Marks and Xander
[2016] FCCA 282
•15 February 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MARKS & XANDER | [2016] FCCA 282 |
| Catchwords: FAMILY LAW – Property – significant initial contribution. |
| Legislation: Family Law Act 1975, ss.75(2), 79 |
| Stanford & Stanford [2012] HCA 52 Kearney & Kearney [2012] FMCAfam 187 Brandow & Brandow [2010] FMCAfam 1026 Condie & Quirke [2012] FamCA 567 Aleksovski v Aleksovski [1996] FLC 92-705 R v Phan [2015] HCA 39 |
| Applicant: | MS MARKS |
| Respondent: | MR XANDER |
| File Number: | MLC 8149 of 2014 |
| Judgment of: | Judge Riethmuller |
| Hearing date: | 26 October 2015 |
| Date of Last Submission: | 26 October 2015 |
| Delivered at: | Melbourne |
| Delivered on: | 15 February 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr Barbayannis |
| Solicitors for the Applicant: | Galbally & O’Bryan |
| Counsel for the Respondent: | Mr Indovino |
| Solicitors for the Respondent: | Jafer Lawyers |
ORDERS
Within 60 days of the date of these Orders ("the date") the Respondent pay to the Applicant the sum of $176,463.00 ("the sum").
Contemporaneously with the payment of the sum the Applicant cause to be removed the caveat lodged on her behalf over the property at Property C ("the Property C property").
In the event of default of payment of the sum by the date interest shall accrue on so much of the sum as remains outstanding at the rate prescribed by the Family Law Rules 2004 adjusted monthly from the date.
In the event that the Respondent fails to pay the sum to the Applicant by the date the Respondent shall do all necessary acts and things to cause the Property C property to be placed on the market for sale ("the sale") on terms and conditions to be agreed by the parties within 14 days of the date of these Orders and failing agreement as determined by the President of the Real Estate Institute of Victoria.
The agent and the conveyancer in respect of the sale to be as agreed between the parties and failing agreement as determined by the President of the Real Estate Institute of Victoria.
Upon completion of the sale, the Respondent do all necessary acts and things to cause the proceeds of the sale be applied:
(a)first to pay all costs, commissions and expenses of the sale;
(b)secondly to pay so much of the sum as remain together with interest to the Applicant;
(c)thirdly the balance to the Respondent.
Pending the payment or completion of the sale:
(a)the Respondent have the sole right to occupy the Property C property and the Respondent pay all rates and taxes and like apportionable outgoings of that property as they fall due;
(b)the parties hold their respective interests in the Property C property upon trust pursuant to these Orders; and
(c)neither party encumber the Property C property without the consent in writing of the other party.
The Applicant be solely entitled to her interest in the property in (country omitted).
Subject to compliance with Order 1 and Order 3, if applicable, the Respondent be solely entitled to his interest in the Property C property.
Orders 11 to 13 of these Orders are binding on the trustees of the (omitted Super Fund) ("the Fund").
Pursuant to section 90MT(1) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the superannuation interest of the Respondent (member number (omitted)) in the Fund, the Applicant shall be entitled to be paid an amount calculated in accordance with the Family Law (Superannuation) Regulations2001, using a base amount in the sum of $10,505.00, and there be a corresponding reduction in the entitlement the Respondent would have had in the Fund but for this Order.
For the purposes of Order 11 these Orders have operative time.
The operative time is the fourth business day after which a sealed copy of these Orders is served on the trustee by the applicant together with a notice under regulation 72 of the Family Law (Superannuation Regulations 2001.
Pending the completion of the superannuation split in the favour of the Applicant the Respondent be and is hereby restrained by himself, his servants or agents from executing, and/or giving to the Trustee a binding death benefit nomination in favour of any person, or doing any other act or thing, which would render any part of, or payment from, his superannuation interest in the Fund a "not splittable payment within the meaning of regulations 12 or 13 of the Family Law (Superannuation) Regulations2001".
The parties have liberty to apply with respect to the implementation of the superannuation splitting orders.
Unless otherwise specified in the Orders and save for the purposes of enforcing any monies due under the Orders:
(a)each party shall be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these Orders;
(b)each party forego any claims they may have to any superannuation benefits belonging to or earned by the other;
(c)insurance policies remain the sole property of the owner named thereon;
(d)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to the Orders;
(e)each party be solely responsible for any credit card incurred in their name;
(f)any joint tenancy of the parties in any real or personal estate is expressly severed.
IT IS NOTED that publication of this judgment under the pseudonym Marks & Xander is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 8149 of 2014
| MS MARKS |
Applicant
And
| MR XANDER |
Respondent
REASONS FOR JUDGMENT
The applicant and respondent were in a de facto relationship between February or March 2000 and 18 July 2013. The applicant de facto wife is 54 years of age, having been born in (omitted) 1961. The respondent de facto husband is also 54, having been born in (omitted) 1960. There are no children of the relationship. The length of the relationship was 13.5 years.
