McClain & Heath
[2022] FedCFamC2F 868
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
McClain & Heath [2022] FedCFamC2F 868
File number(s): CRC 127 of 2017 Judgment of: JUDGE BETTS Date of judgment: 4 July 2022 Catchwords: FAMILY LAW – Property – short de facto relationship between a mature aged couple – assets and income kept separate throughout – husband inherits significant property after separation – not just and equitable to make any orders. Legislation: Family Law Act1975, Part VIII and Part VIIIAB Cases cited: Gosper & Gosper (1987) FLC 91-818
Stanford & Stanford (2012) FLC 93-518
Division: Division 2 Family Law Number of paragraphs: 115 Date of last submission/s: 4 April 2022 Date of hearing: 26 & 27 August 2021, 4 April 2022 Place: Newcastle Counsel for the Applicant: Mr Flanagan Solicitor for the Applicant: Grant & Co Solicitors & Attorneys Solicitor for the Respondent: Byrnes Lawyers ORDERS
CRC 127 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS MCCLAIN
Applicant
AND: MR HEATH
Respondent
ORDER MADE BY:
JUDGE BETTS
DATE OF ORDER:
4 JULY 2022
THE COURT ORDERS THAT:
1.The court dismisses the Wife’s application for a de facto property settlement order pursuant to the provisions of Part VIIIAB of the Family Law Act1975.
2.The Court will hear the parties as to costs, with the proceedings being adjourned to Friday 8 July 2022 at 11.00am for any further submissions.
THE COURT NOTES THAT:
A.These Orders have been amended pursuant to rule 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
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 McClain & Heath has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BETTS:
INTRODUCTION
Following the breakdown of their relatively short de facto relationship, the Applicant (whom I will call “the Wife”) seeks a property settlement from the Respondent (whom I will call “the Husband”) pursuant to the provisions of Part VIIIAB of the Family Law Act 1975 (“the Act”).
The Husband submits that no order should be made. For the reasons which follow, I agree.
SHORT CHRONOLOGY
Pre-relationship: the Husband
The Husband was born in 1956.
After beginning his career in the finance industry, the Husband married and had three (3) children with his then wife. In 2002 their marriage broke down by which time their eldest two children were adults and the youngest was sixteen (16). They settled their matrimonial property; his then wife received most of it.
The Husband decided on a career change, taking up customer service work. Having obtained his own licence and ABN, he left the Sydney region and moved to City B to manage the local branch of a business known as “Company C”. He oversaw business operations, organised shift rosters for the staff as well as working shifts himself.
Pre-relationship: the Wife
The Wife was born in 1958. She was married and widowed with two (2) adult children, one of whom – Mr D – was autistic and in receipt of a disability support pension from Centrelink. The Wife and Mr D jointly rented a home in City B where she provided him with day-to-day assistance. Centrelink paid the Wife a carer’s pension.
Prior to meeting, both parties were in modest financial circumstances.
2008: Parties meet & commence a casual relationship
The parties met in 2008 in City B where the Wife was working at a venue frequented by the Husband in the course of his employment. They soon formed a casual boyfriend/girlfriend relationship. When the Wife told the Husband that she had her own customer service licence, he arranged for her to work some shifts for Company C.
The parties lived separately; their finances and assets were kept separate.
2010: Parties commence cohabiting in a de facto relationship
The Husband’s elderly and frail parents were living in their home at Suburb E, on the outskirts of Sydney. It was the Husband’s childhood home.
In late 2010 the Husband’s mother had a fall, following which she had to move into a nursing home. Knowing that his father would be at home alone, the Husband decided that the time was ripe to move back to his childhood home and care for his father in his twilight years.
Purchased by the Husband’s parents prior to his birth, the Suburb E home originally consisted of a main house with two (2) bedrooms. When the Husband was a boy, his parents lived in the main bedroom and he lived in the other.
Unfortunately the Husband’s mother was in his words “an habitual hoarder” who, over time, completely filled the home with clothing items. By 1984, the home had become practically unliveable. But rather than clean up the home, the Husband’s parents instead paid for a self-contained cabin to be erected (or placed) on the property which they then moved into; the main house became somewhat derelict.
Upon the Husband’s return to the Suburb E home in 2010, he decided to occupy his parents’ former bedroom in the main house. A substantial clean-up was required, beginning with the emptying out of all of his mother’s clothing. To that end, the Husband started organising skip bins – six (6) were ultimately required.
