MASON & MASON (NO.2)
[2013] FMCAfam 195
•14 March 2013
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MASON & MASON (NO.2) | [2013] FMCAfam 195 |
| FAMILY LAW – Property – application for property settlement – asset pool – contributions by the parties – post separation contributions – whether superannuation splitting order to be made – whether just and equitable. COSTS – Applications for costs – written submissions required. |
| Family Law Act 1975 (Cth), ss.75, 79, 90MT, 106A, 117 |
| Erdem & Ozsoy [2012] FMCAfam 1323 Hickey & Hickey [2003] FamCA 395; (2003) 30 Fam LR 355; FLC 93-143 Kennon v Kennon (1997) 22 Fam LR 1; FLC 92-757 Mason & Mason [2013] FMCAfam 99 Stanford v Stanford [2012] HCA 52 Williams v Williams (1985) 10 Fam LR 335; FLC 91-628 |
| Applicant: | MS MASON |
| Respondent: | MR MASON |
| File Number: | SYC 373 of 2011 |
| Judgment of: | Scarlett FM |
| Hearing dates: | 5 & 6 February 2013 |
| Date of Last Submission: | 6 February 2013 |
| Delivered at: | Sydney |
| Delivered on: | 14 March 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Christoff |
| Solicitors for the Applicant: | M.J. Woods & Co |
| Respondent: | The Respondent appeared in person |
ORDERS
Within three (3) months of the date of these Orders, the following shall simultaneously occur:
(a)The Applicant Wife must transfer to the Respondent Husband all of her right title and interest in the property situate and known as Property W in the State of New South Wales being Lot [omitted] and the whole of the land in Folio Identifier [omitted];
(b)The Husband and the Wife must do all acts and things and sign all documents necessary at the Husband’s expense to cause to be discharged and refinanced into the Husband’s sole name the mortgage secured against the title to the property at Property W aforesaid in favour of the Commonwealth Bank of Australia and arrange for any such mortgage to be registered solely in the name of the Husband;
(c)The Husband must pay to the Wife by way of settlement of property the sum of $7,767.00.
As and from the date of the parties’ compliance with Order (1) above the Husband is to be solely responsible for repayment of any loan secured by any mortgage over the property at Property W and is to indemnify and keep indemnified the wife in relation to all liability under any such mortgage.
As and from the date of the parties’ compliance with Order (1) above the Husband is to be solely responsible for payment of all other outgoings including council rates livestock rates and other expenses and charges in relation to the property at Property W and indemnify and keep the Wife indemnified in relation to all such rates, charges and expenses.
In the event that the Husband is unable to pay to the Wife the sum of $7,767.00 within three (3) months of the date of these Orders or such further time as the Wife shall agree in writing then the parties are to do all things and execute all documents and instruments necessary to place the property at Property W on the market for sale by a licensed real estate agent practising in the local area at a price to be agreed upon by the parties and in default of agreement at a price to be determined by the real estate agent and the parties are to cause the proceeds of the sale of the property to be dealt with in the following manner and priority:
(a)the costs, expenses, commissions, advertising fees, and disbursements of the real estate agent conducting the sale;
(b)the costs and fees of any lawyer or conveyancer acting for the parties in respect of the sale;
(c)the sum or sums of money necessary to discharge the mortgage in favour of the Commonwealth Bank of Australia;
(d)60 per cent (60%) of the balance to the Wife; and
(e)40 per cent (40%) of the balance to the Husband.
If either party refuses or neglects to execute any deed document or instrument necessary to give effect to these Orders within seven (7) days of being requested in writing to do so by the other party then the Registrar or a Deputy Registrar of this Court is empowered in accordance with section 106A of the Family Law Act 1975 to sign and execute such deed document or instrument on behalf of the party who fails or neglects to do so as may be necessary to give full force and effect to these Orders.
Each party is to retain any superannuation interest in his or her own name.
Each party is to retain any account in any bank, building society or credit union standing in his or her own name.
The Wife is to retain and is to be solely entitled to Toyota motor car registered number [omitted].
The Husband is to retain and is to be solely entitled to Holden motor car registered number [omitted].
Each party is entitled to retain any other item of personal property standing in his or her own name or possession.
Each party is to be solely responsible for any credit card debt standing in his or her own name and is to indemnify the other party against all or any claims arising from such debt.
