jointly decided to move from D Street into B Street and then commenced the renovations.
The wife agrees that the sum of $70,000 from the home loan and $40,000 from the Line of Credit were directed towards the extension but gave evidence that these funds were expended on “the initial build”. It is the wife’s evidence that her parents made further financial contributions to the additional cost of the renovations. She estimates that her parents gifted a further $126,000 to finish the extension and these funds were used as follows: [10]
[10] Wife’s trial Affidavit, para.48. Note these figures total $125,000.
·New kitchen, laundry and bathroom E$50,000
·Carport and veranda E$20,000
·Wooden flooring E$7,000
·Roof of extension E$20,000
·Internal painting E$5,000
·Curtains E$3,000
·Windows, doors, driveway concreting E$10,000
·Plumbing E$10,000
The husband initially denied that there had been any further contributions from the wife’s parents but ultimately conceded that his father-in-law contributed the sum of $23,000 to enable the carport and veranda to be completed and a further $12,000 for driveway concreting. These concessions were only made by the husband during cross examination.
Given the husband’s evidence on this topic, I consider it likely that the wife’s parents provided other financial assistance towards the renovations in excess of the $30,000 conceded by the husband. However, I am unable to allocate a precise amount beyond $30,000, in the absence of any financial records presented by the wife.
THE PARTIES’ FINANCIAL CONTRIBUTIONS DURING THE MARRIAGE
Both parties were employed during the marriage. The husband initially worked full time with V Company. The parties then established the company W Pty Ltd and were co-directors of the company. The husband effectively worked through that entity as a transport worker with K Company and various other companies. The wife assisted with book-keeping for the company.
The wife argues that the husband rarely made any financial contribution to the family but I am satisfied that both parties directed their earnings to the benefit of the family. She further contends that the husband was unemployed for periods of time during the marriage, but I am satisfied any such periods would have been brief as he made the transition from one employer to another. The husband concedes that he was out of work for the period mid-2018 to early 2019, following health problems. The wife claims that the husband was out of work for nine to twelve months at this time, but I prefer the husband’s evidence on this topic. The husband has remained in full time employment since that episode.
As discussed earlier in these Reasons, the wife worked as an administrative assistant before completing her own qualifications. She commenced work with M Company in 2015 where she has continued to work on a part time basis, for approximately 30 hours per week. In addition to her salary, she also receives rental income from the D Street property, which was a substantial financial benefit to the family across the years.
The wife gave evidence that her parents paid all the expenses associated with D Street, including any renovations and maintenance across the years. The husband argues that the wife did not disclose the rental records or outgoings regarding D Street and I accept there is no confirmation of the wife’s claim in this regard.
THE PARTIES’ NON-FINANCIAL CONTRIBUTIONS DURING THE MARRIAGE
The wife claims that the husband did not make any substantial contributions to the welfare of the family during the marriage, arguing that he only looked after himself and did nothing to improve the family’s living circumstances. I take into account the wife’s criticisms but note the father’s Affidavit sets out his contributions in some detail and I accept his evidence.
I am satisfied both parties made significant direct and indirect non-financial contributions throughout the marriage. The husband concedes that the wife was the primary caregiver and homemaker during their married life together, but he also made a parenting contribution as well, particularly during the period of the wife’s post-natal depression.
The husband acknowledges that the wife’s parents also assisted during that time and continued to provide practical support to the family throughout the marriage, especially when the children were younger. The husband complains that the maternal grandmother was intrusive, but I am satisfied her assistance benefitted the whole family, particularly the wife.
Both parties are critical of the other parent’s attitude to the children’s schooling, particularly regarding X. I do not intend making any findings about these matters as there is no independent evidence to support either party’s allegations.
The wife has continued in the role of primary caregiver to both children since the parties separated in August 2021. The older child Mr J is now over the age of eighteen. He is studying at university and works part time, but X is only fifteen years old and the wife’s contribution as X’s primary caregiver is ongoing.
The wife argues that the husband’s conduct towards her during the marriage was abusive and undermining, which made her parenting and domestic contributions more difficult. Her sister and brother-in-law evidence supported her allegations, but I attach limited weight to their evidence, given their obvious hostility towards the husband. I accept that the wife felt unsupported by the husband, but the evidence before me is not sufficient to conclude that his behaviour made her contributions substantially more difficult.