The parties still saw each other after the Husband moved, either at City B or at Suburb E. The Husband soon invited the Wife to join him. She accepted the invitation, moving to the Suburb E home around late 2010.
This was the beginning of cohabitation; it was when their de facto relationship commenced.
The parties lived at the Suburb E home essentially for free. The Husband’s father did not charge them rent. He also paid for the home insurance, the Council rates and most of the groceries and utilities (though the Wife did make some modest contributions towards her share of the latter).
The Husband did most of the cleaning-up work at the Suburb E home but the Wife also assisted. The Husband received a carer’s pension in respect of his father and did most of the caring for him, but the Wife also helped when needed.
In the meantime both parties continued doing casual customer service work, sometimes at City B and sometimes in the Sydney region.
The Wife also continued receiving a carer’s pension for Mr D.
First separation
The Husband’s evidence is that the parties were separated for most of 2012, during which time the Wife returned to live in City B.
Although her affidavit was silent about the separation, the Wife did admit in the witness box that “I was gone for a few months.”
I prefer the Husband’s evidence. He was generally a much more reliable witness than the Wife, for reasons I will explain later. Moreover, the Wife’s bank account statements for that period reveal that for the overwhelming bulk of 2012 she was making withdrawals in the City B area. Up to November 2012, she appears to have spent no more than a few weeks in total in Suburb E or in the surrounding area (including Suburb F). The Wife also accepted that she did not attend the Husband’s mother’s funeral in 2012 as, in her words, “I wasn’t told.”
The parties did not affect any property settlement during their separation. Each continued to work and otherwise went about their lives, the Husband caring for his father and the Wife caring for Mr D at City B.
Relationship resumes
In late 2012 or early 2013 the parties reconciled and the Wife returned to live at the Suburb E property.
Their household and financial arrangements remained the same as before.
On 12 February 2016 the parties separated on a final basis and the Wife again moved out.
Summary of the de facto relationship
The total period of cohabitation was a little over four (4) years.
The parties kept their incomes separate, had their own bank account/s and did not open any joint accounts together.
Each party’s modest assets were kept separate and they did not acquire any joint assets. At the end of the relationship each party owned assets (including superannuation) with a net value of less than fifty thousand dollars ($50,000.00).
2016: Husband inherits Suburb E property from his father
In 2016, the Husband’s father died. The Husband (an only child) inherited the Suburb E home which at that stage was likely worth over a million dollars.
THESE PROCEEDINGS
In April 2017 the Wife filed an Initiating Application. Citing her contributions during the relationship, she sought a three hundred thousand dollar ($300,000) cash payment from the Husband. In July 2017 the Husband filed a Response seeking the dismissal of the Wife’s application.
The final hearing ended up being conducted in two (2) tranches.
The first tranche on 26 & 27 August 2021 was conducted by videolink. Ms Carty of counsel appeared for the Wife; Mr Byrnes solicitor appeared for the Husband.
The hearing was adjourned part-heard to 25 October 2021. But a week or so prior to that date, the Wife’s counsel was appointed a Judge of Division 2 of this Court, necessitating a further adjournment of the hearing to 6 December 2021.
In November 2021 the Wife’s solicitors then withdrew and the Wife ended up being self-represented. She sought a further adjournment, citing what she said were desperate financial and personal circumstances. Over the Husband’s objection I granted one final adjournment to 4 April 2022. Given the family violence allegations in the matter, I also made an order pursuant to s 102NA of the Act prohibiting personal cross-examination when the hearing resumed.
The hearing resumed (and concluded) on 4 April 2022. Mr Flanagan of counsel appeared for the Wife (pursuant to the s 102NA scheme) and Mr Byrnes again appeared for the Husband.
At trial, the Wife relied upon:
(a)her Case Outline Document filed 27 November 2019;
(b)her Trial Affidavit filed 28 July 2021;
(c)her Financial Statement filed 28 July 2021.
The Husband relied upon:
(a)his Outline of Case Document filed 24 August 2021;
(b)his Trial Affidavit filed 28 July 2021;
(c)his Financial Statement filed 28 July 2021.
There were a number of tender bundles prepared for the hearing. Some of those documents were tendered as exhibits. The Husband also provided the Court with a transcript of the Wife’s cross-examination on 26 and 27 August and for convenience these transcripts were also marked as exhibits.