Written submissions in support of any application for costs are to be filed and served within 21 days and any written submissions in opposition to any such application are to be filed and served within a further period of 14 days.
IT IS NOTED that publication of this judgment under the pseudonym Mason & Mason (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 373 of 2011
| MS MASON |
Applicant
And
| MR MASON |
Respondent
REASONS FOR JUDGMENT
Application
This is an Application for settlement of property between the parties to a marriage.
The Applicant is the wife. She seeks orders as set out in her Application filed on 24th January 2011. In short, the orders that she seeks are:
a)that the parties should sell a jointly owned rural property at [W], New South Wales, and divide the net proceeds in the following proportions:
i)as to 75% to the Wife; and
ii)the remaining 25% to the Husband;
b)that the Wife should retain not only her own superannuation but also that of the Husband;
c)that the parties should otherwise retain the items of personal property currently in their possession; and
d)that the Husband should pay her costs.
It seems rather unusual that the Wife should seek to retain not only her own superannuation entitlement but all of the Husband’s superannuation as well. If this is an error, one would have expected it to have been picked up and corrected at the Conciliation Conference and an Amended Application filed. Counsel for the Wife submitted that the Court should not make the splitting order sought by the Husband.
Order 4 sought by the wife in her Application filed on 24th January 2011 states:
Orders, the superannuation entitlement of the applicant wife to remain with the wife. The superannuation entitlement of the respondent husband to remain with the wife (sic).
The Husband filed a Response on 18th July 2011. However, the orders that he seeks are set out in a Case Information Document prepared by his former solicitor shortly before he withdrew from representing the Husband on the first day of the hearing.
The orders sought by the Husband in the Case Information Document are, in summary:
a)that within 28 days the parties should sell the property at [W] and pay the entire net proceeds to the husband;
b)that the Wife return to the husband the 1954 edition of the book entitled “The Kama Sutra of Vatsyayana” by Sir Richard Burton;
c)that in accordance with s.90MT(1)(b) of the Family Law Act, whenever a splittable payment of the Wife’s superannuation becomes payable, the Husband will be entitled to be paid 50% of the splittable payment;
d)that in accordance with s.90MT(1)(b) of the Act whenever a splittable payment of the Husband’s superannuation becomes payable, the Wife will be entitled to be paid 50% of the splittable payment;
e)that the Registrar of the Court be appointed under s.106A to execute any document on behalf of either party who may refuse or neglect to do so;
f)that the parties otherwise retain all other items of real and personal property that they currently hold, although there is no evidence that either party owns any other real estate; and
g)that each party be solely liable for any liabilities, excluding the mortgage over the [W] property, standing in their own name.
However, in cross-examination on the second day of the hearing, the Husband told the Court that he wanted to retain the property at [W] in his own name.
Background
The parties were married [in] 1990 and commenced living together on that date.
There are two children of the marriage. [Y] was born [in] 1993. She is now an adult.
[X] was born [in] 2000. He lives with the Wife. The Court made parenting orders in respect of [X] on 8th February 2013 (Mason & Mason[1]).
[1] [2013] FMCAfam 99
The Husband has worked throughout the marriage as a [omitted], either for wages or on his own account. He is currently self-employed.
The Wife commenced working on a part-time basis in 1992. She stopped work in April 1993, shortly before the birth of the parties’ first child [Y], and recommenced work in 1994.
The parties separated early in 1995, when the Wife left the Husband with the child and moved to Melbourne.
The Wife returned to the marriage three months later, but left again after a violent incident in May 1995. The Husband left the Wife a note, saying:
PACK YOUR BAGS & LEAVE
YOU ARE NO LONGER WELCOME HERE WITH ME
[MR MASON][2]
[2] Affidavit of Ms Mason 30.1.2013 Annexure “A”
The parties remained apart until late in 1998, when the Wife returned to live with the Husband.
The parties purchased the property at Property W for $120,000.00 in 2007. They borrowed an amount of $100,000.00 from the Commonwealth Bank of Australia to assist in the purchase.
They separated again in June 2010 and have remained living separately and apart since then.
Evidence
The Wife relied on the following documents:
a)her Application filed on 24th January 2011;
b)her affidavit sworn on 30th January 2013; and
c)her financial statement filed on 31st January 2013.
