Marley and Finch

FAMILY COURT OF AUSTRALIA

MARLEY & FINCH

[2010] FamCA 985

FAMILY LAW – PROPERTY – treatment of monies paid to wife by Victims Compensation Tribunal – superannuation payout received by the husband by reason of partial invalidity and use of those funds – post separation contributions – children of the marriage currently solely cared for by the wife with the husband having no face-to-face contact – income earning capacity of each party – COSTS – application for payment of the Independent Children’s Lawyer

Family Law Act 1975 (Cth)

APPLICANT:

Ms Marley

RESPONDENT:

Mr Finch

INDEPENDENT CHILDREN’S LAWYER:

Mark Whelan, Lawyer

FILE NUMBER:

SYC

3419

2008

DATE DELIVERED:

8 November 2010

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Justice Fowler

HEARING DATE:

6-9 September 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Foster

COUNSEL FOR THE RESPONDENT:

Ms Conte-Mills

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER:

Mrs Stolier

Orders

Within 28 days from the date of these Orders:
(a)the husband do all acts and things and sign all documents necessary to transfer to the wife all his right, title and interest in and to the property situated at and known as B in the State of New South Wales, being the whole of the land comprised in Computer Folio Identifier … (“the B property”)
(b)concurrently with the transfer referred to in Order 1(a) herein the wife will secure the release of the husband from his obligations pursuant to any loans with the Commonwealth Bank secured on the B property.
The husband as against the wife be declared the sole owner of the property situated at and known as C property and the wife is to quit any claim thereto.
Within 21 days from the date of these Orders:
(a)the wife shall do all acts and things necessary to transfer to the husband at the husband’s cost her share in the company known as D Pty Ltd and the husband shall be responsible for preparing all documentation to give effect to this Order
(b)the wife shall pay or cause to be paid to the husband or as he may direct the sum of $370.85.
The husband as against the wife be declared the owner of his military memorabilia, his tools and personal effects stored in the trailer at the B property and the wife will within 21 days from the date of these Orders return the military memorabilia to the husband through a third party nominated by the husband and acceptable to the wife.
Other than as herein provided the husband and the wife each be declared the owner at law and in equity of all items of personalty including but not limited to money, proceeds of bank accounts, jewellery, and personal effects presently in their respective possession and control.
The husband and the wife each be declared the owner of such superannuation/annuity entitlements, and personal benefits to which they are or might become entitled in their own right.
Except as otherwise provided herein, the husband and the wife remain liable for any debts in their own name at the date of these Orders and in this respect shall indemnify and hold harmless the other from any liability in relation thereto.
Leave is given to the Independent Children’s Lawyer to re-list the matter within seven (7) days by arrangement with my Associate in relation to the payment of the costs of the Independent Children’s Lawyer. In the event that the matter is not re-listed then there will be no order made for the payment of the Independent Children’s Lawyer’s costs.
If either party refuses or neglects to sign within fourteen (14) days of a written request to do so any documents necessary to effect the terms of these Orders, a Registrar or such other officer or person as may be appointed by the Family Court of Australia is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act 1975 (Cth) to execute such documents on behalf of such party.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 3419 of 2008