It would be fair to say that the final hearing went poorly for the Wife as her evidence was shown to be unsatisfactory and unreliable in a number of important respects. For instance:
(a)she had wilfully delayed in complying with the Husband’s requests – and this Court’s orders – that she provide a copy of her Centrelink file to the Husband; [1]
(b)the reasons for her delay were obvious once she did produce the Centrelink file. It was immediately apparent that she had misrepresented her living circumstances to them over a lengthy period; [2]
(c)acutely aware of her Centrelink issues, the Wife had deposed in a generic way that her son Mr D was living with the parties in a caravan at the Suburb E property. [3] In truth he lived at City B and was only at Suburb E for the last few months of the relationship.
(d)The Wife failed to provide full and frank disclosure of her bank statements:
(i)the bank statements she did disclose were incomplete in that the Wife had personally redacted relevant and discoverable information; [4]
(ii)bank statements were missing, particularly for the timeframe of the first separation. The Wife claimed that she had given the bank statements to her former solicitor who was refusing to release them to her, asserting a lien for unpaid fees. But this is implausible. If her previous solicitors in fact held the missing bank statements then they ought to have been disclosed much earlier – for instance during the first tranche of the hearing when they were still acting.
(e)the Wife’s affidavit had deposed that during the relationship she earned approximately $800 per week on average as a customer service officer, in addition to a carer’s pension for Mr D of between $100 and $800 per fortnight depending on the hours she had worked. In the witness box she conceded that this was wrong; she meant to say that she earned an average income of $800 per week from both sources combined.
But even that concession was grossly exaggerated. Her income tax documents revealed a combined income from employment and the carer’s pension of $8,476 in FY 2011 (averaging $163 per week); $14,128 in FY 2012 ($271 per week); $19,873 in FY 2013 ($382 per week); $16,350 in FY 2014 ($314 per week); $28,319 in FY 2015 ($544 per week) and $38,633 in FY 2016 ($742 per week);
(f)on 28 July 2021, the Wife filed an updated Financial Statement for the purposes of the trial. But it was not “updated” at all; it was no more than a line-by-line copy of her Financial Statement filed on 21 October 2019. The dollar figures were identical to the cent. Despite claiming that her expenses exceeded her income by $109 each week, her bank account balance was unchanged at $850 in both documents. Her son was aged 31 in both documents. Confronted with this rather obvious copying, the Wife stubbornly denied it and instead claimed that her updated Financial Statement was truly an update and that her son’s age in the updated document was a “typo”;
(g)the Wife categorically denied the Husband’s allegation that she had come into the relationship with a $9,000 debt. Yet at the hearing the Husband was able to produce a letter to the Wife from Victims Services NSW dated 30 August 2011 confirming a debt to them of $9,250 as at that date. Faced with that letter, the Wife admitted the debt although denied having ever received the letter in question.
Given her modest financial position at the start of the relationship, I do not accept that the Wife ever forgot about that debt. But even if she had, the Husband’s earlier affidavit had referred to her being in debt and this ought to have refreshed her memory.
Moreover I do not accept that the Wife never received the letter in question. It had been posted to her PO Box at City B, a mailing address she had used for some twenty (20) years.
That the Wife had credibility issues was properly conceded by Mr Flanagan in his closing submissions. But he said they were not fatal. He relied upon the Husband’s admissions in the witness box, particularly as to the Wife’s non-financial contributions. He contended that the Wife still had a legitimate claim, albeit a modest one in percentage terms. He argued for a cash payment to the Wife equal to five percent (5%) of the value of the Suburb E home – being eighty thousand dollars ($80,000) in total – and a far cry from her original claim.
PART VIIIAB OF THE FAMILY LAW ACT
After the breakdown of a de facto relationship, one or other de facto spouse may apply to this Court for a property settlement order pursuant to the provisions of Part VIIIAB of the Act. Provided that the relevant jurisdictional requirements are met, the operative provisions of Part VIIIAB essentially mirror those for married couples in Part VIII. The jurisprudence relating to Part VIII can therefore be applied to Part VIIIAB.
Section 90SM is the “gateway” provision. Relevantly in this case, it provides as follows:
SECTION 90SM ALTERATION OF PROPERTY INTERESTS
(1)In property settlement proceedings after the breakdown of a de facto relationship, the court may make such order as it considers appropriate:
(a) in the case of proceedings with respect to the property of the parties to the de facto relationship or either of them--altering the interests of the parties to the de facto relationship in the property; or
(b) …
including:
(c) an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the de facto relationship; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the de facto relationship or a child of the de facto relationship, such settlement or transfer of property as the court determines.