The Wife gave oral evidence and was cross-examined by the Husband. During her evidence in chief; the Wife tendered in evidence a document entitled “Comparative Market Analysis” relating to the property at [W]. The Husband objected to the tender of this document on the basis that it was not a valuation of the property. The document was admitted into evidence but the parties were told that the Court would hear submissions as to its weight.
The Wife’s explanation for her failure to file a valuation of the real estate was that she had been told that a valuation would cost $11,000.00 to prepare. This seems to be a surprisingly large fee for a valuation of a property worth, on the Wife’s case, between $150,000.00 and $160,000.00.
The Wife also tendered two cheque stubs from the Sydney Credit Union, dated 13th March 2007 for $6,000.00 and 12th October 2007, for $7,889.71
The Husband relied on the following documents:
a)his Response filed on 18th July 2011;
b)his affidavit sworn 24th January 2013;
c)his financial statement filed on 25th January 2013;
d)his Case Information filed on 31st January 2013 and
e)a Balance Sheet filed on 25th January 2013.
The Husband gave oral evidence and was cross-examined by Mr Christoff for the wife.
There were no other witnesses.
The Proper Approach to Determination of a Property Application
The way a court approaches property matters has been authoritatively set out by the Full Court of the Family Court in the decision of Hickey & Hickey[3] where Nicholson CJ, Ellis & O’Ryan JJ held at [39]:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss. 79(4)(d), (e), (f) and (g), (the “other factors”) including, because of s. 79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment If any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case…
[3] [2003] FamCA 395; (2003) 30 Fam LR 355; FLC 93-143
The Court should also have regard to the recent decision of the High Court of Australia in Stanford v Stanford[4], where the majority held that:
…the requirements of s.79(2) and 79(4) are not to be conflated. In every case in which a property settlement under section 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
[4] [2012] HCA 52
It is not a power to be exercised accorded to an unguided judicial discretion. It must be exercised in accordance with legal principles, including those appearing within the Family Law Act itself.[5]
[5] See Erdem & Ozsoy [2012] FMCAfam 1323 per Walters FM as he then was at [113]
The Parties’ Property and Liabilities
It is regrettable that the parties entered a final hearing without an agreed value of the major matrimonial asset, the real estate. The Husband places a value on the land at $140,000.00, based on the valuation prepared out by Mr B of [omitted] on 14th September 2011. This valuation was completed shortly the parties attended a Conciliation Conference with a Registrar on 16th September 2011.
The Wife relies on the Comparative Market Analysis prepared by a
Mr H of [omitted] Real Estate on 2nd September 2011, which is the document tendered on the Wife’s behalf on the first day of the hearing. That document, which is a market appraisal, shows an appraisal price of $150,000.00 to $160,000.00.
The Valuation and the Comparative Market Analysis were both prepared in September 2011. In my view, the full Valuation prepared by a qualified valuer, Mr B, must be preferred as the document with greater weight. Mr B valued the property at $140,000.00.
There is no more recent evidence of the value of the real estate. I find the value of the real property at Property W to be $140,000.00.
I find the non-superannuation asset pool to be:
a)Property W (joint names) $140,000.00
b)Husband’s NAB Savings Account $250.00
c)Husband’s Holden car [registration omitted] $200.00
d)Husband’s household contents $1000.00
e)Wife’s Sydney Credit Union Savings Account[6] $5,000.00
f)Wife’s 2005 Toyota Car [registration omitted][7] $8,000.00
g)Wife’s household contents[8] $3,000.00
h)Wife’s gold and jewellery[9] $2,000.00
Total non-superannuation assets $159,450.00
[6] From wife’s Financial Statement filed 31.1.2013
[7] From wife’s Financial Statement
[8] From wife’s Financial Statement
[9] From wife’s Financial Statement
I find the parties’ liabilities to be the following:
a)Mortgage (joint) to Commonwealth Bank $80,000.00
b)Wife’s Credit Card debt $3,954.00
Total liabilities $83,954.00
The net value of the parties’ non-superannuation asset pool stands at $75,496.00.
Both parties have superannuation.
The Husband’s superannuation, with [C], had a closing account balance of $20,782.00 as at 30th June 2012.
The Wife gives the gross value of her superannuation with [H] Super as $E80,000.00. This figure is given in her Financial Statement and is unsupported by any document from her superannuation fund.
