Meehan and Meehan
[2017] FCCA 1544
•16 August 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MEEHAN & MEEHAN | [2017] FCCA 1544 |
| Catchwords: FAMILY LAW – Property and spousal maintenance – contributions – weight to be afforded wife’s inheritance received late in relationship – s.75(2) factors – threshold test for spousal maintenance – which party to retain the former matrimonial home. |
| Legislation: Family Law Act 1975 (Cth), ss.72(1), 74(1), 75(2), 79(1), (2), (4),(d)-(g) |
| Cases cited: Hickey & Hickey & Attorney-General for Commonwealth of Australia (2003) FLC 93-143 Stanford v Stanford (2012) 247 CLR 108 |
| Applicant: | MR MEEHAN |
| Respondent: | MS MEEHAN |
| File Number: | LNC 642 of 2016 |
| Judgment of: | Judge McGuire |
| Hearing dates: | 27 & 28 June 2017 |
| Date of Last Submission: | 28 June 2017 |
| Delivered at: | Launceston |
| Delivered on: | 16 August 2017 |
REPRESENTATION
| Counsel for the Applicant: | Ms A Trezise |
| Solicitors for the Applicant: | Andrea Trezise |
| Counsel for the Respondent: | Mr P Welch |
| Solicitors for the Respondent: | Philip Welch |
ORDERS
That the property pool of the parties be divided as to 82.5% to the wife and 17.5% to the husband pursuant to the findings as to the content and value of that pool in the reasons herein.
For the purposes of Order No.1 hereof the husband shall have first option to retain the former matrimonial home situate at Property G in Tasmania provided that the husband choose to exercise that option by notice in writing to the wife within twenty-eight (28) days of the date of these Orders and should he not exercise such option then the husband is to vacate the property within thirty-five (35) days of the date of these Orders in favour of the wife.
Should the husband exercise the option to retain the property at Property G in Tasmania, then within thirty-five (35) days of the date of these Orders the husband make a lump sum payment to the wife of $173,328 and contemporaneously the wife transfer to the husband all her right, title and interest in that property.
Provided that should the husband not exercise the right to retain the property at Property G in Tasmania and such property revert to the wife then the wife shall make a cash payment to the husband of $137,097 within thirty-five (35) days of the date of these Orders.
That within thirty-five (35) days of the date of these Orders the wife transfer and/or vest all her right, title and interest in the following to the husband absolutely;
a)The Jeep Cherokee motor vehicle in the possession of the husband;
b)The corpus of the (omitted) Retirement Fund in the name of the husband;
c)All personalty and chattels in the possession of or under the control of the husband as at the date of these Orders; and
d)The balances of any bank account or like investments in the name of or to the benefit of the husband as at the date of these Orders.
That within thirty-five (35) days of the date of these Orders the husband transfer and/or vest all his right, title and interest in the following to the wife absolutely:
(a)The properties situate at:
i)Property A, in Tasmania;
ii)Property B, in Tasmania;
iii)Property C in Tasmania;
iv)Property D, in Tasmania;
v)Property E, in New South Wales;
(b)The wife’s (omitted) Volkswagen motor vehicle;
(c)The (omitted) camper trailer;
(d)The (omitted) dog trailer;
(e)The (omitted) Nissan motor vehicle;
(f)The (omitted) dogs in the possession of the wife;
(g)All personalty and chattels in the possession of or under the control of the wife as at the date of these Orders;
(h)The wife’s superannuation policy and entitlement; and
(i)The balances of any bank accounts or like investments in the name of or to the benefit of the wife as at the date of these Orders.
That each party be solely responsible for and indemnify the other in respect of the following:
(a)Any and all liabilities attaching to any of the assets retained by that party pursuant to these Orders; and
(b)Any and all liabilities incurred by that party since separation in either joint names, or in that party’s name alone.
That the husband’s application for spousal maintenance is dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Meehan & Meehan is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT LAUNCESTON |
LNC 642 of 2016
| MR MEEHAN |
Applicant
And
| MS MEEHAN |
Respondent
REASONS FOR JUDGMENT
Applications
These are proceedings brought by the husband in an application filed 19 December 2016 seeking orders for property settlement and spousal maintenance in his favour under the provisions of s79 and s72 of the Family Law Act 1975 (“the Act”).
During the course of the hearing, evidence was given in respect of the two children of the parties being, X born (omitted) 2000 and Y born (omitted) 2003. Given the nature of that evidence, an oral application was made on behalf of the husband after the hearing of final submissions in respect of the financial matters. I then proceeded to make final orders by consent in respect of X and Y whereby the parents have equal shared parental responsibility for the children and that they live primarily with the wife. Orders were made for time/with for the children with the father on each second weekend and for half of school holidays together with special days.