MS MARLEY

Applicant

And

MR FINCH

Respondent

And

INDEPENDENT CHILDREN’S LAWYER

REASONS FOR JUDGMENT

Introduction

The proceedings before the Court were commenced as proceedings in which both parenting orders and orders for the alteration of interests in property were sought.
During the course of the hearing the issues in relation to parenting were resolved by agreement and as a result of that agreement the three children of the marriage reside with the mother and the father has limited contact with them, and which for the time being does not involve face-to-face contact.
The Court is asked to make orders in these circumstances only for the alteration of the parties’ interests in property where is seems that for some time at least the burden of ongoing care for the children presently aged 14, 12 and 9 years will continue to borne by their mother.
The assets are not of great value and the ability of the Court to provide a just result which will enable these parties to live with dignity in the future is tested. Initially included in the balance sheet of assets were monies paid to the wife by the Victims Compensation Tribunal and a contingent liability of the husband to that Tribunal for an amount equivalent to that provided to the wife in respect of an assault upon her by the husband.
The wife is claiming between 85% and 90% of the available assets and the husband says that an appropriate division is 60% in favour of the wife. The husband has suffered major post traumatic stress disorders and presently receives a disability pension and has a claim for a lump sum compensation which is not yet determined. In addition, it has been suggested that he may have a claim which surpasses the threshold in damage for compensation arising out of an incident when he was assaulted at a school during his employment there as a teacher. There is, however, no evidence before the Court which would confirm that such a claim exists. Certainly whilst there is evidence of a claim under the workers compensation legislation for a lump sum there is unfortunately no evidence as to whether a claim could be sustained under the general law in relation to the husband’s injuries arising from that incident.
The ultimate problem facing the Court in this matter is what award is required to do justice between these parties in accordance with the provisions of the Family Law Act 1975 (Cth) (“the Act”).

Background Facts

Where in this judgment I make statements of fact they are, unless otherwise specified, my findings of fact.
In 1962 the husband was born and is presently 48 years of age.
In 1970 the wife was born and is presently 40 years of age.
In March 1992 the parties commenced cohabitation. At that time the husband was employed as a teacher and the wife was employed as a secretary. The husband asserts and the wife does not admit that the husband had at that time accumulated savings of some $30,000.
In 1993 the property at B (“the former matrimonial home”) was purchased. The wife’s evidence is that it was purchased for $165,000 and subject to a mortgage from the Commonwealth Bank of $145,000. The balance was funded from the husband’s savings and during the marriage the parties undertook improvements to the property. The husband’s evidence is that the property was purchased for $169,000 and that the husband used his savings of about $30,000 towards the purchase price.
In April 1995 the parties were married.
In mid 1995 the wife was involved in a car accident and in 1997/1998 received the sum of $30,000 in compensation on the husband’s assertion and the sum of $22,500 on the wife’s assertion. The wife says she applied the sum of $22,500 to the repayment of the mortgage that had been raised.
In March 1996 the parties’ eldest child, N, was born. He is currently in Year 8 at a Christian school in B.
In July 1998 the parties’ second child, L, was born. She is currently in Year 6 at B Public School.
In 1999 the husband ceased work full time as a teacher and thereafter worked on a part time basis.
In 1999 the husband was involved in a motor vehicle accident and eventually received compensation for his loss arising out of the accident in the sum of $130,000, after payment of out-of-pocket expenses and legal costs.
In 1999 the wife’s parents commenced to give the wife the sum of $100 per week over the next five years totalling about $26,000.
Between 1999 and 2000 the husband, unable to work full time because of his accident, supervised renovations to the home.
In 2000 the husband undertook work at a school on a graduated basis to a maximum of four days per week. That arrangement continued until 2005. In November 2005 the husband was assaulted at school and left his employment at the school and has not worked as a teacher since that time. During 2006 the husband received workers compensation payments of $500 per week.
In August 2001 the parties’ youngest child, H, was born. She is presently in Year 3 at B Public School.
By 2004 the wife asserts that her grandmother had gifted to the parties a total sum of $27,500.
In 2004 the wife received $5,000 from her grandfather’s deceased estate.
In 2004 the husband asserts that he received a workers compensation verdict in the sum of $130,000 and that he applied that sum in reduction of the mortgage.
In 2004 the wife’s parents gifted to her a Holden Calais said to be worth $4,000.
In 2005 the parties installed a new kitchen in the former matrimonial home.
In 2005 the wife received the sum of $7,500 from her grandmother’s estate.
In 2006 the parties constructed a three carport at the former matrimonial home.
In May 2006 the wife was diagnosed with early breast cancer which was treated and is in remission and in respect of which the wife makes no claim as to any possible detrimental effect on her earning capacity.
In May 2007 the parties purchased a rural property at C, for the sum of $111,000 with the sum being financed against the former matrimonial home as security.
In May 2007 the wife informed the husband that she considered the marriage to have irretrievably broken down and the parties continued to occupy the matrimonial home.
Between February and August 2007 the husband worked as an administration officer.
In August 2007 there was a dispute between the parties. The wife assaulted the husband and the husband assaulted the wife and he was arrested and charged. As a result of that assault the wife suffered, inter alia, a perforated ear drum which has left her with a permanent hearing loss and the loss of the use of one of her kidneys.
In November 2007 the husband was convicted of inflicting grievous bodily harm in the Local Court on a plea of guilty and sentenced to a term of imprisonment of 18 months with a six month non parole period.
On appeal that sentence was subsequently suspended and the husband was released from gaol on 11 December 2007.
On 15 October 2008 the parties divorced.
In May 2009 the wife received $50,000 compensation from the Victims Compensation Tribunal.
Between August 2007 and the date of the hearing the wife received significant monetary gifts from her parents which were applied towards her legal costs and living expenses. At the date of hearing those gifts were in the order of $70,000.
The wife also received income by way of government assistance. The wife has applied for her own use money which she procured from the sale of plants, some of which were apparently rare and which were valued at approximately $31,000. She also withdrew from a bank account monies deposited to that account on behalf of the husband amounting to $13,700 on the assertion of the husband and the sum of $9,220 on the assertion of the wife. The documents before the Court were incomplete and I accept the evidence of the husband in relation to the sums withdrawn.
On or about 28 July 2008 the husband withdrew his superannuation entitlements, and on that date they amounted to $165,598 of which amount he spent a sum of $83,000 on overseas trips and the balance on living expenses and legal costs. Of the sum withdrawn the husband has the sum of $8,315 remaining.