In my view, this is quite unsatisfactory. Superannuation is, after the real estate, the second largest asset that the Wife claims she has, and there is no evidence that the Wife has taken any steps to obtaining any sort of information from her superannuation fund. This view is reinforced by the concession by the Wife’s counsel that the trustees of the Wife’s superannuation scheme were not informed of any proposed splitting order.
The Husband has at least annexed a copy of his account summary from his superannuation fund to his affidavit but that document does not give any indication that the trustees of the scheme have been informed of the splitting order that he proposes.
The total of the parties’ superannuation stands at $100,782.00.
The net total, combining the net non-superannuation asset pool and the superannuation, amounts to $176,278.00.
The Parties’ Contributions
The parties’ evidence of the length of their cohabitation is imprecise, but, taking into account the two periods of separation before the final separation, appears to be approximately 16 and a half years in total. During that time the Husband was in employment although he concedes that he was spending approximately $200.00 per week on alcohol, cigarettes and marijuana. This was money not available to contribute to the welfare of the family.
There is also evidence of domestic violence by the Husband towards the Wife during the course of the marriage, which led to separation on three occasions, the last one of which was permanent. It was the Wife’s unchallenged evidence that she finally moved out because the parties’ daughter [Y] said to her words to the effect of:
“Mum, if you don’t move out, I’m moving out. I’m not home that much because of Dad. I am at [name omitted]’s house because I’m happy at [name omitted]’s house, there’s no fighting there and I don’t get hit”.[10]
[10] Affidavit of Ms Mason 30 .1.2013 at [60]
It is the Wife’s evidence that she was working full time at a [omitted] six days a week including a twelve-hour double shift on weekdays as well as performing all household chores including cooking, cleaning, laundry and attending to the care of the children.
The Husband submits that he should receive credit for attending to all the payments on the mortgage of the [W] property after the parties separated in June 2010.
Against this, the Wife was the one who was contributing to the primary care of the children after separation, up to 3rd May 2011 in the case of [Y], when she turned 18, and up until the present day in the case of [X] (see Williams v Williams[11]).
[11] (1985) 10 Fam LR 335; FLC 91-628
The Wife did not seek to argue that her contribution had been made more onerous by the husband’s behaviour, as discussed in Kennon v Kennon[12], although there would appear to have been some scope for such an argument. Accordingly, I have not taken that matter into account.
[12] (1997) 22 Fam LR1; FLC 92-757
In my view, noting the Wife’s contributions as homemaker and primary carer of the children, including a significant post-separation contribution to the care of the children, and noting particularly her history of full-time and part-time employment during a period of cohabitation approximately sixteen and a half years, I find the contributions favour the Wife.
I assess the parties’ contributions at 55% to the Wife and 45% to the Husband.
Other Factors taken into Account under Subsection 79(4)(d) to (g)
Paragraph (d) of subsection 79(4) requires the Court to take into account the effect of any proposed order on the earning capacity of either party. There will be no effect on the earning capacity of either party.
Paragraph (e) of subsection 79(4) requires the Court to take into account the matters referred to in subsection 75(2) so far as they are relevant.
The Husband was born [in] 1959. He is currently 53 years of age. He is able to work but he suffered a heart attack in 2007.
The Wife was born [in] 1963. She is currently 49 years old. There is no evidence that she is otherwise than in good health.
Both parties are in employment. The Wife gives her total average weekly income as $925.00 per week. She lives in rented accommodation. She has a Toyota motor car, some household items, gold and jewellery and an amount of $5,000.00 in a credit union account. She also has a superannuation entitlement and an interest in the [W] property.
The Husband gives his total average weekly income. He, too, lives in rented accommodation. He discloses that he has a Holden Commodore motor car, some household items, a bank account with about $250.00 in it and a superannuation entitlement.
The Wife has the care and control of a child of the marriage who has not attained the age of 18 years, [X], who was born [in] 2000.
The Husband does not have any child of the marriage living with him.
The Wife discloses in her Financial Statement that her commitments to support herself, [X] and the parties’ adult daughter [Y] amount to $514.00 per week.
The Husband discloses a total weekly personal expenditure of $836.00. This includes an amount of $82.00 by way of child support for [X].