Background
The husband is 58 years of age. He is not currently and has not been employed since approximately 1999. He is not eligible for a Centrelink pension until he reaches 67 years. He currently derives his income from interest on the corpus of a ‘superannuation’ fund known as ‘the (omitted) Retirement Fund’ which comprises currently a corpus of $347,620. The genesis of this fund was a deposit by the parties in about 2014 from the wife’s inheritance from her late father’s estate.
The husband continues to live in the former matrimonial home at Property G in Tasmania.
There is no evidence that the husband has re-partnered. The husband has been diagnosed with a number of medical conditions including degenerative changes to the spine, osteoarthritis, cervical spondylitis, right knee degenerative osteoarthritis, paralysis in the left arm, neck pain and depression.
The wife is 46 years of age. She works part time as an (occupation omitted). There is no evidence that the wife has re-partnered.
The wife also claims to suffer some health conditions in her shoulders, knees and ankles.
The parties commenced cohabitation in (omitted) 1999 in Western Australia. They moved to Tasmania in (omitted) 2000 and in (omitted) 2000 commenced building a stone house on a property at Property G, such being owned by the wife prior to the commencement of the relationship.
In about 2003, the husband commenced a business under the umbrella of a company and together with a business partner (business omitted). The business operated under (business omitted) in Tasmania.
The wife continued her employment as a (occupation omitted) with (employer omitted) and qualified as an (occupation omitted) in (omitted) 2006.
In 2006 the wife’s father gifted her $80,000.
In mid 2013, the wife purchased a residential property at Property D, in Tasmania. That property was initially tenanted. The wife and the children now live in that property.
The wife’s father died in (omitted) 2013 and probate of his estate was granted in (omitted) 2013. The wife’s inheritance was substantial and comprised of the following real estate with current agreed values together with shares and cash as follows:
Property A, Tasmania $185,000
Property B, Tasmania $225,000
Property C, Tasmania $210,000
Property E, New South Wales $1,650,000
Shares $324,362
Cash $370,000
Total inheritance $2,964,362
In 2014 the parties, on financial advice, established the (omitted) Super with an initial corpus of $450,000 provided by the wife.
The company, (omitted), was wound up in about mid 2014.
The parties separated on 1 May 2016 with the wife soon after moving to the Property D property. X initially lived with the husband but has lived with the wife since February 2017. Y has lived primarily with the wife since separation.
Orders sought – Applicant husband
Given some dispute as to the contents and value of the property pool including issue as to ‘add backs’, Counsel for the husband in her final submissions sought specific orders which would see the husband retaining 21.8% of the property of the parties inclusive of superannuation. Inherent in those orders sought is that the husband would retain the property at Property G (agreed value $310,000), the current corpus of the (omitted) Retirement Fund ($347,620), a Jeep Grand Cherokee motor vehicle ($40,000) together with his personalty and balances of any bank accounts.
The husband asks for an order for spousal maintenance in the sum of $150.00 per week on an ongoing basis.
The husband’s case can be summarised as this being a long relationship of some 16 plus years in duration. He argues that he has made significant contributions of a non-financial kind but nevertheless significant and, in particular, by his labours to the building of the Stone house on the Property G property together with a dominant role as carer of the children. His affidavit states that there was agreement between he and the wife that he would assume these roles rather than contributing by remunerative employment. The husband’s Counsel argued that the Court should take an holistic approach to the parties’ contributions whilst acknowledging the financial contributions of the wife and, in particular, the impact of the wife’s inheritance in 2013.
After considerations of contributions, the husband argues that he should be given consideration in respect of the factors under s75(2) of the Family Law Act 1975 (“the Act”) in that his work capacity is minimal or nil and that the wife, by reason of the conceded inheritance, will be in a far superior financial position to him following the making of final orders under s79 of the Act. For these reasons he also asks for spousal maintenance.
Orders sought – Respondent wife
The wife also asked for an order that she retain the property at Property G.
The orders argued by the wife would have the husband retaining the following:
·Corpus of the (omitted) Fund
Retirement Fund $347,620
·Splitting order from the wife’s (omitted) Fund/ RBF
accumulation superannuation fund with
a base amount $66,000·Jeep Cherokee motor vehicle $40,000
·Personalty and balances of bank accounts N/K
Inherent in the orders sought by the wife is an argument that the husband retain the benefit of a number of ‘add backs’ of monies he has received which would otherwise be in the property pool, including but not limited to the payment of legal costs in the sum of $40,000.