Property matters

The first step I must undertake is to identify the property of the parties or either of them available for division between them.
At the hearing the Court was provided with the balance sheet set out hereunder for its consideration:

The Balance Sheet

Assets	Wife’s Value ($)	Husband’s Value ($)
[B property] (joint)	500,000	500,000
[C property] (h)	90,000	90,000
Commonwealth Bank of Australia (w)	1,333	1,333
Commonwealth Bank of Australia being balance funds received from the Victims Compensation Tribunal (w)	0	26,819
Commonwealth Bank of Australia (h)	0	0
Holden Commodore funded by parents (w)	0	0
1997 Ford Falcon (h)	2,000	2,000
Military Memorabilia (h)	6,576	6,576
1986 Mazda car (h)	600	600
Total	$600,509	$627,328
Add backs claimed
Husband’s paid legal costs (h)	NK
Husband’s Cash Superannuation payout (h)	38,598
Husband’s superannuation rollover (h)	127,000
Total	$165,598.00	NK
Liabilities
Home mortgage (joint)	150,000	150,000
Visa Card (h)	Nil
Unpaid Legal fees/personal loans/Victims Compensation Tribunal debt (h)	Nil	90,700
Total	$150,000	$240,700
Superannuation
S.A.S.S. (August 2010) (h)	7,144	7,144
MLC Super at 03.09.2009 (h)	1,171	1,171
Total	$8,315	$8,315
Nett Asset Pool (inclusive of superannuation)	$624,422	$394,943

At the conclusion of the hearing the husband’s counsel proposed that the following should be regarded by the Court as the assets available for division, namely:

($)
Former matrimonial home	500,000
Land at [C]	90,000
World War I memorabilia	6,576
Remaining Superannuation not spent	8,315
Add back the amounts received by the wife post separation from the husband’s salary deposited to a joint account	13,700
Add back the plants of the husband sold by the wife post separation as at the value ascribed to them	31,045
Add back the amount of the husband’s superannuation accumulated during the marriage and taken and spent on overseas trips post separation	83,000
Total	$732,636
Less mortgage secured on the former matrimonial home	150,000
Nett assets	$582,636