At the hearing of the matter the parties were able to agree upon the joint asset pool, which comprised of the following:
asset
value
Property C property
$630,000
(country omitted) property
$61,000
De facto wife’s savings at separation
$50,000
De facto husband’s savings at separation
$143,500
Total non-superannuation: $884,500
De facto husband’s superannuation
$73,340;
De facto wife’s superannuation
$19,749;
Total superannuation: $93,089
Total combined asset pool: $977,589.
There is no question in this case that the wife no longer has access to nor the use of the property at Property C in which the parties had been living. As a result it is apparent that it is just and equitable that there be property adjustment orders: see Stanford& Stanford [2012] HCA 52; (2012) 247 CLR 108; [2012] FLC 93-518; (2012) 293 ALR 70; (2012) 47 Fam LR 481; (2012) 87 ALJR 74.
Whilst there was some dispute as to the contributions of each of the parties at the commencement of the relationship, the matter proceeded on the basis that the parties had both made initial contributions that were substantially equivalent, save that the de facto husband owned the Property C property outright (without any mortgage or encumbrance) at the commencement of the relationship and that the de facto husband must have had some superannuation at the commencement of the relationship.
Throughout the period of the relationship the de facto husband was in employment. The de facto wife was not in full-time employment throughout the relationship and, therefore, made a significantly lower financial contribution. However, from her earnings she was able to purchase a property in (country omitted) in 2006 for approximately $45,000. This property was provided by her to her parents, and now to extended family, on a rent free basis to assist in her family’s standard of living in (country omitted).
Throughout the relationship the parties lived in the house brought into the relationship by the de facto husband. No improvements or alterations were made to this property.
Early in the relationship, on 14 March 2000, the parties entered into a cohabitation agreement. This agreement provided that the de facto wife agreed to make no claim with respect to the Property C property in the event of a breakdown of the relationship, that the parties would maintain their separate bank accounts and that the agreement could be pleaded in bar through any claim one might have against the other “in the Family Court of Australia.”
The separation agreement is clearly not a binding financial agreement as defined by the legislation, and therefore does not preclude the Court from making orders adjusting the property interests of the parties. It is, however, on the authorities, a factor that I take into account.
The parties lived in the Property C home, and each contributed to the household. The parties cooked and cleaned and cared for pets together. The respondent had some health issues over the years, the worst being a gall bladder operation requiring him to take three to four weeks off work.
The de facto husband’s parents lived nearby, and the parties regularly socialised with them. The parties enjoyed spending time at the Crown Casino, and both engaged in gambling, although it is clear from the comparison of their assets to their incomes that only engaged in gambling as recreation. In the period leading up to separation the applicant had taken the respondent’s parents on holiday to (country omitted). The de facto wife believes that the de facto husband has repartnered, although he denies this.
The (country omitted) property was purchased for $45,000, including the costs of purchase, and has not achieved any returns in a financial sense for the de facto wife as it was used by her to support her family. The respondent made no complaint with respect to this during the relationship. The work history of the de facto wife reflects a variety of casual and part-time jobs from (occupation omitted) to (occupation omitted), however, she has not been in employment since 2011, which she says is due to ill health. She is in receipt of a Newstart allowance, not a sickness benefit.
The de facto wife says she performed most of the household tasks such as washing and cleaning and cooking, that the de facto husband did the shopping. They both cared for pets which the de facto wife says included approximately 100 birds, 10 rabbits, three dogs and seven cats. The de facto wife also assisted with the de facto husband’s parents, who are now aged in their 80s.
A difficult question that confronts the Court in a case such as this is assessing the contributions of the parties. It appears that they participated in a thirteen and a half year relationship which involved considerable mutual love and respect. The parties are agreed that the retrospective valuation undertaken of the Property C house shows that it was worth $175,000 at the time the parties commenced cohabitation. There is no question that the use of the unencumbered house brought to the relationship by the applicant was a significant contribution.
The parties proceeded to lead their lives based upon the circumstances in which they found themselves. Had the parties not had the respondent’s property at the commencement of the relationship, it seems likely that steps would have been taken to purchase a property or make other arrangements for their financial security in the longer term.
In this case the parties were able to enjoy a lifestyle, including recreational gambling and pets, holidays and social engagement utilising the income that they had to hand. To have regard only to financial matters would be to overlook the significant non-financial contributions which intimate partners often make to each other when living their life together.
In the circumstances of this case I am not persuaded that I should adopt two separate pools: the Property C house and a pool containing property other than the Property C house. It is not appropriate after thirteen and a half year marriage-like relationship of the nature of this relationship where the house was utilised by both parties through the relationship to treat the parties’ property as entirely separate. Spouses do alter their lifestyles where in a relationship. A couple capable of buying a home would not ordinarily choose to rent. However, a couple in a house they own would commonly enjoy their earnings rather than attempt to purchase more assets – not all of the world is forever grasping for assets accumulations.