The wife has also paid legal costs but she argues these have been paid from her income rather than from assets otherwise comprised in the pool of property.
The wife says that there should be no adjustment to the husband on account of s75(2) factors arguing that the husband has some capacity for employment, that the children live with the wife, and that the husband does not provide child support. The wife says that she too has a limited capacity for long term employment.
Similarly, the wife argues that the husband fails at the threshold of s72 of the Act in his application for spousal maintenance in that he has not demonstrated that he is unable to meet his own needs.
The Evidence
Both parties gave evidence on affidavit and were cross examined. I found each of the husband and the wife to be credible and essentially honest witnesses although understandably eager to shore up their own case by downplaying the contributions of the other party. The reasonableness and objectivity of both the husband and the wife was demonstrated, however, by me being able to make final orders by consent on an oral application in respect of their children.
Some issues of credit arose between them and not surprisingly in respect of historical recollection. The husband was candid in conceding that the wife was primarily responsible for finances (and these being mainly her own finances) during the relationship. In these areas of recollection I generally prefer that of the wife.
The parties were in serious dispute as to their contributions to the building of the stone house at Property G. In the witness box, the husband was able to make candid and appropriate concessions against interest and more ready to do so than the wife who was more prone to superlative or exaggeration.
Dr A
The husband adduced evidence from Dr A. He was cross examined by telephone. His affidavit was sworn 2 June 2017. He is a general practitioner based at (omitted) and has been the husband’s doctor for many years. Dr A’s general opinion was that the husband’s many aliments and conditions impact negatively on his ability to perform heavy manual work. He conceded in cross examination, however, that he was unable to certify the husband to be unfit for ‘light work’ and agreed that he would have the capacity to be employed in his previous occupations as a (omitted), (omitted), (omitted) or as a (omitted) but with some caveats as to his ability to sit or stand for long periods.
Mr A
Mr A is a real estate valuer. His affidavit was sworn 28 March 2017. He was not required for cross examination. He provides valuations now agreed in respect of the real estate.
Mr Q
Mr Q is also a valuer. He provided a valuation now agreed on the property at Property E in New South Wales. He was not required for cross examination.
Ms A
The husband adduced evidence from Ms A. Her affidavit was sworn 2 June 2017. She attended for cross examination.
Ms A’s affidavit corroborates the husband’s contributions to the building of the Stone house and other structures on the property. She said that she observed him to be primary carer of the children. She deposes to having conversations with the wife regarding Ms Meehan’s concern as to the husband’s capacity to earn a living due to his degenerative back problems and explicit or implicit agreement between the parties that the wife would be the financial provider and Mr Meehan would be the stay at home parent.
Ms A says that she is a friend of both parties and I expect her evidence is slightly partisan only by reason of being asked by the husband to give evidence. She conceded in cross examination that her actual contact with the family was limited and the probity of her evidence is therefore minimal.
Mr Y
The husband adduced evidence from Mr Y. His affidavit was sworn on 5 June 2017. He was not required for cross examination. He is an (occupation omitted). His affidavit provides particularised corroboration of the husband’s work on the Stone House.
Mr C
The husband adduced evidence from Mr C. His affidavit is sworn 2 June 2017. He disposes to discussions with the husband in respect of ‘rectification jobs’ on the wife’s property at Property E, NSW. Mr C’s evidence provides corroboration of the husband assisting with physical labours for some days in (omitted) 2016 on the NSW property.
Dr B
The wife adduced evidence from Dr B. His affidavit is sworn 1 June 2017. He was not required for cross examination. His affidavit annexes a report of 31 May 2017 in respect of the wife. He notes that the wife reporting in 2011 of pain and discomfort in her shoulders but being unable to diagnose the presence of any pathology. He also notes pain in both knees. Dr B concludes on the final page of his report thus:
A patellar subluxation …gives her 3% whole person impairment for both knees.
For the time being, I do not believe she requires any investigation or treatment but for the continuation of her exercise program. She should avoid repetitive squatting, kneeling or climbing up and down stairs to avoid aggravating her symptoms.
Her right ankle has a mild ligamentous instability giving her 2% whole person impairment. Nevertheless because she has already had two surgical procedures and I expect that her ankle symptoms with become worse with time as she develops premature osteoarthritis. Because of the ankle symptoms I expect she would have some difficulty with Activities that require her to remain in a squatting (hyper dorsiflexion) position.