(2)…
(3)The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court must take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(c) the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and
(e) the matters referred to in subsection 90SF(3) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and
(g) …
Section 90SF(3) enumerates a number of matters which a Court must have regard to when considering a spousal maintenance application. Relevantly it provides:
(3) The matters to be so taken into account are:
(a) the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship ); and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)…
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii)a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f)subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme…
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(i)…
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m) …
(n)the terms of any order made or proposed to be made under section 90SM in relation to:
(i) the property of the parties; or
(ii) …
(o)the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i)a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii)a person who is a party to another de facto relationship with a party to the subject de facto relationship; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) …; and
(p) …
(q) …
(r)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(s)the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t)the terms of any financial agreement that is binding on a party to the subject de facto relationship.
In applying Part VIIAB to this case, I propose to:
(i)identify and value the assets, liabilities and financial resources of the parties (“the Balance Sheet”);
(ii)identify and assess the respective contributions made by each of the parties towards their net property pursuant to section 90SM(4) of the Act;
(iii)consider relevant “future factors” prescribed in s 90SM(4)(e) and s 90SF(3) of the Act, as well as the matters set out in section s 90SM(4)(d) and s 90SM(4)(f);
(iv)address the “just and equitable” requirement in s 90SM(3). [5]
THE BALANCE SHEET
The unencumbered Suburb E property, valued at $1.6M, dwarfs all of the other assets.
Otherwise the Husband has bank accounts with a combined balance of around $12,100 and some Company G shares worth around $5,000. The shares, and some of the money in the bank, were inherited from his late father. He also owns a Motor Vehicle 1worth $6,400, a camper trailer worth $500 and chattels worth $5,000. He owes $20,000 for legal fees and $2,600 on his credit card. Putting the Suburb E property to one side, the Husband’s net non-superannuation assets are $6,400. When Suburb E is included, his net non-superannuation assets are $1,606,400 of which the Suburb E home makes up 99.6%.
The Husband has preserved superannuation of $42,700.
Although the Wife’s “updated” Financial Statement may not be entirely accurate, it is clear enough that she holds only modest assets. She has around $850 in bank accounts, a Motor Vehicle 2 worth $2,000, a motor bike worth $8,000 and a trailer worth $3,000. She owes $5,000 on her credit card, leaving her with net assets of $8,850. She may owe money to her former solicitors as well.
The Wife estimates her preserved superannuation at $20,000.
In closing submissions, the parties sensibly narrowed the Balance Sheet down to the Suburb E property. As observed earlier, the Wife pitched her claim at five percent (5%) of its value, or $80,000. In practical terms, the equity in the Suburb E home is the only relevant asset sought to be divided.
ASSESSING THE CONTRIBUTIONS OF THE PARTIES
For the purposes of assessing contributions, I will aggregate the two (2) periods of cohabitation.
Initial contributions:
In terms of initial contributions, each party had only modest assets. I do not accept the Wife’s evidence that she had $6,000 in savings at that time, noting my concern about her reliability and that she has not provided any bank statement/s to corroborate that figure. Moreover, to the extent she has provided bank statements from the relationship, their balance is nowhere near that high. (Though not strictly necessary, my conclusion is fortified by the Wife having deposed that her motor vehicle was worth $8,000 at commencement of the relationship, while telling Centrelink it was worth $4,000.)
Contributions during the relationship:
The relationship was short.
In terms of direct financial contributions, both parties worked casually throughout. They had their own bank accounts, they met their own expenses. Each received carer’s pensions, the Husband on account of his father and the Wife on account of Mr D. Though the Wife was not being honest with Centrelink, it is nonetheless true that she did actively assist Mr D. She stayed in regular telephone contact with him. She transferred his rent money for him. If she was working at City B, she stayed with him. She also visited him at City B at other times if he needed her.
The Wife deposed that:
52.During the relationship all my income was used for general household expenses, renovations and improvements of the home and purchases for [Mr McClain]. I was not able to save any of my income.
With respect, this is an exaggeration. I prefer the Husband’s evidence that for the most part the Wife’s income barely met her own expenses. Her income was very modest throughout, particularly in the early period of the relationship. From her income she had to keep providing for Mr D. She simply did not have the available funds to have made significant financial contributions towards work done on the house in the early days of the relationship and I do not accept that she made such contributions. Nor do I accept the Wife’s evidence that she spent around $10,000 on chattels for the home between 2010 and 2016, while also paying $200 per week for food. I am satisfied that the Wife’s financial contributions were only a modest fraction of what she claims they were.