CONCLUSIONS REGARDING THE PARTIES’ CONTRIBUTIONS
As discussed by the Full Court in Jabour v Jabour[11], the Court must maintain a holistic approach when assessing each party’s contribution and be careful not to “quarantine” an initial contribution or consider it as separate to the other contributions made during the marriage. In the earlier decision of In the Marriage of Pierce[12] the Full Court also said:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife.”
[11] Jabour v Jabour [2019] FamCAFC 78
[12] In the Marriage of Pierce [1998] FamCA 74
In considering the evidence before me, the husband made a modest initial lump sum contribution but it was the early gifts of real estate from the wife’s parents that provided the springboard and enabled the parties to establish themselves financially in the years that followed. As discussed above, the Court must take care when assessing the weight to be placed upon one party’s initial contribution and should assess that contribution within the matrix of all contributions by each party. Considering all of my findings in relation to the parties’ contributions, financial and non-financial, direct and indirect, I conclude that the wife’s contributions in these proceedings should be assessed at 62% and the husband’s contributions should be assessed at 38%.
SECTION 75(2) FACTORS – FUTURE NEEDS
(a) - age and state of health of each of the parties and
(b) - the income, property and financial resources of each party
The husband is 50 years old. He deposes to suffering from a medical condition, and anxiety but no medical evidence has been presented in relation to any of these conditions. Despite these health issues, the husband continues to works full time and earns $1,211 per week. He anticipates that he will continue working full-time and is hopeful of securing a better paid position into the future.
The wife is 48 years of age. She has provided no evidence regarding her health and I accept she is able to continue in the paid workforce. The wife earns $1,098 through her employment as an administrative assistant together with $400 per week gross from her rental property.
Both parties will retain the property and financial resources allocated to them through these proceedings.
The parties were married for over 24 years. Neither party is cohabiting in a new relationship. Both the husband and the wife are endeavouring to live within their income and to maintain a modest standard of living, based on their respective financial circumstances. The husband has been residing with his parents and has not incurred any accommodation expenses in the period since separation.
(c) – care and control of the child of the marriage; (l) - protecting a parent’s role as parent; and (na) - child support arrangements
The child X continues to reside with the wife on a full-time basis. X attends N School at Suburb Y and is currently in year 10. The mother is committed to her role as X’s parent and wishes to continue in that role until X reaches the age of eighteen years. X and her older brother spend limited time in their father’s care, generally for a family meal once or twice a week, together with the paternal grandparents.
The husband contributes the sum of $1,000 per month towards X’s support by way of an informal agreement between the parties, however he gave oral evidence that he may reconsider that financial contribution once these proceedings are finalised. The husband proposed that X’s support should then be managed through an application for Child Support. I note that the husband has not yet made such an application, but his evidence has now given the wife a sense of uncertainty regarding his ongoing commitment to X’s financial support. I would encourage him to continue these payments until the Child Support Agency has properly assessed child support between the parties. To do otherwise would leave X with no financial support from her father and that cannot be in the child’s best interests.
Once X has reached eighteen years of age there is no legal obligation for either party to contribute to her financial support, but X is likely to remain living with her mother and inevitably the wife will be providing accommodation and a degree of financial support to X until the child completes her further education or enters the paid workforce.
In circumstances where the wife remains substantially responsible for X’s day to day care the husband concedes it is appropriate that there be a modest adjustment in the wife’s favour. This adjustment reflects the wife’s financial support for X and the day to day parenting obligations that the wife has met since the parties’ separation.
Taking into account all of the above I conclude that a further adjustment of 3% in the wife’s favour is appropriate.
CONCLUSION
The parties’ net non-superannuation asset pool is valued at $2,011,505. Based on the reasons discussed above, the husband would be entitled to retain 35% of the net asset pool, to the value of $704,027. As set out in the table below, the husband already retains assets to the net value of $55,169 and therefore requires a further cash settlement in the sum of $648,858.
The wife would be entitled to retain 65% of the net asset pool, to the value of $1,307,478. The table sets out the assets presently retained by her, less the settlement sum to be paid to the husband, in the sum of $648,858.