I would advise her to avoid sporting activities that require her to repetitive hop, skip, jump, squat, climb and rapidly change direction. Some of these activities are likely to aggravate and precipitate further episodes of patella femoral dislocation and/or her subluxation of her shoulder and/or ankle joints.
I do not expect that she will require any further surgical procedures in the foreseeable future. I expect that she will need to modify her activities to some extent if she is to maintain her symptoms at a tolerable level. Because of her symptoms she may need to visit her GP and to obtain a prescript of anti-inflammatory analgesics. Alternatively she can attend a physiotherapist and buy non-prescription analgesics in the supermarket.
Mr S
Mr Meehan is the husband’s brother. The wife adduced evidence from him. His affidavit is sworn 26 May 2017. He was not required for cross examination.
Mr Meehan deposes to living with the parties at Property G between 18 April 2013 and 18 August 2013. He disposes that the husband would get the children off to school if the wife was at work and that otherwise she did so. He says that his brother did not do the shopping or the washing.
The issues
The issues for my determination can be isolated and summarised as follows:
(ii)The content and value of some items in the property pool with a reference to ‘add backs’;
(iii)The weight to be given to the wife’s initial financial contributions and the injection of $80,000 from her father during the relationship;
(iv)The weight to be given to the husband’s non-financial contributions;
(v)The weight to be given to the wife’s inheritance from her late father’s estate;
(vi)Whether or not any adjustment is made to either party on consideration of the relevant s.75(2) factors;
(vii)An issue of credit between the parties as to whether the Property G property was unencumbered at the date of commencement of cohabitation;
(viii)The husband’s application for spousal maintenance and whether he has crossed the ‘threshold’ of showing he is unable to attend to his own needs.
Relevant law
Matters of property settlement are provided for in s79 of the Act where s79(1) states that in property settlement proceedings, the Court may make such order as it considers appropriate altering the property interests of the parties to the property.
Whereas previously it was thought well settled that trial judges were to follow a strict four-step approach to a consideration of interests in an alteration of property[1], the High Court in Stanford v Stanford[2] made it clear that the Courts consideration under s79(2) as to whether it be ‘just and equitable' to make any alteration of property interests is a preliminary question for the Court and one not to be simply conflated with the considerations of contributions under s79(4) of the Act. As their Honours said at [40]:
… The question of whether it is just and equitable to make a property settlement order should not be answered by starting with an assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s79(4). The power to make a property settlement order must be exercised 'in accordance with legal principles, including the principles which the Act itself lays down'. To conclude that making an order is 'just and equitable' only because of and by reference to various matters in s79(4), without a separate consideration of s79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
[1] Hickey & Hickey & Attorney-General for Commonwealth of Australia (2003) FLC93-143
[2] (2012) 247 CLR 108
Nevertheless, their Honours in Stanford (supra) also recognised that pragmatically, the question under s79(2) is usually easily answered and whilst contributions are not a necessary or determinative answer to the s79(2) question, it is clear that such contributions can be a factor in the decision. As Thackray CJ in Fielding & Nichol[3] noted at [42]:
The fact the “two inquiries” under s79(2) and s79(4) are “separate” and “not to be merged” also does not mean, as a matter of logic, that matters arising under s 79(4) can be ignored when deciding whether it is just and equitable to make any order adjusting existing interests. The provisions of s79(4) encompass what Finn J in Bevan & Bevan described as “the parties’ financial history (ie their contributions) and their present circumstances and future prospects” – and her Honour went on to hold that findings of fact about those matters will assist in determining whether it is just and equitable to make any order.
[3] Fielding & Nichol [2014] FCWA 77
In the matter now before me, the parties’ relationship endured nearly 17 years. There are two children of that relationship. Contributions may be in dispute as to weight, but it is clear that each party made considerable contributions of either or both financial and non- financial type over the course of the relationship. The relationship is ended. As such, I find it just and equitable to consider the alteration of their property interests.
Consequently, the task for the Court is to, firstly, establish the content and value of the property pool. In this matter I am asked to consider making certain 'add backs’ to the pool.
I must then consider their contributions to the attaining, maintaining and improvement of the contents of the property pool be those direct financial contributions, indirect financial contributions, non- financial contributions and including those as homemaker and parent.
After considering the contributions, I am then to determine whether it is appropriate, just and equitable to make any further adjustments to entitlement after consideration of the factors in s79(4)(d)-(g) of the Act including any relevant considerations under s75(2).
In this matter both parties urge me to make a global consideration of the contributions on an holistic view of those contributions towards the property pool. I agree that such a method is appropriate where the relationship has endured some 17 years and the contributions vary considerably in type. Nevertheless, the alternative of an asset-by-asset approach may have been equally useful in a matter such as this where the major assets of the parties are readily identifiable and contributions to them have been direct and particular.