The wife proposed that the balance sheet should contain neither the amount of the compensation payment to her or the contingent liability of the husband to the Victims Compensation Tribunal.
I have come to the conclusion that I cannot ignore the amount held and the contingent liability but propose that they be dealt with as a separate pool.
In respect of that separate pool the wife has received compensation for pain and suffering and permanent disability by reason of the actions of the husband. The nature of the asset is such and its origins are such that it is neither just nor equitable that the husband should be entitled to make any claim to that asset. In addition, it is not in my view appropriate that its existence should be taken into account in my consideration of the factors under section 75(2). To do so would be an affront to justice.
In relation to the contingent liability to the Victims Compensation Tribunal the husband was rendered exposed by his own actions to that contingent liability by reason of illegal acts. In the circumstances it would be neither just nor equitable for that liability in any way to be shared by the wife. To even take it into account in a consideration of the matters required to be considered under section 75(2) would also be an affront to justice.
Accordingly, I propose to order that the wife retain ownership of the asset comprising the award of her compensation and that the husband bear solely any liability which coalesces as a result of the award of that compensation to the wife and a claim against him by the Victims Compensation Tribunal.
The wife proposed that the husband’s superannuation payout by reason of partial invalidity which was received by him on 28 July 2008 be added back into the asset pool. I do not make a habit of adding back non-existent assets to a balance sheet except in the case of costs and partial property settlements and it is not my intention to commence such a practice in this case. I will, however, take into account the husband’s use of any of the funds not added back in my considerations under section 75(2). I note that the husband’s evidence in relation to that sum in part is that approximately $83,000 was spent on overseas travel and that he proposes that the wife be given credit for that portion of the amount received by him. It seems to me that it can be regarded as a partial property settlement and by reason of the parties’ consent and on this basis I will add that sum back into the balance sheet.
As to the balance I have determined that the consideration of the treatment of that sum will come into discussion and determination in my considerations of the issues arising under section 75(2).
The sum otherwise claimed by the husband as his liability is not on the husband’s submission to be taken into account in the balance sheet and I accept the husband’s proposal in that regard.
The husband proposes that the monies received by the wife from a plant collection of his sold by her post separation be added back. I decline to do so for the reasons outlined above but will take the proceeds of such sale into account in the determination of post separation contributions. I will similarly take into account the post separation contributions of the husband in the form of income paid to the credit of the joint account of the husband and which the wife accessed post separation.
I accordingly find that the assets of the parties available for distribution are as follows:

Assets	($)	($)
B property	500,000
C property	90,000
Military memorabilia	6,576
Remaining superannuation not spent	8,315	604,974
Add backs
The amount of the husband’s superannuation accumulated during the marriage and taken and spent on overseas trips post separation	83,000
Superannuation
Nil	0
Total Assets (including superannuation)	$687,891
Liabilities
Mortgage secured on the former matrimonial home	150,000
Total Liabilities	$150,000
Net Assets (including superannuation):	$537,891

Section 79(4)

Contributions to date of separation

The overall contributions to the date of separation were not the matter of great debate. The wife proposed that they be treated as equal and I think that on a consideration of the evidence that is a justifiable position and I so find. There was not any great demur from the husband to such a proposal.

Contributions post separation

In this area there is some dispute. It is clear that the wife received some $62,500 from her parents post separation, in addition to the provision of a motor vehicle. Some of that was spent on legal costs and some on the welfare of the children. Those payments were not loans but were gifts. To the extent that they benefited the wife and the children they are taken into account as contributions made on behalf of the wife post separation.
The husband however also made a contribution to the household of the wife and the children in the proceeds of sale of the plants. I do take that into account as a post separation contribution.
It is said that the husband had income credited to an account in the amount of $13,700, or thereabouts and which was accessed by the wife without his consent. The wife asserts that that sum was applied to her expenses and those of the household. Notwithstanding that use, I regard them as a post separation contribution made by the husband.