In terms of direct financial contributions, I am satisfied that the Wife:
·made modest contributions towards some, but not all, of the utility bills;
·paid for groceries from time to time;[6]
·paid for dinner on occasions (as did the Husband).
·she paid for some holiday expenses totalling some $1,450;
·purchased birthday presents and gifts for the Husband’s family members although nowhere near the $2,000 per year the Wife estimates;[7]
·paid around $300 for paint, putty and sandpaper which was used to fix some holes in the walls, the skirting boards and the ceiling;
·she periodically gave the Husband modest amounts of money to assist with living and other expenses.
The Wife claimed to have paid $150 to a handyman to screw the kitchen cupboards to the wall which the Husband denied. He said that no such work was ever carried out and I prefer his evidence. She also claimed to have paid for a gas connection and gas heater for the home. The Husband denied this and I prefer his evidence.
The Wife claims to have paid $450 for replacement kitchen cabinets and $150 for a stove top, as well as paying the associated trailer hire fees and fuel costs. The Husband denies it all. Although the Wife pointed to one bank payment of $884 that she made, it was unclear what this related to.
All of the Wife’s financial contributions need to be considered in the context that at all times the parties’ living expenses were to a large extent being subsidised by the Husband’s father. [8] I regard this as a contribution made by him on the Husband’s behalf: Gosper & Gosper (1987) FLC 91-818. Both parties benefitted from it.
The Wife’s counsel placed particular weight on the Wife’s non-financial (and in some cases indirect financial) contributions, specifically in relation to cleaning up the home when she first moved in, tidying and cleaning the home thereafter, together with her general household contributions including cooking for the parties. The Wife’s counsel also referred to the assistance rendered by the Wife to the Husband’s father.
In relation to the initial cleanup, the parties’ versions differ.
The Husband moved into the home first and he organised the skip bins for his mother’s clothing and loaded them up; the Wife provided minor assistance. Specifically, the Wife’s counsel put to the Husband that she had assisted him in loading “one” skip bin. He said he could not remember her doing so. On the evidence before me, I am willing to accept that she did. I am also willing to accept her evidence that she took a trailer load worth of items to the dump. She also disposed of some old curtains.
The Wife claims that she spent some two hundred (200) hours cleaning mould from the walls and some sixty-five (65) hours cleaning mould from the ceilings. She says she also spent some thirty-five (35) hours scrubbing mould from the bathroom and toilet. She deposed that she purchased about $500 worth of cleaning products,[9] including bleach, and that ultimately she “ended up at the doctors with bleach poisoning”. Though she had not subpoenaed the relevant medical records, she gave a vivid account of her symptoms in the witness box, explaining that she was suffering from burning hands and red raw skin, breathing issues, headaches and a general feeling of being unwell.
The Husband accused her of exaggerating. He accepted that some of the tiles were old and leaking, resulting in mould growing in the bathroom and toilet. He denied there was mould anywhere else, including the kitchen. He says that both he and the Wife cleaned the mould, that it was a “shared task”.
I am not satisfied that the mould problem was as bad as the Wife suggests, nor as mild as the Husband suggests. It was somewhere between the two. I do not accept that the Wife spent the sheer number of hours cleaning mould that she claims. That said, I am satisfied that she did clean mould for many hours, and likely did more of the mould cleaning than the Husband did. I accept that at one point she became ill, likely from using bleach.
The Wife helped arrange some tradesmen to undertake roof repairs; the Husband’s father paid for it.
The Wife claimed to have spent thirty (30) hours ripping up old carpet and scrubbing floors. The Husband denied that any carpets were removed; he said they were professionally cleaned once he removed his mother’s clothing. The Husband admits that some old lino was removed from the kitchen but he said that he was one who scrubbed the timber floor afterwards. I generally prefer the Husband’s evidence. I do not accept the Wife’s claim that carpets were removed but I do accept that she did some carpet cleaning (probably prior to the professionals being called in).
The Wife claimed that seven (7) house windows were jammed shut, and that she spent about two (2) hours “unjamming” each one, some fourteen (14) hours in total. The Husband admitted that one (1) window was jammed only; he says the Wife broke it when she tried to open it. I prefer the Husband’s evidence.