The Property Pool
The parties generally agree as to the content and value of the property pool save and except for five discrete issues as follows:
a)The proceeds of sale of the (omitted) business and assets amounted to $15,750. The husband has retained those funds. He says that the wife did not lay claim them but this is immaterial to my consideration. Counsel for the wife argues simply that these are funds received by the husband from the disposal of assets and should be included in the pool on his side of the ledger. Counsel for the husband argues, however, that these funds should not be 'added back' to the pool but rather 'set-off' against other benefits retained by the wife since separation, including the repayments of loans made to the adult children of the husband, Ms N and Ms J, in a quantum of approximately $13,000. This seems to be an indisputable fact. The wife has also disproportionately benefited from Centrelink payments made to the parties in respect of the children at a time when X had lived with the husband following separation. Given that my task is not a precise mathematical one and given the quantum of the pool, I generally accept the arguments of the husband's Counsel here and will not make those add backs.
b)The wife says that the balance of her personal (omitted) bank account now sits $11,284 and consistent with the generally accepted approach espoused in Stanford (supra), the Court should establish the content and value of the pool as at the date of the hearing. In her trial affidavit sworn as recently as 26 May 2017 the wife deposed to account balances totalling $28,290. No explanation is given for the significant diminishing of the account balances as at the time of the hearing and where the wife is working and presumably receiving income from her dog business and/or rentals. I will include her balance account at $28,290 consistent with her affidavit of 26 May 2017.
(b)The husband claims a debt to (omitted) School for school fees of $1,139. This appears to be one half of the annual/fee. The wife deposes that she has paid one half of the fees and has deliberately directed the other half of that account to the husband, although the debt is obviously one which is “joint and several” I will not include this is a liability of the marriage given that the wife has met one half of this year’s debt and the total of the previous year’s school fees.
(c)The husband has made withdrawals from his (omitted) Retirement Fund since separation of which a total amount of $40,000 has been paid towards his legal costs for these proceedings. Following the well-known authority of NHC v RCH[4] I have no difficulty in adding these paid legal costs back to the pool. The diminution of portfolio retirement funds corpus is obvious accordingly.
(d)The wife has paid legal costs of $27,000. She says, however, that they have been paid from 'income'. I was not directed to any documentary evidence which could specifically corroborate this claim although cross-examination also exposed that payments had been made through her (omitted) Bank accounts. I have already included the wife's (omitted) Bank accounts at the higher earlier value and comfortably expect that the decrease in her account balance is explicable, at least in part, by the payment of legal costs regardless of her ongoing income or at least part payment has been made from her accrued savings. Being careful not to “double-dip”, therefore, I do not intend to 'add back' the wife's paid legal costs.
[4] NHC & RCH (2003) FLC 93-204 @ [61-63]
Consequently, the pool of property for my consideration and value is the following:
Property G310,000
Property A 185,000
Property B225,000
Property C210,000
Property D195,000
Property E, New South Wales 1,650,000
(omitted) Volkswagen (wife) 1,200
(omitted) camper trailer (wife) 3,000
(omitted) dog trailer (wife) 500
Home built utility trailer (wife) 1,450
(omitted) Nissan motor vehicle (wife) 38,000
Jeep Grand Cherokee (husband) 40,000
Household contents (wife) 2,035
Household contents (husband) 9,040
(omitted) dogs (wife) 4,000
Wife’s savings 28,290
Husband’s savings 1,301
Husband’s paid legal costs 40,000
TOTAL TANGIBLE ASSETS 2,943,816
Liabilites:
(omitted) Bank home loan (wife) 163,176
NET TANGIBLE ASSETS 2, 780,640
Superannuation:
(omitted) Retirement Fund 347,620
(omitted) Fund (husband) 465
(omitted)/RBF (wife) 157,546
TOTAL superannuation 505,631
TOTAL NET PROPERTY POOL
(INCLUSIVE OF SUPERANNUATION) 3,286,271
Contributions
The outstanding and overwhelming contribution to the above property pool was from the wife's late father's bequest to her in November 2013 in a total quantum of $2,964,362 comprising of real property, shares and cash.