Conclusion based on contribution

All in all I assess the contributions directly and indirectly of the parties to the acquisition, conservation and improvement of the property of the parties to the marriage or either of them, including such property which is no longer the property of the parties to the marriage or either of them, and thus contributions to the welfare of the family to be 55% to the wife and 45% to the husband to the date of the hearing.

Section 75(2) considerations

The wife says that she has had breast cancer. It is not asserted that she presently has breast cancer nor is it suggested that that former condition in any way has left her incapacitated as an employee. The wife does however say that her health remains uncertain.
The husband is aged 48 years and is unemployed and presently in receipt of a disability pension. He has involved himself in extensive self-prescribed therapy in the form of training in art. Some two pieces of his work have been accepted by a local gallery although at the time of hearing have not yet been sold. Whatever the future commercial viability of his art it is clear that it does not presently present a stable income for him.
It is suggested that he will never gain an income from it and that his pursuit of training in the field has been a waste. It seems to me that is a suggestion that I could not rely on for the future. It is notorious that many artists have slow starts. Having said that, it is clear that the husband’s skill as an artist does not presently afford him financial benefit but does it seems afford him some relief from the mental turmoil from which he has been suffering as a result of his Post Traumatic Stress Disorder.
It seems clear from the evidence that in Australia and certainly in the public school system it is unlikely that he will ever work again. Indeed he has been identified by that system as “not to be employed”. This followed his conviction for the assault perpetrated on the wife.
Whether he can gain employment in the private education sector as a child or adult teacher is not known.
One assumes that if the same information was given to the private sector as has been given to the departments of education it is likely that he would experience a negative response to applications for employment.
That leaves the possibility of employment in the education sector overseas. That might be possible but there is no evidence of the present availability of any such opportunities for this man.
The husband, albeit disabled to a degree, is an intelligent man. He has tertiary qualifications and, in the Court’s view, it is likely that he will be able to gain some employment should he desire to do so. The Court is unable to say what the financial return might be for such employment. The husband has indicated that it is his desire to remain living in C and he points to the fact that the employment market is somewhat closed in that area where you have not been a continuing resident with experience in the areas available for employment there.
The wife is employed in hospitality earning a net income of about $388 per week. She receives means tested benefits from Centrelink. She has no superannuation. The wife has had the benefit of financial assistance from her parents and in the Court’s view it is likely that support, at least to some degree, will continue. For example, the wife’s father indicated that should the Court make it a requirement that the wife pay some amount of money to the husband in these proceedings as a condition of the wife’s sole ownership of the former matrimonial home then that would be found for the wife.
The terms of the resolution of the parenting issues in this matter provide that the wife will have the ongoing care of the children and that at least for the time being the husband will not have face-to-face contact with them. Although this may change in time it seems likely that the charge of the children’s ongoing care is likely to be a responsibility which will act as a brake upon the wife’s capacity to earn an income, having regard to her responsibilities to them.
The terms of the order made do not prohibit other non face-to-face contact between the husband and the children. Although it seems likely that for some time at least the wife will have the children as her sole burden the present position of the husband is such that he will be unlikely in the short term to make any significant financial contribution to their wellbeing and, although not of his initial seeking, little contribution to their wellbeing generally.
Although it is hoped that a way can be found to alter this situation, the Court does take into account that for some reasonable time it seems the mother solely will have the continuing care of the children as between the parents.
Whilst it is also clear that the children’s extended family will stand by to assist the mother in fulfilling that responsibility it will rest significantly on her shoulders and this is a matter which the Court does take into account in determining the issues under the provisions of section 75(2). In a case where the pool is small the dollar value of such a consideration must be substantial.
The justice of the case requires me to take into account that the husband had available to him superannuation which was spent in part on overseas travel. Although I have made allowance for some part of this I take into account that the balance of that fund was also available to his benefit. I accept that some part of that fund was spent on reasonable living expenses.
The justice of the case also requires me to take into account the sale of the husband’s plant collection which was an asset of the parties sold by the wife post separation and the application of those funds by the wife to her expenses. It seems, however, that they appear to have been largely spent on living expenses as have the funds taken by the wife from the parties’ joint account. It is for this reason that I have taken them into account as a post separation contribution made by the husband to the wife’s household and not under section 75(2).
The husband has responsibility for the payment of legal fees as does the wife. In the wife’s case, however, she has so far had available to her the generosity of her parents to meet such payment. Nevertheless, there will be demands on her for the future payment of fees which no doubt will also be the case for the husband.
The wife in her written submission says she proposes that as at the date of separation the parties’ contributions should be treated as equal but that an allowance for the reasons referred to above should be made to her in the distribution of the available assets. She seeks a division of 85:15 in her favour.
The husband in his submission says that the assets should be divided in the proportion 60% to the wife and 40% to him.