After the initial cleaning-up was complete, the Wife claims to have done the majority of the cleaning, cooking, vacuuming, clothes washing, drying and dishwashing. The Husband said that these tasks were shared, that each party did their own washing and ironing and cleaned the Suburb E home “when it was needed.” It is common ground that both parties were sometimes away for work, and the Wife also visited Mr D at other times, so it is logical that the other party did more of the housework during those periods. In the end, I prefer the Husband’s evidence.
The parties shared the cooking.
I accept the Wife’s unchallenged evidence that she did the yard work around the home, although I consider that her estimate of 3 or 4 hours each week to be excessive. [10]
The Wife’s son lived in a caravan on the property for the last three (3) months or so of the relationship. About a month prior to separation, the Wife’s daughter moved there as well, living in an annexe attached to a camper trailer at the Suburb E home. Neither of them paid rent, or contributed towards grocery costs and utilities.
The care provided by the Wife to the Husband’s father during the relationship:
Section 90SM(4)(c) requires the Court to consider contributions “to the welfare of the family constituted by the parties to the de facto relationship…including in the capacity of homemaker” (my emphasis).
Not without difficulty, I have come to the view that the Wife’s contributions towards the care of the Husband’s father are captured by that paragraph because such contributions indirectly contributed to the welfare of the family constituted by the parties. But even if I am wrong about that, I consider that such matters could properly be taken into consideration pursuant to the “catch-all” provision in s 90SF(3)(o). It is convenient to deal with them now.
To some extent I have already addressed the Wife’s homemaking contributions. I cannot double-count them. To be clear, the Husband’s father benefitted from her homemaking contributions to some extent, for instance when the Wife cooked.
Unsurprisingly, there was significant debate between the parties as to exactly how much care the Wife provided. The Wife asserts that she called him “Dad”, cooked meals for him almost daily, washed his clothes, ensured that he was clean and tidy and transported him places. She says she found two (2) mobility scooters for him and showed him how to use them. Put shortly, she asserts that she acted in every way as a loving daughter/stepdaughter.
The Husband agrees that the Wife called his father “Dad” and that she did talk to him and provide him with some care, including sometimes helping him if he fell over. He says that it was he, not the Wife, who drove his father when required. He says that his father was in fact quite capable on his mobility scooter and that he did not need to be driven much anyway. He says it was he and not the Wife who washed his father’s clothes, prepared most of his meals and generally looked after him. He also says that when his father’s health deteriorated, arrangements were made for a Government-based organisation to regularly attend the cabin and assist with cleaning and domestic tasks.
The Husband deposes that his father had in fact soured towards the Wife prior to the relationship ending, complaining to him “Why are you with that girl? She doesn’t pay anything or do any work around here.”
I consider that the truth lies somewhere between each party’s version. The Wife did provide some care and assistance to the Husband’s father but the Husband was his primary carer.
Post-separation:
The separation followed an altercation between the parties. (The Wife later complained to Police, who charged the Husband with common assault and applied for an AVO on her behalf. The Husband maintained his innocence and, after a trial in the Local Court, both the assault charge and the AVO were dismissed by a Magistrate.)
It is common ground that at separation the Wife moved out with her children, returning to live in the City B area. For the next eight (8) months or so, the Wife did not have stable accommodation - living in a tent, caravan parks or in the back of her car. I accept the Wife’s evidence that she had left numerous personal and chattel items behind at the Suburb E home which remained in the Husband’s possession.
The Husband remained living in the Suburb E home, working and caring for his father.
As had always been the case, each party continued to financially support themselves and each continued to have a modest asset position, albeit that the Husband had secure accommodation.
The Husband’s circumstances changed in 2016 when his father died and he inherited the Suburb E home. He then took over responsibility for the various outgoings.
On 10 March 2017 the Wife instituted proceedings against the Husband in the Local Court, seemingly for conversion and detinue, in respect of her personal and chattel items at Suburb E. She sought damages of $30,280. I accept the Husband’s evidence that some two (2) days after filing these proceedings she attended the Suburb E home unannounced and at a time when the Husband was away, removing numerous items. She accuses the Husband of having thrown some of her property into the yard or otherwise allowing it to be damaged so that it had to be thrown away. The Husband denied doing so and in any event the monetary value of any such property would have been nominal. Notably she discontinued the Local Court proceedings and the Husband ended up with an unpaid costs order of $860 against her.
Conclusion as to contributions:
I am satisfied that during the relationship, each party made contributions as set out above. But unless and until the Husband inherited the Suburb E home, such contributions were properly reflected in the assets and liabilities that each had.