At the commencement of the relationship in 1999, the wife owned the property at Property G, albeit not improved to its current state. She paid $33,000 for the property and had made some relatively minor improvements. I prefer the wife's evidence that the property was unencumbered at that time, although, not unusually, a title search shows an undischarged mortgage. She controlled her own and the family finances. I accept that it is a common practice for a mortgage to remain registered despite the liability being extinguished. This property is still owned by the wife and now has a near completed stone residence. There is some dispute between the parties as to the value of the property as at the date of commencement of cohabitation. The wife estimates $80,000 but without substantiated support. The husband produces a land tax certificate showing unimproved value at $17,000. I note the wife paid $33,000 for the property.
The wife also owned a property at Property F, Western Australia which was sold in 2000 netting her some $18,000. Her unchallenged evidence is that she owned a motor vehicle valued at $4,000, a trailer valued at $2,000 and savings of $6,000.
The husband was an undischarged bankrupt as at the date of commencement of cohabitation.
In 2006 the wife's father gifted her $80,000 which was put to the improvements of the Property G property.
The dispute between these parties and much evidence at the trial was in respect of the husband's contributions during the relationship and particularly his work on the construction of the stone residence at the Property G property. In her affidavit at [26] and [27] the wife deposes:
Mr Meehan and I both collected stone for the building of a stone house the majority of which was done by the end of 2000 when neither of us were working. The stone foundations began in (omitted) 2000 and I paid for the cost of the concrete slab to be poured by professionals in 2001. The funds that I obtained from the sale of my property at Property F, Western Australia assisted with this cost. Over the next 10 years Mr Meehan then worked on average less than half a day a week undertaking the laying of stone for the construction of the stone house. All other work I contracted out and financed.
We did construct a four-bedroom, two bathroom, double story house of which the laying of the stone work was undertaken by Mr Meehan. 90% of all other work was done by contractors being three builders, two plumbers, two electricians, a roofer, concreters, steel fabricators, tilers and carpet layers the cost of which was financed by myself with the assistance of my father the late Mr H. In 2006 my father contributed the sum of $80,000 to assist with the cost of fitting out the home.
Nevertheless, in a letter of which I can comfortably find the wife to be author albeit an undated letter but one clearly penned sometime prior to separation, she gives a little more credit to the husband’s efforts when saying:
I want to transfer the home into your name alone. This can be done when the house is signed off by council. You built it, it is your house.
The wife worked throughout the relationship from 2000. The husband was not remuneratively employed. I generally accept, however, that there was at least a tacit agreement between the parties that the wife would work and the husband would work on the home. I generally prefer the husband's evidence as to his efforts in this regard. True it is that the home remains unfinished albeit in a liveable state. I also accept that qualified tradesmen were employed. The husband, however, was able to highly particularise his efforts. He made appropriate concessions as to the wife's own efforts and contributions. He adduced evidence which was not challenged to corroborating his efforts. I am content therefore, that the husband was generally engaged in the building of the home together with a role as homemaker and parent therefore allowing the wife to pursue her employment. This is not to under rate the effort of the wife. I accept that she was also at times engaged in both assisting with the building of the home, in caring for the children and as homemaker.
By reason of the designated and agreed roles and their efforts during the relationship, I am satisfied that they contributed overall equally save and except that the wife made a contribution of some significance by way of the gift to her from her father of $80,000 which was put towards the construction of the house. The wife should also receive credit for her superior initial financial contributions which are although now some 18 years ago, retain value and weight noting that the property development at Property G was owned by her prior to the commencement of the relationship[5].
[5] Pierce & Pierce (1999) FLC 92-844
The children both currently live with the wife although X initially stayed with the husband following separation. The wife has been financially responsible for the children without child support assistance from the husband. The wife has paid the school fees during 2016 and half of the 2017 school fees. I see this as a post-separation contribution by the wife.
I must then consider the wife's inheritance and its contribution to the property pool. It obviously represents the majority of the value of that pool. It was received relatively late in the relationship in November 2013. Nevertheless, it is one contribution among many and varied contributions made by these parties to a 17 year relationship and the Court is aware of the caution noted by Kay J in Aleksovski & Aleksovski[6]:
The Judge must weigh up various areas of contribution. In a short marriage, significant weight might be given to a large contribution. In a long marriage, other factors often assume great significance and ought not be left almost unseen by eyes dazzled by the magnitude of recently acquired capital ... just as early capital contribution is diminished by subsequent events during the marriage, late capital contribution which leads to an accelerated improvement in the value of the assets of the parties may also be given something less than directly proportional weight because of those other elements.