Conclusion on section 75(2)

For all the reasons referred to above and in particular in the circumstances where the wife is going to have the continuing major economic burden of the children for a time both directly and in the inhibition of her earning capacity, I think that an allowance should be made in her favour additional to that found by way of contribution of 10%.

Overall division of assets

The above determination will see the wife receive 65% of the parties’ assets and the husband receive 35%.

Just and equitable

The division of assets would see the wife receive $349,629.15 worth of nett assets and the husband receive $188,261.85 worth of assets.
This division will provide to the husband minimal but available continued residence in a property in which he lives. It is a property on which is built a shed which he occupies. It seems to me that it is just and equitable in all the circumstances that the husband should at a minimum be allowed to retain his residence as the wife is able to retain the residence occupied by herself and the children.
In the circumstances of this case I determine that result to be just and equitable.

Orders which should be made

I propose orders which will give effect to the following division.
The wife will receive:

Assets	($)	($)
B property	500,000
Total Assets (including superannuation)	$500,000
Liabilities
Mortgage secured on B property	150,000
Payment from wife to husband	370.85	150,370.85
Total Liabilities	$150,370.85
Net Assets (including superannuation)	$349,629.15

The husband will receive:

Assets	($)	($)
C property	90,000
Military memorabilia	6,576
Remaining superannuation not spent	8,315
Payment from wife to husband	370.85	105,261.85
Add backs
The amount of the husband’s superannuation accumulated during the marriage and taken and spent on overseas trips post separation	83,000
Total Assets (including superannuation)	$188,261.85
Liabilities
Nil	0
Total Liabilities	0
Net Assets (including superannuation)	$188,261.85

Costs of the Independent Children’s Lawyer

On 9 September 2010 an ex tempore judgment was delivered in this matter in which it was noted that an application was before the Court for orders for the payment of the costs of the Independent Children’s Lawyer in the sum of $11,189, being $5,594.50 payable by each party. In relation to that application I reserved my decision until the conclusion of the property proceedings.
Having considered the current financial position of both the husband and the wife as a result of these property orders, it is my preliminary view that I should decline to make any order for the payment of costs of the Independent Children’s Lawyer, given the parties’ financial circumstances. It is as I say a preliminary view only.
I give leave to the Independent Children’s Lawyer to re-list the matter within seven (7) days by arrangement with my Associate, if she seeks to dissuade me from that view. In the event that the matter is not re-listed there will be no order made for the payment of the Independent Children’s Lawyer’s Costs.

I certify that the preceding eight-seven (87) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler delivered on 8 November 2010.

Associate:

Date: 8 November 2010

[2010] FamCA 985

8 November 2010

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Costs

Remedies

Jurisdiction

Procedural Fairness