Respondent wife to retain
Assets
Property at B Street, Suburb C
$1,150,000
Property at D Street, Suburb C
$950,000
Motor Vehicle 4
$20,000
Motor Vehicle 3
$16,000
Personal savings, furniture, personal effects and jewellery
Nominal
$2,134,900
Less Liabilities
Westpac First Mortgage
$135,546
Westpac Second Mortgage
$43,018
($178,564)
$1,956,336
Less
Settlement sum due to the Applicant husband
$648,858
Net assets retained by wife
$1,307,478
Applicant husband to retain
Motor Vehicle 2
$40,000
Motor Vehicle 1
$16,000
Personal account
$1,169
$55,169
Plus
Settlement sum due from the Respondent wife
$648,858
Net assets retained by husband
$704,027
SUPERANNUATION
The total superannuation pool is valued at $224,396. The husband proposes that the pool should be divided equally between the parties, with a splitting order in the wife’s favour in the sum of $36,864. There are no contribution factors that affect my determination regarding the superannuation pool.
The wife is opposed to a superannuation splitting order and would prefer an outcome where the husband retains all of his superannuation and she pays a lower cash settlement sum. Understandably, the husband takes a different view, arguing that he will be relying upon the settlement sum to re-house himself and therefore promotes the superannuation splitting order.
The parties are close in age and they will both continue in the paid workforce for some years yet. Both parties will benefit from the long-term financial security that is provided through superannuation. The wife’s capacity to build up her superannuation entitlements is limited, given she is working part time. I conclude that the superannuation pool should be divided equally between the parties.
I will make an order to the effect that each party retain 50% of the current superannuation pool. This will require a superannuation splitting order in the wife’s favour, in the sum of $36,864.
CONCLUSION
The wife sought to retain 90% of the net asset pool, based on the significant financial assistance received from her parents, but the Court’s obligation is to make orders for property settlement that are just and equitable to both parties. Her direct financial contributions were significant, but the Court must also give appropriate weight to the contributions made by both parties throughout the marriage. My assessment of the parties’ contributions and their future needs has resulted in the parties’ net non-superannuation asset pool being divided 65/35% in favour of the wife and I am satisfied this represents a just and equitable outcome.
The Court should consider the impact of the proposed orders. The wife may be able to access funds from other sources, but it is possible that she will need to sell D Street to pay out the husband’s settlement, in the sum of $648,858.
D Street is an investment property and the wife will be required to pay capital gains tax (“CGT”) in the event D Street is to be sold. As discussed by the Full Court of the Family Court in Rosati v Rosati,[13] if the Court considers that the sale of an investment asset is inevitable or would probably occur in the near future, then allowance should be made for any CGT liability when calculating the net value of that asset. This issue will not arise if the wife is able to retain D Street and pay out the husband from other sources.
[13] Rosati v Rosati [1998] FamCA 38 at para 6.36
No evidence was presented to the Court regarding this issue, and the Court re-listed the matter to consider whether further evidence or submissions were required. The hearing came on before me on 21 November 2023. Counsel for the husband appeared, as did the wife in person. The Court sought submissions from each party regarding the impact of any CGT that may be payable in the event the D Street property was sold.
Counsel for the husband noted that the wife is the legal owner of the D Street property and therefore any eventual CGT would be calculated against her. Nonetheless the husband properly conceded that any CGT should be treated as a joint matrimonial debt and that each party should be responsible for paying one half of that debt.
The wife was unable to make any meaningful submissions regarding payment of any potential CGT liability. She was visibly distressed and unable to contemplate an outcome that may require sale of either property.
The husband’s position reflects a just and equitable resolution of this issue, as it ensures that the parties share responsibility for this liability, as if it falls due.
If D Street is to be sold then the parties will need to obtain prompt accounting advice to calculate the CGT liability arising from the sale. Hopefully the wife’s accountant will be able to assist in this regard. Assuming the CGT can be properly calculated prior to the settlement date, the husband should pay his half share of the debt to the wife from his own settlement sum, to ensure the debt is shared equally between the parties.
In the event the CGT liability can only be estimated by the settlement date, then I conclude that a sum equivalent to one half of the estimated CGT should be retained in the husband’s lawyer’s trust account, pending the CGT being confirmed. This allows the husband to access the bulk of his settlement sum but ensures that his estimated CGT contribution is preserved.
To conclude, the wife is retaining assets of significantly greater value and has the advantage of retaining ownership of real estate. The husband will be looking to enter the real estate market and purchase a home but will have a substantial deposit to assist him in that regard. Both parties will continue in paid employment for some years yet.
Taking into account all of my findings, I now make orders as published at the commencement of these Reasons. I am satisfied these orders reflect a just and equitable outcome between the parties.
I certify that the preceding one hundred and eight (108) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Kelly. Associate:
Dated: 20 December 2023
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