[6] Aleksovski & Aleksovski (1996) FLC 92-705
Noting the discretion in the Court to altering of property interests, some trial judges have actually or effectively excluded or quarantined inheritance’s received late in relationship or post-separation. I do not consider that option available to me where the inheritance was received some two and half years prior to separation and where there is evidence of some direct contribution by way of his labours of the husband towards those assets and also, of course, where there are significant other contributions by the parties of a financial and non-financial type during the relationship. Such property should therefore be included in the pool and not be protected simply because it emanated from an inheritance. It remains, however, a contribution by the wife and a significant and weighty one to be considered alongside all of the other contributions of these parties.
Other than remaining real estate, the wife put $450,000 from her inheritance to the corpus of the husband's (omitted) Retirement Fund. She purchased the Jeep Cherokee motor vehicle for $62,000 and added a gymnasium to the Property G property at a cost of $52,000.
This is a relatively long relationship of some 17 years duration. The wife made initial contributions which continue to attract some weight. She contributed a year lump sum of $80,000 during the relationship by gift from her father. She contributed from the inheritance in a sum of just under $3 million. The husband's contributions were of a non-financial type. He contributed his labours to the building of the stone house. He contributed as homemaker and parent. Taking all of these matters into account but with considerable weight to the wife's contribution of her inheritance by reason of its quantum and timing, I propose to alter the property interests of the parties on the basis of contributions as to 90% the wife and 10% the husband.
Section 75(2) Factors
The wife works part-time as an (occupation omitted). She has a most recent taxable income of $44,701. She also receives income of approximately $5,000 per annum from dog-breeding and has income from rental of the property portfolio received in the inheritance. She has some physical ailments which may impact on her career as a (occupation omitted) into the future. Nevertheless, by reason of her inheritance and these orders, she will remain a person of some wealth with income potential.
The husband does not work and has not remuneratively done so since 1999. He is 58 years of age. Dr A notes a number of physical conditions which would preclude him from heavy labour. His income is currently limited to interest of $267 per week from the (omitted) Retirement Fund.
The two dependent children aged 16 and 13 years live with the wife. She remains almost totally responsible for their financial support. The husband pays no child support.
The husband has had use of the unencumbered home since separation and of the property at Property G since soon after separation.
The husband's daughter Ms J lived with the parties for a short period when the wife was the financial provider for the family unit[7].
[7] Robb & Robb (1995) FLC 92-555
The wife proposes no adjustment on account of section 75(2) factors arguing that the husband has some capacity for employment albeit not actively pursued by him whereas the wife has the ongoing responsibility for the care of the two dependent children. Counsel for the husband seeks an overall adjustment of 21.8% of the pool to the husband based on the particular assets that he wishes to retain and hence implicit in this argument is an adjustment for the husband on account of the considerations under section 75(2) based on the income discrepancy of the parties.
I am satisfied generally that these two parties entered into a relationship without any expectation of the husband contributing from any gainful employment. I accept that he was expected to contribute to the building of the home on the Property G property. He is now 58 years of age and has been out of the workforce for many years. He has some physical conditions which limit his capacity to work in some occupations. The parties entered into the building of the stone house on the Property G property with a joint expectation of them both living there into the future.
The exercise for the Court is not one of utilising the s75(2) factors as some form of social engineering to achieve a degree of equality. Rather, the Court should consider each of the relevant to factors within the circumstances and merit of each particular factual platform and not to reach some contrived result but to give real rather than token expression to the considerations.
This was a reasonably long relationship where the parties shared ambitions, expectations and efforts. The husband is not a young man, his work ambitions must be limited by time, demand and his health. The wife has the important responsibility for the actual and financial support of children. She could not reasonably expect any substantial child support from the husband. She contributed to the support of the husband's daughter for a period of time. The husband has had the use of the unencumbered home since separation. The wealth of the parties and the income potential is disparate by reason of their separation, these orders, and primarily from the wife's inheritance. In all of these circumstances, I consider that a further adjustment in favour of the husband of 7.5% of the property pool is appropriate, just and equitable. In this sense, I intend to take a 'one-pool' approach given the quantum of the tangible asset pool as distinct from the superannuation entitlements of the parties and where, in fact, the husband's 'superannuation' is by way of direct cash injection from the wife's inheritance.
Conclusion
I conclude, therefore, that the husband should receive 17.5% of the property pool. That pool inclusive of superannuation has a gross value of $3,286,271.
The husband will retain the following:
(e)The corpus of the
(omitted) Retirement Fund $ 347,620
(f)The Jeep Cherokee motor vehicle $ 40,000
(g)Furniture and contents $ 9,040
(h)Paid legal fees $ 40,000
(i)Bank account balance $ 1,301
(j)(omitted) superannuation $ 465
TOTAL$ 438,426
The husband's entitlement in dollar terms of 17.5% of the pool is $575,097 requiring a further adjustment from the wife of $137,097.