Neither party claims a responsibility to support any other person.
The Husband does not disclose any entitlement to a pension, allowance or benefit. He has a superannuation entitlement which he cannot access at his age.
The Wife discloses that she receives Family Allowance in an estimated amount of $75.00 per week. She, too, has a superannuation entitlement that she is too young to access.
Neither party claims to be cohabiting with any other person except that the Wife lives in the same residence as the children of the marriage.
The Husband pays an amount of $82.00 per week by way of child support. Annexed to the Wife’s affidavit and marked with the letter “J” is a copy of the parties’ Child Support Assessment for the period 1 August 2011 to 31st October 2012. It shows that the fortnightly rate payable by the Husband is $160.26.
The Wife claims that the Husband is in arrears of child support to the extent of $3,500.00. The Husband admitted in cross-examination that child support was in arrears but denied that it amounted to $3,500.00. In the absence of any documentary evidence from the Child Support Agency the Court cannot make a finding of fact as to an amount of arrears.
The only other Orders made under this Act affecting a party to the marriage or a child of the marriage are the parenting Orders made by this Court on 8th February 2013 relating to [X].
There is no evidence that the parties are divorced.
In considering what adjustment, if any, should be made to the parties’ contribution based entitlements, it appears that the Wife will have the responsibility to be the primary carer for the parties’ child [X] until he attains the age of 18 years. He is currently aged 12 years and 9 months, so he will by reliant on his mother for another five years and three months. Under the present parenting orders, [X] will spend one day each fortnight in his father’s care and the rest of the fortnight in the care of his mother.
Accordingly, this calls for an adjustment in the Wife’s favour of 5%.
I assess the parties’ entitlements at 60% to the Wife and 40% to the Husband.
However, the Court must consider whether orders in accordance with this assessment would be just and equitable.
Just and Equitable
Despite what his Court documents say, it is the Husband’s wish to retain the property at Property W. This land clearly has significance to the Husband and, in my view, it would be just and equitable to make an order permitting him to retain the property by paying out the Wife’s share. She does not want the land. She seeks that it should be sold.
It does not appear to me to be just and equitable to make a superannuation splitting order. The Wife’s superannuation interest, even on her rather unsatisfactory evidence, is significantly greater than that of the Husband. Her superannuation is her provision for her retirement and has been accrued because of her lengthy employment. The Husband’s proposal that both parties’ superannuation should be evenly split does not appear to be just and equitable.
Orders to be made
The net total of the parties’ assets, both superannuation and non-superannuation, amounts to $176,278.00.
The Wife will be entitled to 60% of the net assets, amounting to $105,767.00.
The Husband will be entitled to 40% of the net assets, which amounts to $70,512.00.
The Wife will retain:
a)Her Sydney Credit Union Savings Account: $5,000.00
b)Her Toyota car [registration omitted]: $8,000.00
c)Her household contents: $3,000.00
d)Her gold and jewellery: $2,000.00.
e)Her superannuation: $80,000.00.
The Wife will be solely responsible for her credit card debt.
The Husband will retain:
a)His NAB Savings Account: $250.00
b)His Holden car [registration omitted]: $200.00
c)His household contents: $1,000.00
d)His superannuation: $20,782.00
e)The real property at Property W, subject to his assuming responsibility for the amount owing under the mortgage and paying to the Wife the sum of $7,767.00.
I propose to allow three months for the Husband to arrange the necessary finance. If it should transpire that he is unable to arrange sufficient finance to buy out the Wife’s interest, then the parties will have to sell the property and divide the net proceeds between them as to 60% to the Wife and 40% to the Husband.
I am not satisfied that the husband has proved that the wife has retained a book of his called “The Kama Sutra of Vatsyayana” by Sir Richard Burton and no order will be made.
Each party seeks an order for costs. If costs are to be argued, the parties need to be aware that costs do not follow the event in family law, and the Court will consider the matters set out in subsection 117(2A) of the Family Law Act when making a decision as to what, if any, order should be made.
If either party seeks to pursue an application for costs, he or she must do so by way of a written submission, to be filed and served on the other party within 21 days. A further 14 days will be allowed for any written submission in reply.
I certify that the preceding eighty-three (83) paragraphs are a true copy of the reasons for judgment of Scarlett FM
Associate:
Date: 8 March 2013
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