The post-separation inheritance does not change that fact. In the circumstances of this case, the inheritance is overwhelming. To treat the Suburb E property as falling into the same category as all the other assets for the purposes of the contributions assessment tends to distort things, rather than clarify them. The Wife’s contributions towards the Suburb E home per se were de minimis particularly in the context of the offsetting benefits she received by way of subsidised living costs. Even allowing for her homemaking contributions – which need to be given proper weight – it needs to be remembered that the Wife herself only pitched her claim at a total of 5% of the equity in the home.
In summary, the contributions of the parties are reflected in their current asset holdings. No adjustment is warranted in either party’s favour in account of their respective contributions.
CONSIDERATION OF THE “FUTURE FACTORS”
The Wife is 63 years old. She rents with Mr D in the City B region, where she continues to work as a casual customer service officer. She receives a carer’s pension. Her combined weekly income from all sources is an average of $820 per week, made up of $680 in wages and $140 from Centrelink. She remains in strained financial circumstances; she has no significant assets to fall back on.
The Wife’s health is somewhat compromised. She suffers from a medical condition[11] which makes her tired and can sometimes cause internal bleeding. She takes medication for it, at a cost of $60 per month. She has an injured shoulder for which she may require surgery in the future. She has significant degeneration in her cervical spine, with multi-level disc bulges and some mild to moderate spinal stenosis. She may require surgery for her cervical spine in the future. She also has some gastric issues.
Notwithstanding the above, the Wife has had to work to survive and she will continue to do so to the extent she is able. But given her age and state of health, her income-earning potential is inevitably modest.
The Husband is 66 years old. In 2021, he was diagnosed with stage 2 cancer. Over the ensuing months he underwent six (6) bouts of surgery, followed by six (6) months of chemotherapy. During his treatment he was off work and had to deplete his employment entitlements. He also rented a room out to a boarder for $300 per week.
After completing his chemotherapy, the Husband returned to working shifts as a customer service officer, working a forty-eight (48) hour roster one week and a thirty-six (36) hour roster the other week and earning a reasonable income. Additionally he was continuing to rent out a room at the Suburb E property for $300 per week.
Like the Wife’s, the Husband’s income-earning potential is modest given his age and health. He does however have the benefit of a rental income stream.
It is inescapable that, as a direct result of his post-separation inheritance, the Husband’s financial circumstances are now vastly stronger than those of the Wife.
There are no children of the de facto relationship. The wife supports her son, as she has always done.
The Husband has a reasonable standard of living. The Wife’s standard of living is not ideal, but it is “reasonable” having regard to her contributions, her income, her caring responsibilities and the modest asset base she brought into the relationship.
Neither party has ever sought a maintenance order from the other. Neither party has contributed in any meaningful way to the other party’s income, earning capacity, property or financial resources.
There are no relevant creditors; although the Husband has a boarder neither party is “cohabiting” with any other person in the relevant sense.
The duration of the relationship did not affect the earning capacity of either party. It is true as the Wife’s counsel suggested that she was something of a “nomad” given her need to commute between Suburb E and City B for work and to care for her son. But although the Wife chose to live at Suburb E during the relationship, she also continued to receive a carer’s pension for her son as though she was still living in City B.
In conclusion, although the Husband could probably afford to pay the Wife a modest cash sum on account of “future factors” (if necessary by taking out a mortgage), it seems to me that to require him to do so would be no more than an arbitrary exercise in distributive justice. If the Wife had an unsatisfied contributions-based entitlement to the assets in the Husband’s possession – most particularly the Suburb E home – the situation may be different.[12]
No adjustment is warranted on account of the “future factors”. I will elaborate further below.
IS IT JUST & EQUITABLE TO MAKE A PROPERTY SETTLEMENT ORDER IN THIS CASE? IF SO, THEN WHAT ORDER WOULD BE JUST & EQUITABLE?
I have concluded that the Wife does not have any contributions-based entitlement to a property settlement order pursuant to the provisions of 90SM(4), nor does she have any entitlement to a property adjustment in her favour on account of future factors as it would not be “just and equitable” to make any such adjustment.