On the basis of the wife retaining the Property G property (which is disputed), she proposes any further adjustment be by way of a splitting order from her superannuation fund with (omitted)/RBF to satisfy the husband’s entitlement. In circumstances, however, where the wife, in any event, will be substantially asset rich and certainly relatively so compared to the husband, and where there are likely restrictions and limitations on the ability of the husband to make withdraws from superannuation, I prefer a cash adjustment from the wife as the more appropriate course.
There remains for me to determine, however, which of the parties should retain the Property G property as a part of their settlement entitlement. Both wish to retain the property. Each has some meritorious claim to it. The husband has remained in occupation following separation. The wife has previously made a form of representation to him, albeit prior to separation, that she would transfer the house to him saying; 'I want to transfer this house into your name alone. This can be done when the house is signed off by Council. You built it, is your home[8].' The wife has available to her other options of accommodation.
[8] See exhibit A2
Nevertheless, there are also factors which might argue for the wife retaining the property. She has owned the Property G property since prior to cohabitation. The property’s purpose-built for her current and proposed (omitted) interests of business. By reason of my orders, the wife will have a greater financial capacity to make a cash adjustment on the husband whose entitlement will be substantially taken up with his superannuation and motor vehicle and where I have no evidence from him of his borrowing capacity. In this sense, I calculate that should the husband retain the home then he would be retaining assets of value of at least $748,426 and, on my calculations, would be required to settle a cash adjustment on the wife of $173,328.
Although I have no evidence of the husband's capacity to borrow so as to settle on the wife, on reflection, I intend to give the husband the first option to retain the Property G property. He is currently in occupation. The wife is more easily able to re-establish herself in alternative accommodation and indeed has done so since separation. In this sense, balances of convenience favour the husband. If, however, he does not take up or is not able to take up that option within 28 days then the wife shall have an option to retain the property on the terms set out above.
Spousal Maintenance
The husband also makes an application for spousal maintenance payable by the wife in the quantum of $150 per week ongoing and open-ended.
Section 74(1) of the Act provides:
In proceedings with respect of the maintenance of a party to a marriage, the Court may make such order as it considers proper for the provision of maintenance in accordance with this part.
Section 72(1) states:
A party to a marriage is liable to maintain the other party, to the extent that the first – mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
a) by reason of having the care and control of a child the marriage was not attained the age of 18 years;
b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
c) for any other reason.
having regard to any relevant matter referred to in sub-section 75(2).
The consideration under s72 is a different one to the consideration of the s75(2) factors generally under this s79 process towards altering property interests. That is, s72 creates a threshold of onus of proof in an applicant, firstly, to show that he/she has 'needs' and, secondly, that he/she cannot meet those needs It is then, and only then, if that threshold is crossed, that a Court will turn to consider the ability of the respondent to contribute to an applicant's needs.
The husband's needs are set out and effectively unchallenged in his statement of financial circumstances filed to June 2017. He deposes to needs of $800 per week inclusive of legal costs of $385 per week. These costs are not an ongoing expense and I therefore accept the husband’s proper weekly expenses at approximately $415 per week. He currently has no accommodation costs and the options created by my s79 orders will add extra expense for him in this regard.
The husband's income is limited to interest on his superannuation fund which currently brings in $267 per week. The separate nature of the maintenance consideration as opposed to the s79 process implies that a party should not necessarily be required to diminish their assets as a form of self-maintenance.
The difficulty with the husband's application, however, is that he has not in my view, discharge his evidentiary burden in showing that he cannot obtain some employment to attend to his own needs. It is true that he has not worked for remunerative employment for some 17 years. His doctor deposes to a number of physical ailments which would preclude him from heavy labour. He is 58 years of age. Nevertheless, cross-examination of Dr A elicited concessions that the husband could perform lighter work. Dr A agreed that the husband could physically undertake his previous occupations as a (occupations omitted) or other rather less physical work such as (omitted) or (omitted). Whilst I accept that entry for Mr Meehan into the workforce might be circumstantially difficult, this is not the test. There is no evidence before me of any efforts or attempts by the husband to obtain any employment whatsoever or to undertake any form of re-training so as to enter the workforce. In this sense there is no evidence of him mitigating his own current position. I am not satisfied, therefore, that he has discharged that onus which rests heavily on him and therefore has not crossed that threshold question in his application for spousal maintenance must fail at that point.
I certify that the preceding eighty-eight (88) paragraphs are a true copy of the reasons for judgment of Judge McGuire
Date: 16 August 2017
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