It is not possible to make specific findings as to how the applicant’s life would have been different had there been no relationship, but the obvious possibilities show that a simple money based accounting could not produce an appropriate outcome under s.79 of the Family Law Act.
In submissions cases were provided:
a)In the matter of Kearney & Kearney [2012] FMCAfam 187 Roberts FM (as his Honour then was) found that a de facto wife’s contribution over a 12 year relationship involving no children was only 7.5 per cent in a case involving a pool of $2.2 million;
b)In Brandow & Brandow [2010] FMCAfam 1026 Brewster FM found, in a case involving $1.34 million and a relationship of 7 years without children, that the wife’s contribution was 15 per cent; and
c)In Condie & Quirke [2012] FamCA 567 the wife received 30 per cent after a 10 year relationship.
The dangers of looking to a short list of example cases is discussed in Field v Smith [2015] FamCAFC 57 where the Family Court decided a list of comparative cases as a ‘seductive tool’.
Of course in decisions under s.79 like cases must be treated alike, however, the consistency is in the application of principles, and is not synonymous with numerical expression (see R v Phan [2015] HCA 39 at [28]) although as Bell and Gageller JJ, said patterns of outcomes may serve as “yardsticks” (R v Phan at [29] and [47]. Whilst R v Phan was dealing with discretion in a very different context the High Court was nonetheless dealing with the principles applicable to determining the specific outcomes within a broad range. However, it remains dangerous to attempt to rely upon percentages in individual first instance decisions as if they in some way punctuate a discourse on the reasonable range of outcome. With respect to Kearney & Kearney in particular the result at least when presented in a tabular form appears to be outside the range.
The more general principle is well stated in Aleksovski v Aleksovski 135 FLR 131; [1996] FLC 92-705; (1996) 20 Fam LR 894 where Kay J said (at 910):
‘In a short marriage, significant weight might be given to a large capital contribution. In a long marriage, other factors often assume great significance and ought not be left almost unseen by eyes dazzled by the magnitude of recently acquired capital. A party may enter a marriage with a gold bar which sits in a bank vault for the entirety of the marriage. For 20 years the parties each strive for their mutual support, and at the end of the 20 year marriage they have the gold bar. In another scenario they enter the marriage with nothing, they strive for 20 years and on the last day the wife inherits a gold bar.
In my view, it matters little when the gold bar entered the relationship. What is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship. Just as early capital contribution is diminished by subsequent events during the marriage, late capital contribution which leads to an accelerated improvement in the value of the assets of the parties may also be given something less than direct proportional weight because of those other elements.’
On consideration of the matter as a whole I am persuaded that an appropriate assessment of contributions in this case is a 72.5/27.5 in favour of the respondent de facto husband and that the superannuation be treated in the same way as the available assets.
Section 75(2) Factors
In this case the de facto wife is no longer working, which she says is due to ill health. Notably, she is in receipt of a Newstart allowance, not a sickness benefit. It appears more likely that the de facto wife, at age 54 and with few skills for work other than unskilled work, would find it increasingly difficult to obtain employment and realistically may be unable to obtain any significant employment in the future.
The de facto husband works as a (occupation omitted) but is 54 years of age. Whilst he appears to be in secure employment, it is unlikely that he will have a lengthy working life in work that is quite manual in nature.
The de facto husband earns around $47,000 per annum, or around $40,000 per annum after taxation. The applicant de facto wife on social security would receive around $14,000 per annum together with the benefits of a health care card. I note that this is not income tested.
Having regard to the income differential of the parties, and their ages and likely working life, together with the difference in capital as a result of the contributions finding I am persuaded that a five per cent adjustment is appropriate to adjust for s.75(2) factors.
Considering the matter as a whole I find a spilt of 67.5 per cent in favour of the respondent is appropriate. I therefore make orders reflecting a split of the parties’ assets and superannuation of 67.5 per cent to the respondent de facto husband and 32.5 per cent to the applicant de facto wife. As a result, the wife will retain the (country omitted) property ($61,000), the $50,000 she has in savings and receive a payment from the Husband of $176,463, and receive a super split of $10,505 from the de facto husband’s fund.
Given the de facto wife’s age and employment status, inquiries were made in order to ascertain the maximum amount that she could draw from the superannuation fund if the fund were to be split into her name so as to minimise the cash component of the payment that the de facto husband would have to meet to fulfil orders adjusting the parties’ property as indicated.
This appeared to me to be an appropriate method of effecting the settlement so as to allow the de facto husband to retain the Property C property, but ensure that the de facto wife receives access to assets that would be necessary to purchase alternative residence, such as a modest flat or home unit. However, she is 2 years off reaching the preservation age and could therefore only obtain funds under the hardship provisions, making this an impractical method of division in their case.
As a result I simply make orders for the Husband to make a payment to the Wife and adjust the superannuation using the same overall percentages.
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Judge Riethmuller
Date: 15 February 2016
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