The just and equitable requirement was expressly considered by the High Court of Australia in Stanford & Stanford (2012) FLC 93-518. The plurality (French CJ, Hayne, Kiefel & Bell JJ) held that the expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of competing considerations; that it does not permit of exhaustive definition and it is impossible to chart its metes and bounds. Their Honours held that while it is impossible to apply fixed rules, there are three (3) fundamental propositions which must not be obscured: [13]
(i)First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, in accordance with ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of the section itself, which refers to altering the interests of the parties in the property. The question posed by [s 90SM(3)] is whether, having regard to those existing interests, it is just and equitable to make a property settlement order;
(ii)Secondly, although the discretion conferred by the section is a broad one, it is not to be exercised in an unprincipled way but rather in accordance with legal principles, including those which the Act itself lays down. It is not to be assumed that the parties’ rights to or interests in property are or should be different from those that then exist. Marriage does not give rise to “community of ownership” of property at common law;
(iii)Third, whether making a property settlement order is just and equitable is not to be answered by beginning from the assumption that one or other party has a right to an order fixed by reference to the matters set out in [s 90SM(4)]. To conclude that making an order is just and equitable only by reference to the matters in [s 90SM(4)], without a separate consideration of [s 90SM(3)], is to conflate the statutory requirements and ignore the principles laid down by the Act.
Their Honours went on:
41.…The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated and unstated assumptions and agreements about property interests during the continuance of their marriage.
42.In many cases…the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and the wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of the marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustments to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable to make a property settlement order. What order, if any, that should be made is then determined by applying [s 90SM(4)].
Why it would not be just & equitable to make any order
It is convenient to start by observing that the Husband is the sole registered proprietor of the Suburb E home. The home has been in his family since before he was born. It is not in any way “community property” as between the Husband and the Wife. The Wife does not have, nor does she assert, any legal or equitable interest in the Suburb E home.
It is not to be assumed that the Husband’s existing rights and interest in the Suburb E home are or should be different merely because the parties were previously in a de facto relationship and the Wife has brought property settlement proceedings pursuant to the provisions of Part VIIIAB.
Throughout their relationship the parties remained financially independent. They made the deliberate choice to keep their bank accounts separate and not to open any joint accounts. When the Wife needed money, she borrowed it from the Husband and repaid it later. Though the Wife gave the Husband money on occasions to assist with the purchase of items (such as white goods), they were not purchased jointly. The parties conducted their affairs in such a way that neither party would or could have acquired an interest in the property owned by the other. There is no evidence that either party provided for the other in any Will. [14]
The parties’ financial independence was a mutually agreed arrangement entered into by people of mature age, each of whom had been married before. It would not be just and equitable to permit them to now depart from that arrangement. This is particularly so in respect of the Suburb E property which was always in the Husband’s family, was purchased by his parents before he was born, and only came to be owned by the Husband as a direct result of a post-separation inheritance.
The Court’s obligation is to do justice and equity in each individual case that comes before it. On the facts of this case, it would not be just and equitable to make any order in the Wife’s favour.
CONCLUSION
The Wife’s application for a property settlement order must be dismissed.
I will hear the parties as to costs.
I certify that the preceding one hundred and fifteen (115) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Betts. Associate:
Dated: 4 July 2022
[1] Order 2 of 01/09/20, order 2 of 28/07/21
[2] There are numerous instances contained in exhibit 1. For instance on 02/02/11 she falsely failed to declare that she was living in a de facto relationship with the Husband at Suburb E; in April 2011, October 2011 and May/June 2015 she falsely asserted that she was still living with Mr D at City B
[3] Wife’s affidavit, paragraph 35
[4] Redactions included her address; the amounts (and account numbers) in respect of various transactions; the identity of the landlord to whom she paid rent in City B
[5] This pathway is based upon the Full Court’s decision in Hickey v Hickey & Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 adapted by me to take into account the High Court’s decision in Stanford v Stanford (2012) FLC 93-518
[6] I do not accept that she spent $200 per week on food as she claims
[7] Wife’s affidavit, paragraph 40
[8] See paragraph [17] of these Reasons
[9] The purchase itself would constitute a financial contribution but it is convenient to deal with it here
[10] Wife’s affidavit, paragraph 32.
[11] Her medical condition is misspelled in paragraph 89 of her affidavit
[12] Or hypothetically if the Wife had care of a child of the de facto relationship
[13] See paragraphs 36 – 40 (inclusive) of the plurality judgment at pp. 86,640 - 86,641. Although their Honours were specifically dealing with Part VIII of the Act, I have substituted the corresponding provisions of Part VIIIAB
[14] These matters were relevant to a finding that it would not be just and equitable to make any order in Chancellor & McCoy [2016] FCCA 53 (her Honour Judge Turner), affirmed on appeal by the Full Court (Bryant CJ, Thackray & Strickland JJ) in Chancellor & McCoy [2016] FamCAFC 256
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